For most people, blockchain is, first and foremost, associated with cryptocurrencies. That’s true, of course, but that’s only one of its applications. For businesses, blockchain is the basis for cool software solutions.
Of course, businesses don’t build blockchain-based software on their own (at least, that’s not what most of them do). Instead, they order custom blockchain solutions from a reputed agency and improve certain areas of their performance with their help. Below are a few examples of what those areas are.
1. Make Record-Keeping Transparent and Immutable
There are two cool things about transactions that are stored on blockchain:
- each of them is visible to all parties involved
- none of them can be altered once validated.
So you see what this implies for businesses: record-keeping gets more accountable and transparent. This is super helpful for financial records, property titles, and tracking product shipments.
The beauty of blockchain technology is that it reduces fraud because every entry is time-stamped and cryptographically secured. For example, if a retail company uses blockchain for inventory management, it sees every product movement in real time, which means fewer errors and more auditing capabilities.
2. Streamline Cross-Border Payments and Transactions
There are at least three big issues with international business transactions:
- delays
- high fees
- regulatory bottlenecks.
Blockchain can help with these because it allows peer-to-peer transactions (middlemen like banks and payment processors are thus removed).
Say, cross-border payments take up to 5 days and the fees are up to 10%. With blockchain, this is reduced to minutes and some transactions are free. So if your business deals with international clients or suppliers, blockchain-based payment systems are certainly worth considering.
3. Cut Fees by Removing Costly Intermediaries
The problem with intermediaries — a bank, a lawyer, a broker, etc. — is that each of them charges their fees. That’s why the use of blockchain, where there are no intermediaries, reduces fees significantly (sometimes, eliminates them). That’s especially relevant to payment processing, real estate, and insurance.
That is, a business that uses blockchain to handle property transactions can largely reduce legal and brokerage fees. The entire process will be handled by a secure, automated blockchain environment.
4. Automate Contract Execution with Smart Contracts
Smart contracts automate contract terms when predefined conditions are met. For instance, payments can be automatically released when goods are delivered (or services are rendered). No need for manual follow-ups, no risk of human error.
Businesses in practically all industries work with contracts: real estate, logistics, service industries. And they all can benefit greatly from their automation.
In logistics, for example, a company can use smart contracts to automatically release payments to suppliers after verfied delivery. This should reduce delays and improve supplier relationships in the long run.
5. Facilitate Identity Management
Some blockchain-based solutions can verify identities securely. Each person or entity stores their identity credentials in a tamper-proof manner. The latter can be verified through the blockchain. This is particularly important for businesses that require strict compliance with regulatory standards (e.g., financial institutions or healthcare providers).
For a financial services firm, for instance, blockchain can be the basis for a strong Know Your Customer (KYC) process. It will reduce paperwork and speed up customer onboarding.
6. Make the Supply Chain Traceable
Transparency is useful everywhere and in the supply chain in particular. This is because the latter involves many stakeholders and many steps where something can go wrong. With blockchain, your business can trace and verify it all from the start to the end, from raw materials to the finished product.
The first example that comes to mind in this regard is clothing manufacturing. Here, blockchain can help to ensure that products are made from ethically sourced materials as it will track the entire production process.
7. Prevent Unauthorized Access
With blockchain, data is encrypted. This means one can only access it if they have the correct cryptographic keys. That’s a real find for businesses handling sensitive information (e.g., healthcare providers, financial firms, legal services, etc.).
As you see, blockchain can do quite a lot of useful stuff for your business (transparency in different areas is perhaps the most meaningful of all). Your primary task here is to choose a development agency that knows how to build strong software based on it.