The advantages of blockchain and distributed ledger technology in small and medium enterprises (SMEs) are known and clear, but some are more popular than others. Bitcoin, Ethereum, Ripple are good examples of use cases. Bitcoin is being used by a multitude of SMEs as one of the means of payment.
Fruits of Technology
A wide range of sectors such as business, bank, insurance, government, healthcare etc., can gain from this futuristic technology to trim down costs and increase accountability. We are bringing reasons why SMEs might want to delve into blockchain technology.
According to the google search trend, it is seen that the search request for ‘cryptocurrency and blockchain technology’ as a keyword, has soared to around 250% in a period of just 18 months. And these searches play a big part in influencing the market and the prices of digital asset. The novelty has even attracted various authorities and governments including the USA
Thailand SEC, Italy
Consob, CFTC, United Kingdom
FIA, etc., to start developing strong regulations for this lucrative nascent industry.
Actually, it has been discovered that more than 60% of the future jobs will be digital. Some of these existing jobs of ours will be replaced by technology. That is why people with a digital knowledge and skills such as scientists, are on a high demand compared to others, according to the recent LinkedIn
A lot of people associate the technology with the original digital currency Bitcoin. Of course, these two things are inseparable, actually, blockchain is the technology behind Bitcoin (BTC). It is also correct that the success of BTC opened people’s eyes globally to start looking and developing different insights into its supporting technology.
Advantages of Blockchain for Small and Medium Businesses
The main advantages and benefits are actually decentralization, transparency, immutability, auditability, efficiency, lower costs, fast transactions and increased security. Several industry leaders have by now realized substantial business benefits from blockchain.
All transactions happening in the chain are more transparent. The participants with the authority can look at what is taking place on the transactions in the blockchain.
It is possible to track the source of any ledger along the chain to its real place of origin.
Every transaction and data carried out is immediately attached to the block following the completion of all-out verification process. In fact, anything that needs to be recorded in the network is decided by all the ledger members (partakers).
Blockchain enables verification without the need of or any interference from any intermediaries and other third-parties.
The structure of data within the network is append-only, meaning that the data in the network can’t be tampered with (changed or erased).
Using the technology, it is very easy to develop the transaction very fast with much efficiency since the transactions can be carried out directly between the involved participants minus the engagement of any mediator. Blockchain is also a technology behind smart contracts – so the financial activities can be activated automatically, basing on the supporting criteria made in the contract.
Blockchain uses secured cryptography to protect all the data ledgers within the network. Moreover, the existing ledger depends on its end-to-end completed block to finish the cryptography exercise.
The transactions carried out are properly recorded in a chronological order, hence making all the blocks in the network to be time stamped.
In the network, the ledger is decentralized and distributed across each individual node in the system who are the partakers in this case.
When it comes to using smart contracts, it is mandatory that the involved businesses pre-set conditions on the distributed ledger technology. For business to go on as usual, all these set conditions on blockchain have to be first met.
All transactions and data stored in blocks are safely controlled and contained in thousands of millions of computers, smartphones and other devices involved in the chain. The technology is therefore decentralized in nature. The lost data can also be retrieved and easily recovered.
To do anything in the blockchain system, consensus protocols have to be first met in order to certify the entry, and this process help to eliminate the risk of fraud or fake entry.
The blockchain technology gives a permanent audit path for the entire life of an asset even if the asset goes through the hands of many parties since every transaction is recorded indeterminately. This works best when the source data is needed to determine the authenticity and validity of the asset. Currently, a company called Everledger is using this in tracing and tracking diamonds.