With all the buzz around Bitcoin and blockchain lately, everyone on the business and government sectors are vigilant and attentive. Many innovative and technologically advanced industries are all out in supporting this new trend, while smaller businesses are still skeptical. They could be torn between waiting a little bit more and taking the plunge. This is perfectly understandable as blockchain is still to make it to the mainstream and users are still testing its functionalities, use-cases and possible benefits.
Blockchain is still waiting for a breakthrough that will trust it to the mainstream. If small businesses choose to play it safe, they will have to wait until the new system is fully accepted and recognised in the industry. However, they also don’t want to be left behind when this happens.
There are several things that need consideration prior to making any decision whether a small business will have long lasting benefits from blockchain or if they are wiser to hold back from a major change.
1. Blockchain is limited to internal data utilisation, comparison and analysis. Blockchain records data and transactions, makes analysis and comparisons and pose solutions to identified problems as seen in the data fed. But, there is no means to incorporate and utilise external data as of yet that can increase the effectiveness of the existing process. A perfect example for this is the trade system in public stocks. Though blockchain can record the transactions of stocks being purchased and sold, it is incapable of making price comparisons and cannot be used to purchase stocks especially when there is a price change due to the instability of the market.
2. Employee cost cutting. Since blockchain can perform many functions that used to be manually done by paid labourers, i.e validating transaction exchange, safekeeping transaction records and receipts, and verifying identities, there is a threat that it will take over the jobs of many people in the future. The larger industries have started eyeing the possible cost savings with the use of blockchain in their daily transactions. However, this might be a significant risk for small businesses because they will have to test the adaptability of blockchain to their current business models and systems.
3. Complexity. Since this is a relatively new technology, there are a lot of unknown factors making it more intimidating than it already is. The complexity of the process requires a careful study and immersion that takes an ample amount of time. Since time is a requirement, other tasks may temporarily take the backseat or might be left unaccomplished
4. Challenge on stewardship. It has been agreed that blockchain technology is quite complex. The fragmented platform of blockchain could mean there is a limited support for any platform in contrast to the well managed existing service providers. People who will pilot on the integration of blockchain in their small businesses will be a real challenge to identify as well.
Understanding and knowing the significance of blockchain to the businesses of today will greatly help guide us how we can best adopt and put it to use. After careful consideration of blockchain’s possible impact to businesses, let us now consider the opportunities and benefits we can reap from it.
1. Security. The instance a transaction has been recorded on the blockchain, it cannot be changed. As you enter additional transactions, a mathematical cryptography will protect each block making the security tighter. This is highly beneficial to small businesses that are vulnerable to fraudulent activities. Having a cost-efficient security to safekeep your transaction records will earn the trust of bigger investors and protects the business from possible damage.
2. Feedback utilisation. The transparency of data allows for faster auditing and efficient pooling of feedback is a blockchain technology that allows information regarding installation, maintenance, shipping returns, and decommissioning which are relevant functions critical to the growth of any small, striving business.
3. Transparency of data. Since these transactions are being recorded, anyone can access activity and certain transaction data. The only thing that can’t be accessed are the details of the parties involved in the transactions.
4. Quality check. Since there is transparency of data, then it can be easily audited. Audit is necessary to detect possible fraud, ensure accuracy and reliability in the information.
5. Cost reduction. Blockchain can help with the reduction of costs by eliminating certain activities that require manual labour. The elimination of middlemen and third-party verification are few of the things that the blockchain can help small businesses with in being cost efficient. Since there is a tight verification process involved, the possibility of double sending is also eliminated.
6. Smart accounting and money utilisation. Small businesses will highly leverage on the blockchain feature of sending and receiving payments. It offers a speedy pay out transactions, highly secured money transfers, with no limitation in terms of location. You can send and receive payments all over the world without worrying about fraud and security breach.
7. Accelerates transaction. It only takes as little as 20 seconds for a transaction to be verified by the network under blockchain. As soon as a transaction takes place, it can be recorded real time and it won’t pile up. This process is way faster than manual verification which usually takes days. The absence of the unnecessary middlemen or third-party verification system makes the process faster in blockchain.
8. Higher profitability. With blockchain, small businesses could create a faster and more secured way of distributing products. Blockchain can be used to monitor the flow of supply and distribution, iron out possible disruption for a smoother transaction while ensuring product quality being distributed. This results to a higher profit generation.