Blockchain technology is expected to impact businesses and small and medium enterprises (SMEs), which is somewhat a risk and a great opportunity simultaneously. For some small businesses, especially those dealing with data or managing complex transactions, adopting a crypto business account could entirely change the way they work.
What Is Cryptocurrency?
Cryptocurrency is a digital currency that uses cryptography for security. Cryptocurrencies are difficult to counterfeit because of their security feature. Many cryptocurrencies are decentralized systems based on blockchain technology, a distributed and shared ledger using a network of many different computers.
The distinctive feature and arguably the main appeal of cryptocurrencies is their systemic nature. Cryptocurrencies are theoretically immune to government intervention or manipulation. The first blockchain-based cryptocurrency was Bitcoin, which is still the most popular and valuable cryptocurrency.
How Does Blockchain Works?
Bitcoin exists entirely online and is not regulated by a central bank. To avoid double-spending, every time a transaction with Bitcoin occurs, a block is formed to record that transaction.
The users in the system are known to be miners who turn on their computers continuously day and night to confirm transactions taking place automatically. Every time a miner does that, they earn some Bitcoin. The system has been running for eight years and is reasonably well established for businesses to accept Bitcoin as a payment method for goods and services. Hundreds of other cryptocurrencies have emerged and used similar techniques.
However, blockchain is not just about money. It is a chain of linked transactions, all confirmed by a 3rd party – the distributed ledger – in immutable blockchains. For all transactions from this chain, the block contains the reference algorithm related to the block that precedes and follows it. Even if you know the contents of a block, you cannot automatically view the information contained in that chain. This point makes blockchain technology highly secure.
The Benefits Of Cryptocurrencies For Business
Cryptocurrencies make it easier to transfer funds directly between two parties in a transaction without the need for a third party such as a bank or credit card company. This transfer is facilitated through the use of public and private keys for security purposes.
In modern cryptocurrency systems, a user’s “wallet” or account address has a public and private key that is used to sign transactions. Transfers are made with minimal transaction fees, helping users avoid the high fees banks and financial institutions charge for wire transfers.
The main appeal of Bitcoin is the blockchain technology it uses to store an online ledger of all transactions made in bitcoin, providing a data structure for this ledger and helping it limit the threat from hackers, and can be replicated on all computers running Bitcoin software.
Each newly created Bitcoin block must be verified by the ledger of each user in the market, making it nearly impossible to tamper with transaction history. Many experts see blockchain as having critical applications in technologies such as online voting and crowdfunding and reducing transaction costs.
So What Role Does Cryptocurrency Play For Your Business?
At work, there are many situations when you have to record all transactions appropriately, and it is even more laborious when it involves the interests of many parties. What do you think about uniform auditing, the steps to complete a contract or connection in the supply chain?
Ethereum was developed in 2015 and is a simple way to build a distributed applications or Dapps. These applications integrate all the benefits of blockchain technology with commercial-critical security. You may not realize that systems are using DLT, but you will notice some changes at enterprises as follows.
Improved cash flow
Smart contracts created by a DLT system can automatically pay bills immediately after a transaction is completed. Instead of waiting for approval from multiple levels, anyone in the system, from the supplier to the project manager or the quality supervisor, can know the requirements and sign for them. Once everything is finalized, the block will close, and the payment will be automatically processed.
Economizing the supply chain system
How can you be sure of the provenance of the product you make or buy? DLT provides a transparent, consistent chain of records and proves whether the raw materials are clean and whether the safety and health procedures are in place at the factories.
If you provide a service that requires follow-up appointments, such as a physical exam or cosmetic consultation, the booking will automatically be made after the first appointment. At the same time, customers will also be asked to confirm the appointment schedule on the system. This will reduce your administrative burden and prevent customers not coming. Currently, a number of international hospitals are already using the system, such as Prince Court in Malaysia and others in Singapore.
Simplify intermediate units
If two businesses can come to an agreement to cooperate without intermediaries, it is a great thing to save costs. However, it is not very lucky if you are working as a broker. You will need to think about adding value to your customers by means other than simply conducting a transaction. Here, the specific units we refer to are banks and depository institutions. The tourism industry also has to deal with the same problem with tourists being able to book hotels directly without the need for staff. Prepare your business now.
Digital identity papers
How many times have you had to show your passport, identity card, or driver’s license to check? If all of the above personal information is stored in a fixed chain, it will be used to verify your personal information at any time when required. The United Nations is in the process of developing DLT for refugees and undocumented people. Businesses will also no longer waste time providing paperwork to apply for business incorporation, tax registration, etc.
Blockchain technology in general and bitcoin, in particular, has changed the economy, finance, and perceptions about the future world like digital money, requiring people to understand the technology and have contingency plans to adapt to the new – the digital world. This is the time for new ideas to take shape. So will your business take advantage of this opportunity?
The post How Businesses Can Reap The Benefits of Cryptocurrency first appeared on Mind My Business.