Why Your Business Wants to Adopt Blockchain Technology

What exactly is Blockchain Technology?

Ledger? Fork? Nodes? Mining? Smart contracts? Transaction block?

Blockchain Technology: Whats going on

Well, let’s go the other way.

Blockchain technology was created by people not smarter than you and I, and it seems to be quite simple to understand when we stop using tech terms.

In simple words, blockchain is an ever-growing list of “blocks”, which are records that are linked to each other and secured using cryptography.

Where is blockchain stored?

These records are stored in a record book (“ledger”), which, in turn, is simultaneously stored on thousands of home computers and business servers (“nodes”) all over the world.

This record book can be used to record many kinds of things.

Blockchain Technology - Record Book

We will use sending and receiving money as the most common example.

How does blockchain work?

Imagine that you want to send money to your friend. When you did this, a new record is created detailing this transaction.

This record then is sent to thousands of computers, which store a copy of the record book. Those computers confirm that the transaction is authorized and they agree or disagree that all issues about the transaction are legitimate.

Imagine another situation: there are hundreds of fellows standing around you and your friend, who see with their own eyes how you actually gave him money and that it was the right amount.

This record book is not owned by any individual, bank, financial institution or any other kind of organization. It is owned by everyone who has a copy of the record book. At the same time, it doesn’t mean that a person with a copy has control over it.

If your friend wants to return the money, that will be a new record in the book. It won’t replace the original record about the first transaction.

One of the main advantages of blockchain is that it is impossible to fudge those records in the record book. If someone who has a copy of the record book tries to change a record, this change will be rejected by other computers during the verification process.

Benefits of adopting blockchain technology

1. Lower costs

You all like the ease that comes from online payments, but these numerous fees can really cut into profits.

Some services like PayPal and Shopify charge from 2.9 to 4.4 percent, depending on whether the transaction is made within or outside the US. Also, don’t forget about chargebacks or monthly costs.

The immense potential of blockchain is an exclusion of a third-party. Thus, blockchain allows to minimize or eliminate the counterparty risks. Intermediaries like lawyers, brokers, and bankers might no longer be necessary.

No Internet Connection

2. Innovation

People are always interested in everything new, that is their nature. Clifford Blodgett, a CreativeOne financial technology specialist, said:

By promoting your use of blockchain, you will solidify your reputation as an innovator in your industry and impress your customers and business partners”.

Your potential customer may like the fact that there is so much hype around blockchain technology. Man is an impulsive creature, who is often guided by emotions.

The main issue is to present information correctly and in simple language because a large portion of your customers still has no idea how blockchain matters to them.

Blockchain on Blockchain

You will be often asked to explain blockchain to people who don’t have a technical background. Thus, education is crucial.

3. Advantage over competitors

Other things being equal, the use of blockchain technology can be a decisive factor for a potential customer. It could be the one thing that makes a prospect choose you over someone else.

As more businesses make the switch, it can play a cruel joke with you. Refusing to follow technological trends, you can be considered a retrograde and your clients will opt to work with another company.

David Eyton, head of technology of gas and energy giant BP, told Financial Times:

There are uses for blockchain that could give us a competitive advantage. Blockchain can be much more efficient in terms of speed and verification of transactions“.

4. Full control over transactions and data

Each party can verify the records of its transaction partners directly, without an intermediary.

Another bonus is a peer-to-peer transmission. It means that communication occurs directly between peers, not through a central computer or server (“node”). As we said before, each node stores and forwards information to other nodes. It also results in faster transactions, because you do not need to wait for money to make its way through multiple banks.

5. High level of data security and protection against unauthorized actions

The threat of hacker attacks is growing every year. It is especially important for government, law, and financial organizations. The main advantage of blockchain technology is that it is safer than traditional payments.

Protect Bitcoin

The issue is that each party on blockchain has access to the entire database and its complete history. No single party controls the data or the information. Every party can verify the records of its transaction partners directly, without an intermediary.

6. Accurate recordkeeping

Distinguishing feature of blockchain technology is the absence of any kind of internal database. That’s why it is considered to be one the most secure and accurate way of maintaining records.

When an item is added to the record book (“ledger”), it cannot be changed or deleted by any amount of power and influence.

7. Transparency

Blockchain technology provides a high level of privacy by ensuring that transaction details are shared only amongst the participants involved in those transactions. With blockchain transactions, there’s no need for a third party.

However, in addition to the high level of privacy built into blockchain technology, there is also a high level of transparency. It’s impossible to delete a blockchain transaction in an attempt to hide it and fraudulent transactions cannot be added.

Anyway, companies can choose to implement a private blockchain or a public blockchain within their processes according to the level of transparency they are looking for.

What can be done with blockchain?

Even if bitcoin and the cryptocurrency trend turns out to be a massive bubble, the technology may be here to stay.

There are many concerns about allegations that blockchain technology and cryptocurrencies will not find understanding at the state level. However, while South Korea prepares to ban crypto trading, Belarus becomes the first country to legalize ICO, cryptocurrencies, and smart contracts.

Government Banning Bitcoin

Blockchain technology has already seen many broad applications in areas separate from cryptocurrency, according to a report by CoinSpeaker.

Advertising

Just like radio, TV, the Internet, social, and mobile before it, blockchain technology presents an opportunity as well as a threat and will dramatically affect the practice of marketing and advertising.

If we think of attention as a resource or even a kind of currency, we must allow that it is always, necessarily, being ‘spent.’ There is no saving it for later. The question is always, what shall I pay attention to?” – Tim Wu, The Attention Merchants.

Advertising and marketing specialists are used to the fact that attention doesn’t cost anything.

In a blockchain-based world, this statement could change. Arguably, it is already changing as more than 600 million devices all over the world run some kind of ad-blocking software.

There is a possibility that in the future, to attract someone’s attention, you will have to pay this person directly. But it doesn’t mean that you have to get a credit card every time someone sees your ads. Such a system will be viable only with the help of micropayments and digital currency.

Making and tracking these types of payments is precisely one of the inherent strengths of blockchains.

Brave offers a glimpse of this future. Built by the creator of JavaScript and the co-founder of Mozilla and Firefox, it is already a faster browser experience for end users, natively blocking ads and preventing cookies. However, it is in the “Payments” tab where the story starts to get unique.

Brave Browser

Brave offers the capability for site visitors to directly make micropayments to a publisher via cryptocurrency for their content. You may not be willing to pay $200 a year for a subscription to The Economist, but you will pay a fraction of a penny to read an article. At scale, some of the most popular sites will start moving away from advertising as we know it.

The next iteration will come in the form of something like the Basic Attention Token(BAT), a function built by the architect of the Brave browser. The token is the mechanism through which an advertiser pays for an attention-based mental effort by an individual. With Brave and the BAT, you will pay end users for their attention, instead of the 73% of all ad dollars going to Facebook and Google.

Logistics

Blockchain is currently being hailed as the new technology to disrupt the supply chain.

In a recent survey by Xeneta, 72% of responded agreed that this technology will be applied to logistics to regulate and simplify administrative work.

The sharing possibilities of this technology create many opportunities for logistics/supply chain applications, say advocates. Advantages for the sector include improvements of transparency and data sharing across the supply chain, better tracking of orders, reducing errors and better fraud detection.

Some experts did not expect the application of this technology before 2018; however, there are already some examples of blockchain technology being used in logistics. Marine Transport International (MIT) is using the technology to record and store Verified Gross Mass (VGM) data.

Instead of a VGM message being delivered sequentially to parties within the supply chain, our platform can provide a decentralized approach to delivering VGM messages”, said Jody Cleworth, MIT’s chief executive.

At the end of November Walmart also announced it is trialing blockchain technology to see whether it is well-suited to identifying the source of bad food in the supply chain. IBM is also investing in technology and is currently working on developing blockchain products.

Blockchain technology presents huge cost saving advantages for the industry, Cleworth added. The airfreight sector might be ideally suited for it, due to high security and safety requirements. “It is unhackable and safe, it allows many intermediaries in the air cargo chain, from handlers to Customs, from shippers to carriers to communicate safely, cheaply and effectively”, said Cleworth.

Healthcare

Medicare fraud caused more than $30 million in losses in the United States in 2016, and blockchain-based systems could help minimize it. Besides, it could reduce admin costs for billing by eliminating the need for intermediaries with automated activities and more efficient processing.

With the growth of connected devices and the Internet of Things (IoT), existing health IT architecture is struggling to keep systems secure. Blockchain solutions have the potential to be the infrastructure that is needed to keep health data private and secure while reaping the benefits of connected medical devices.

Music

What if when you opened up an app kind of like Spotify, that instead of Spotify charging you a subscription, and paying royalties to artists, you paid the artist directly?

As an example, once you’re 35 seconds into the length of a song, a cent or two was paid directly from your wallet to the artist’s.

The record of what you’ve listened to and what you’ve paid is verified by many other computers, and the record is set in stone. Ujo Music is working on ideas like this right now.

File storage

Rather than store your files on Dropbox or Onedrive cloud servers, what if your files could be split up into tiny chunks and stored on thousands or millions of people’s computers around the world?

The record of what parts of files you own and where they are cannot be changed – only you have the key to view the pieces as a whole, and no organization owns your data. This is the sort of thing that Storj and Sia.Tech are working on.

Voting

For example, Horizon State. They use a ledger technology for voting. They replaced Bitcoins (which represent currency), with tokens of their own, which represent votes.

Instead of spending a Bitcoin, you’re lodging a vote. The same benefits we see with digital coins apply to these votes: their authenticity and legitimacy are validated by many people’s computers, and the ledger of votes can never be tampered with. It exists to be recounted with the same result, forever.

Energy

Imagine a country filled with Tesla Powerwall equipped houses. Instead of being “off grid”, they’re very much on it – but they’re not paying an energy provider for their kWh. In fact, in this future, there’s no need for traditional energy providers at all anymore.

Instead, houses automatically generate, store, and trade electricity between themselves based on which neighbors need extra, and which have lots of excess in their batteries.

Thanks to the blockchain, this is no longer science fiction – it’s being worked on everywhere from Australia to New York City.

Conclusion

Although blockchain technology is currently changing our perception of many industries, keep in mind this is a marathon, not a sprint. The blockchain revolution will not happen overnight, however, trends are already emerging.

Further developments should make it highly usable and cost efficient for most business applications.

Experts predict blockchain technology will only get faster as its scale increases. As more companies embrace this technology, the more questions and speculations will arise around it. Essentially, the more widely blockchain is adopted, the better it will become. Further developments should make it highly usable and cost efficient for most business applications.