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The Importance of Blockchain Technology in an Enterprise Business

December 6, 2022

The Importance of Blockchain Technology in an Enterprise Business

You’ll have heard about blockchain technology if you’ve been active in the digital space for some time now. This technology has been the driving force behind a completely different type of asset – cryptocurrencies. While cryptocurrencies have been a huge success, many experts have explained that blockchain can be used for more than just processing transactions.

Yes, blockchain technology can also be applied to your business. As many businesses are looking to simplify their operations while maintaining the speed of delivery, blockchain is the ideal method to get what you want. But how exactly does the blockchain benefit businesses? Keep reading to find out. This piece will reveal the importance of blockchain in enterprise business.

What is Blockchain?

Before you learn how to use blockchain for business transformation, let’s briefly explain this innovative technology.

In simple terms, blockchain is a distributed ledger technology comprising shared, encrypted data accessible in different locations. As its name implies, blockchain is a continuous link of digital blocks. Blockchain technology has grown relatively popular because it allows people to write on it, but no data can be deleted from the ledger.

For instance, a warehouse manager could store information about his inventory on the blockchain. Anytime the inventory is restocked, the blockchain is updated using compatible devices. This means that he can easily track any inventory restock from the past. And that’s without fear of the data being deleted. In this example, blockchain acts as a control mechanism that will let the warehouse manager easily detect if anything has gone wrong with the inventory.

This system is entirely different from recording this information on a spreadsheet package that can easily be edited and adjusted by anyone. Everyone (including the warehouse manager, production managers, and audit personnel) can access the same data version. Before now, many businesses, operational heads, and service providers had to maintain their records. This often led to disagreements and strenuous reconciliation processes.

The entire world has been interested in a technology that will allow many people to access a single data source simultaneously. Blockchain is the answer to this demand. In more ways than one, blockchain ensures data quality and presents one source of truth for everyone involved.

What is the Importance of Blockchain in An Enterprise Business?

Now, let’s review the benefits of blockchain technology. We’ve established that blockchain is a unique source of data that allows everyone to access the same information without fear of loss or tampering. It’s important to clarify that blockchain technology can be used for more than just crypto trading. So, what are the benefits of blockchain for small businesses?

Digital technology and cryptography experts have identified the following benefits that blockchain could offer every business owner;

Creates Trust Between Business Entities

Due to the nature of blockchain technology, it can easily create trust between different business entities. When you keep in mind that blockchain cannot be edited and tampered with, it’s clear that this technology ensures businesses can access the same information at all times.

As a result, businesses will be more willing to share data and confidential information because they know it will be in safe hands. What’s more? They won’t need a third party to facilitate this data transfer.

This level of trust will make it easier for different parties to seal deals and complete transactions without fear. In business, trust is everything, and when you can create a platform for uninterrupted data sharing, your business will benefit. Bitcoin and cryptocurrencies are good examples of the benefits of unlimited sharing using blockchain.

Supports Decentralized Structures

Another importance of blockchain technology in business is Decentralization. Blockchain technology is famous not just for being a secure store of data. But it also supports decentralization. The concept of decentralization means that transfers can be made, and deals can be signed without third-party interference.

Blockchain has proven its value because the system will run efficiently without a central actor or body. The decentralized ecosystem is faster and cheaper to use than its centralized counterparts.

The decentralization of blockchain technology can be introduced to your business. By incorporating the blockchain system into your operations, your business operations will occur unhindered and unrestricted. For instance, a typical supply chain usually involves multiple companies, suppliers, distributors, courier services, producers, and retailers.

All these entities will demand a steady supply of information in real-time. However, it can be strenuous and time-wasting when they must wait for a central body to distribute the essential data. With blockchain, everyone will get the information they need whenever needed.

What’s more? This decentralized system is relatively cheaper to use.

Creates Improved Security and Privacy

The earlier parts of this piece have emphasized the importance of blockchain in offering businesses a secure means of exchange for their transactions and data sharing. It’s safe to say that this benefit serves multiple businesses well. Considering that the information stored on the blockchain cannot be altered or changed, they can rest assured that they are safe from data theft.

There’s also little chance of getting hacked. Why? Most traditional computer systems store all their data in a centralized point, such as services. However, Blockchain technology is effectively stored on multiple computers in different parts of the world. This ecosystem can also create anonymity. To do this, users can add permissions to traditional computer systems to reduce unauthorized access.

Improves Speed of Transactions

The blockchain is interested in replacing slow, manual processes in our daily lives. Unlike most conventional systems today, the blockchain can support multiple processes simultaneously. Recent blockchains can process thousands of transactions per second.

For instance, Solana’s decentralized protocol can process up to 65,000 transactions per second. While the speed of different blockchain networks differs, you can rest assured that you’ll still enjoy a speed that is faster than most traditional means.

The speed of processing operations on the blockchain varies depending on factors such as the size of each block and network traffic. Blockchain technology isn’t without its pitfalls, but it still stands out in the digital space.  In one of the most recent applications on the impact of blockchain technology in business, Walmart used this decentralized network to trace the source of sliced mangoes. This process would previously have taken up to a week.

Supports Cheaper Transaction Fees

Another importance of blockchain technology in business is that it can help you greatly reduce your costs. By eliminating multiple manual processes, blockchain is cheaper to use. Your business will gain access to reports and audit controls in more seconds. There are also not going to be any arbitrary maintenance costs. You see, blockchains can process crypto transactions for as low as $0.0005.

Due to the impact of blockchain, your business will be able to cut out middlemen and lengthy processes. This will result in huge cost savings. When you consider the insignificant

Offers Flexible Traceability

Well, the blockchain ecosystem will remain unaltered for many years. Any information recorded on it will remain the same in the future. Due to this near-permanent nature of the data found on the blockchain, it’s easy to trace the origin of transactions. This would guarantee that fraudulent processes can easily be detected.

Beside from fraud detection, the blockchain’s traceability can be used for other purposes as well.

Offers Better Control of Data

Despite the fact that the blockchain supports a large number of transactions per second, it still offers individual users a reasonable amount of control over their data. In our current world, data is everything, and blockchain technology effectively helps you bridge the gap.

It also ensures that you’re completely in control of the different activities that occur around you. Through blockchain technology, it’s possible for a person to decide which pieces of data they want to share and who they wish to share with. Using blockchain smart contracts, users will have even more control over how others interact with them.

Conclusion

And that’s all for this piece. Without any doubt, blockchain technology can improve the operations of an enterprise business. Before now, many people struggled to identify the benefits of this innovative technology, but we have access to more data today.

By understanding how the blockchain works, it’s possible to decide how to use it best. Your small business will be able to process transactions and operations quickly and cheaply. It will also be easier to automate certain processes. This blockchain technology can also be applied to different industries, including finance, retail, non-profit, and healthcare. Depending on your area of focus, you can go ahead to start a blockchain business. It may be tough to incorporate all the technology at once. But once it’s completed, the rewards will be immense.

Written by Tauseef Azhar

October 12, 2022

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