What Small Businesses Need to Know About Blockchain

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Ever since blockchain technology was first introduced to the world in the early 2010s it was clear the idea will cause major ripples across the business world. Now, ten years later we can do nothing but confirm these expectations.

Sure, cryptocurrencies didn’t exactly tear down the traditional banking system as some people hoped but Bitcoin and its peers still managed to become a critical part of the financial landscape. What’s even more important is that blockchain technology found numerous other applications and built itself right to the core of the modern business world.

So, what does this system of recording information do for your small business, and is there any way you can use the tech to improve its operations? Let us try to find out.

What exactly is blockchain technology?

lady with coin

We will start by clearing up what blockchain technology is actually all about.  In the simplest terms, blockchain represents one massive continuously updated digital record of who holds what at any given moment. The information regarding that ownership (time and date of the transaction, owner, dollar value, etc.) is encrypted into a block and linked to similar blocks to form a sort of digital chain.

Since these chains exist across countless devices around the world, all participants have the access to the same information, laying the foundations for perfect transparency and instant transactions. It is also important to know that blockchains have no central authority but rather exist as a self-regulating system where all participants have equal rights.

How does blockchain tie to digital currencies?

So how this technology produces the digital coins you can use for exchange? Well, when some digital currency is created the people who are exchanging it need some form of infrastructure to perform and record the transactions. These records are then sent to blockchain users where they are encrypted and validated thus becoming another block in the chain.

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This process is called mining. Depending on the processing power used for mining, the users are rewarded with a certain amount of digital currency. The only thing you need in the end is to find the best online crypto wallet app and you will be able to use your assets virtually anywhere in the world.

Although its status is still unregulated in a majority of the countries in the world, the exchange of Bitcoin is perfectly legal. As a matter of hand, the currency is outright banned in only a handful of countries like Bahrain, Georgia, Libya, and Vietnam.

The benefits of blockchain technology for small and medium companies

crypto

So, with all these things said, it is clear that blockchain technology presents a streamlined platform for international exchange free of fees or interference from regulatory bodies. How do these things translate to the SMB sector?

Offering new payment options to international customers

One of the best things about blockchain technology is that anyone with a decent PC and affordable graphic card can take a part in it. All these users make a vast pool of international customers that would appreciate the option to pay for their goods with Bitcoin and other digital currencies rather than dealing with expensive international exchange. This way, the company becomes much more competitive.

Creating non-fungible tokens (NFTs)

Essentially, NFTs are unique pieces of code that don’t have a traditional value associated with them. Much like other assets that can’t be replicated (e.g. pieces of art) they are worth as much as people are willing to pay for them which can sometimes turn out to be quite a lot. According to recent stats, trading NFTs has reached the value of $22 billion so it represents a very lucrative additional source of revenue for your company.

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Showing how the products are sourced

Of course, blockchain technology doesn’t have to be used exclusively as the foundation for trading digital currencies. Some small and medium companies use this tech as a digital distribution ledger. Since each ledger serves as a permanent record, the blockchains are an excellent way for tracking how the products are manufactured and sourced and putting eventual environmental concerns to rest.

Cheap, efficient, and safe cloud storage

Last but not least, blockchains are able to hold massive amounts of data, the tech represents a great alternative to traditional cloud storage options. The main difference is that, due to built-in encrypted properties and high mobility, blockchains often represent a much safer and more practical option. Also, the maintenance costs since the services are not provided by some third-party vendor like Google or Amazon.

In conclusion

We hope these few considerations gave you a general idea about blockchain technology and the ways in which its benefits can be implemented in the SMB sector. Over the last couple of years, this tech has passed a long way from a novel idea to one of the most important business assets you can acquire. Keep in mind these things when making the development strategy for the next year. Every opportunity to get ahead of the competition can and should be used.