Blockchain is a term that we hear often but fully understanding what it means takes more than that. As common as this term has become, its meaning is pretty elusive. However despite that, Blockchain keeps evolving everyday, rapidly turning into a valuable future-proof tool for businesses and consumers. In this context, it goes without saying, that learning more about Blockchain including its meaning is crucial.
Table of contents
#1 What is Blockchain?
#2 What’s so great about Blockchain?
#3 Some statistics
#4 Advantages of using blockchain
#5 Business applications of blockchain
#6 Host Blockchain with CloudCone
#7 Curious to learn more? Check out these amazing related posts
What is Blockchain?
In simple terms Blockchain is a database of transactions that have been carried on using cryptocurrencies. These transactions are stored in the form of blocks that are connected to their preceding blocks, forming an endless chain of blocks (hence, blockchain). It’s basically like a ledger that is spread out across all servers that are connected to the system. This ledger is updated every time a new transaction is added to the chain.
Hope you have a clear idea as to what “Blockchain” is now. But why is it so viral? Why is everyone talking about it? What’s so great about it?
What’s so great about Blockchain?
The greatness of blockchain comes from it’s decentralized expansive nature. Like I’ve mentioned in the previous section of this post, the “ledger” that is blockchain, is spread out across all servers that are part of the blockchain network. One aspect of that expansiveness is the visibility you get, of its entire transaction history. This means that you can see data not just in its latest updated form only, but in a historical view of all data that have ever been available in the past as well. This makes blockchain technology super transparent.
Another reason as to why blockchain’s expansiveness plays to its strengths is because of the strong security it creates. The fact that it’s decentralized system means that hackers won’t be able to find a central point of attack to focus on.
In the modern business and consumer world, transparency, security, visibility and flexibility, all offered by blockchain, can be revolutionary when it comes to storing data. This is what has made blockchain a viral technology. However its transparency suggests that blockchain is also immutable. It’s unable to be changed and transactions can’t be undone. And another issue with this transparency is the lack of anonymity. Every transaction that you do with your public key will be recorded and visible for everyone on the network to see. This is a double-edged sword in security since this can reduce criminal acts while also diminishing your right to privacy.
Statistics reveal that globally, the banking sector alone could generate up to $1 billion in revenue from blockchain-based cryptocurrency. After all blockchain is the technology that has made cryptocurrency possible. All over the world, countries like the USA, Japan, Switzerland and Belarus are rapidly integrating cryptocurrencies into their financial sector. It is also said that by 2022, the global spending on blockchain solutions will reach $11.7 billion. What’s more, according to Deloitte, in 2020 53% of C-suite officers around the world have identified blockchain as a crucial part of their organizational structure. In this same year, blockchain became one of the most highly disruptive technologies. This proves that blockchain has a major role to play in the future of business and consumerism.
Advantages of using blockchain
We already discussed how blockchain is an incredibly transparent, traceable and secure system. These qualities have even managed to give blockchain the nickname of “trustless” network. It means that there doesn’t need to be any special token of trust between business partners. It’s inherent transparency and traceability accounts for that.
However in this section we’ll delve deeper into these advantages and more.
When it comes to storing and updating transactions in blockchain, any updates to the network should be authorized by everyone who’s connected to the network. Since blockchain is a distributed ledger, all participants share a single documentation, as opposed to individual files. Because of this, the updating process of the ledger is consensual and unanimous. Due to this the rate of transparency of blockchain is pretty high.
Earlier we discussed one way in which blockchain is more secure than other database systems. And that is its decentralized expansiveness which makes it really hard for attackers to find a central point of focus to attack. In addition to this, another thing that makes blockchain super secure is the fact that transactions are encrypted before linking to previous transactions. These inherent security aspects of blockchain therefore make it a highly appropriate technology to employ in industries like finance, healthcare and government services, where data security is crucial.
As we discussed above, the expansive view of blockchain allows users to see all transactions that have taken place. So if your company deals with a complicated supply chain process, blockchain is the ideal technology for you. Through blockchain you will have all the supply chain transactions recorded with full transparency so you will get a complete view of all the stops that your product has made or will make in its journey.
4. Efficiency and cost effectivity
The inherent qualities of blockchain, that are transparency, traceability and security make it a very efficient technology to use. This means that unlike in traditional database systems, you wouldn’t have to incur additional expenses or efforts to make sure your database has any of the above qualities.
Business applications of blockchain
We’ve talked about the general benefits of blockchain in the previous sections of this post. It’s clear that this technology has a lot of potential to be used in business. When looking at businesses that currently employ blockchain in their operations there are quite a few applications that can be found.
1. Smart Contracts
Smart contracts is a business trend that takes advantage of Blockchain’s transparency and reliability. When transactions are made between two business parties it’s important that there is trust. But often when it comes to traditional contracts there is a chance for one party to make a commitment and for the other party to renege on the agreement. This chance is eliminated in “smart contracts”. Smart contracts are self-automated programs that are designed to carry out the terms of any contract. A financial security is held and later routed to recipients based on their fulfilment of the contract.
A company that uses this technology is Slock. With Slock, customers can adopt blockchain enabled IoT for their own businesses. One such example is allowing their customers to rent out bicycles where a smart lock can be unlocked when both parties agree on the contract’s terms.
2. Supply chain
Supply chain is one of the most popular applications of blockchain. Brand reputation management is one reason as to why blockchain is now applied in supply chain. For a brand to deliver a final product, it goes through multiple stops with multiple parties involved. If one of these parties fails to their part right and causes a defect in the final product, then the brand will be most likely to experience backlash and get their reputation hurt.
Blockchain’s transparency and traceability comes in handy in supply chain as well so that stakeholders can observe the entire process of how a product came to be. And if there is a defect in the final product it would be easy to figure out. Two companies that use blockchain in supply chain are Provenance and SkuChain.
3. Using Blockchain to pay employees
Blockchain is an amazing technology to use when it comes to paying international employees. If you have full time employees or contractors working for you from foreign countries, blockchain can help reduce the time and the costs is takes for money to be transferred internationally.
An example of that is Bitwage. Bitwage is a blockchain payroll service which circumvents any costly fees and the time taken to transfer money through traditional routes. And this is a completely transparent process because you can actually see where the money is, where it has come from, and where it goes from there.
Host blockchain with CloudCone
If you own a business or are planning to launch one, and would like to adopt blockchain you can implement it on our private cloud solution. Hosting on our private cloud can save you up to 60% of operational costs and since blockchain is already a cost-cutting efficient technology this would double the advantage. In addition to this blockchain, being as expansive as it is, requires servers that can hold considerable loads. Hence our private cloud is ideal.
Blockchain has the potential to bring about a new era of business and is arguably one of the biggest business trends of the future thanks to its many advantages. So it’s a great technology to invest in if you’re planning to future-proof your business.
Curious to learn more? Check out these amazing related posts:
While you’re researching about more futuristic business trends like this, you might as well want to check up on your WordPress security. In a time of heightened online activity we’ve got you covered with a post on how to keep your WordPress site secure.
Another helpful article for you to future-proof your business would be this blog post on cloud native technologies. Cloud nativity means being completely affluent in the ways of the cloud and how cloud can improve your business. And statistics reveal that businesses that take a cloud native approach towards their business tech are most likely to thrive in the future. So go ahead and check it out.
That ends today’s post. Reach out to us if you have any concerns, suggestions, or general feedback.