We’ve seen blockchain progress over the last few years from a system with high levels of risk and unpredictability, to a system with business-wide benefits for all industries. Blockchain is an impressive alternative to traditional banking and cryptocurrency, providing new ways to track financial transactions. Real-life use cases have shown the value that blockchain can provide for your business. Looking at its benefits closely we can identify how blockchain can help your organisation perform more efficiently and securely.
How blockchain works
To know how it provides value to your business, we first need to understand what blockchain is and how it works. Put plainly, blockchain is the record-keeping technology behind digital transactions. Blockchain is a distributed ledger that shares digital information publicly. As blocks are viewable by anyone on the chain, the data is protected by public witnesses. The blocks store digital information about transactional history including the date, time, cost and owner. Differing from bitcoin and other cryptocurrencies associated with blockchain, the data is not anonymous – just confidential.
While they may look identical, the blocks are unique to each transaction using an identifiable code that differentiates the transactions made, even when all the details are exactly the same. Each block added to the chain creates an overall picture and timeline of valuable data. Being publicly available, anyone can verify that an event actually took place. Making any changes to a block on the chain would impact every block added after the amended one.
Provides proof of ownership
One key value-adding benefit that blockchain provides is proof of ownership and authenticity. For companies trading valuable assets between organisations or individual customers, reams of paperwork and multiple lawyers are needed to verify the relationship. For digital assets that don’t leave a paper trail, how do you verify the transaction? Blockchain provides digital proof with all the relevant data needed to ensure the transaction can be tracked. This technology is particularly helpful in the art and technology industries who are at risk of stolen assets and copyright issues. These businesses can publish ownership on the blockchain so finances are unable to fall under the radar or be mistreated. As the blockchain is virtually unhackable, being unable to overwrite or hide transactions helps to prevent fraudulent activity often experienced in banking and financial services.
Supports GDPR and security
As briefly mentioned above, blockchain contains highly encrypted data that is near-impossible to hack. The chain operates on a network of computers, each with shared responsibility. It isn’t controlled by one single entity; the blockchain is shared across all keepers who must verify any additions to the chain. The highly encrypted software makes blockchain incredibly difficult to hack – each block on the chain has to be attacked simultaneously to break the chain and leak digital information. If one block is attacked, the others remain intact. Layers and layers of security procedures makes the technology particularly useful for governmental organisations. For matters of national security, blockchain prevents embargoed information from being outed by a hacker or data breach in the system.
By removing the third party from transactions, you can save money and time using blockchain. Paying your employees every month can take days to register in your account, particularly when paying employees internationally. If this is done manually, you’re limited to banking business hours which can put you at risk of late payments and unhappy employees. Blockchain is available at all times making it an ideal solution to transferring payments overseas. For remote workers and contracted services, businesses and individuals can track the transaction at each point along its journey. This ensures transparency is at the forefront of your business operations and provides peace of mind for all parties involved.
Not suitable for every business
While blockchain is the current buzzword flying around the industry with seemingly countless benefits, it’s important to note that it won’t be applicable to every business. Blockchain is not anonymous. Anything on the chain can be viewed by someone with access to it. In the health and medical industries, confidentiality is paramount. If data is publically available it breaches patient confidentiality and puts individuals at risk of fraudulent activity. If your business requires one centralised system controlled by a trusted entity, blockchain isn’t the technology for you. If your current technology works for you effectively, don’t rush into adopting blockchain.
Blockchain will continue to evolve at a rapid pace. As it develops, businesses will become aware of its benefits and adopt it within their everyday operations. Providing value across products and services, HR and finance, blockchain may provide a solution for your business’ security and transactional needs.