Blockchain became an overnight sensation in 2009 and has been gaining popularity ever since. While it is still synonymous with cryptocurrency for the layman, blockchain is versatile and highly useful in various other industries. Be it manufacturing, education, or finance, blockchain technology can streamline internal processes and increase overall efficiency.
Leading global brands, nonprofit organizations, and even government agencies use blockchain. According to MarketsandMarkets, the global blockchain market is expected to reach $94 billion by 2027. Additionally, Gartner states blockchain will generate around $3.1 trillion in business value by 2030. Statista shows that blockchain spending around the globe will be almost $19 billion by 2024.
Let’s look at the benefits of using blockchain for business efficiency.
Benefits of Blockchain Technology for Businesses
Businesses can hire AI and blockchain development companies to build a network from scratch or through open-source solutions. It can be customized to suit business specifications for the project. A few major benefits of using blockchain for business are as follows:
Decentralization
Blockchain technology promotes a decentralized structure, which enables decision-making at various levels instead of limiting it to the central authority. All employees who have access to the network can see the shared data (ledger) and stay up to date. The inherent distributed nature of blockchain networks simplifies data sharing without compromising security. Businesses can use the network to set up automated financial transactions with vendors, suppliers, employees, partners, and other stakeholders.
Transparency and Trust
Blockchain has its own record-keeping mechanism that allows businesses to make the processes more transparent. When each stage of the process is visible, it creates a sense of trust in employees and consumers. This reduces ambiguity and minimizes the risk of data tampering. For example, a transaction recorded on a blockchain will also show where and how the data has been edited. The network users will be aware of the updated information. This also prevents fraudulent transactions. From the customer’s point of view, they can gain insight into the supply chain by scanning the QR code to access the records saved on the blockchain.
Data Security and Privacy
Another benefit of blockchain development is better data security and privacy. When an action takes place on the blockchain, it is recorded and stored on the network. This record cannot be altered. It also has end-to-end encryption which minimizes the risk of fraud. Furthermore, blockchain systems prevent unauthorized activity. The data cannot be accessed through traditional hacking methods. While blockchain networks are not 100% fail-proof, these offer better data security than conventional storage models. Moreover, blockchain allows anonymity (of data and users), which enhances data privacy.
Cost-Effectiveness
Though setting up a blockchain network will need an initial investment, it will deliver high ROI in the long run. That’s because blockchain streamlines the processes to eliminate recurring or unwanted manual actions. It automates certain tasks like data aggregation, record-keeping, data amending, auditing, and reporting. This saves time and resources for the business. Furthermore, blockchain removes third parties and middlemen from the network. For example, by using a blockchain network for payments, the business can directly send payment to the vendor/ supplier without routing the money through a bank or a third-party entity. It facilitates cross-border transactions in real-time by eliminating the need for currency conversion.
Greater Speed and Efficiency
Since blockchain technology offers automation and seamless transactions, it accelerates processes and increases productivity. Compared to traditional methods, using blockchain will take less time to complete a transaction. The consensus mechanism is responsible for this. However, the actual time taken depends on various factors like transaction volume, network capacity, etc. Banks, financial institutions, insurance companies, healthcare centers, etc., can use blockchain to speed up the backend processes. Manufacturing and consumer goods industries can use blockchain to overcome communication challenges, resolve disputes faster, and quickly identify the issues in the supply chain.
Monitoring and Record-Keeping
Blockchain networks offer better visibility, transparency, and traceability due to the default monitoring and record-keeping abilities. No transaction or action that takes place on the blockchain can be hidden or removed. Every step is monitored and stored in an immutable record with data and time stamps. These records are stored at different nodes in the network, making it even harder to tamper with the details. Since businesses mostly use private blockchain networks, the entire data will be secure. Employees can access the records whenever necessary to find the information they need.
Role of Blockchain in Supply Chain Management
With blockchain development services, businesses can improve supply chain efficiency, eliminate roadblocks, save resources, and enhance customer satisfaction. Since the supply chain involves many entities like the supplier, manufacturer, distributor, retailer, and customer, it causes constant concerns for the business.
Blockchain helps eliminate these issues in the following ways:
Streamline Communication
Miscommunication in the supply chain is a common cause of delays and losses for many businesses. This is due to the various parties involved in the process. However, blockchain technology can prevent communication problems through its distributed ledger and real-time data-sharing abilities. Everyone involved will have access to the necessary information for cross-verification. This resolves disputes faster instead of leaving them unattended for weeks and months.
Data Confidentiality
Data confidentiality is also a concern in supply chains as many people can access sensitive information. Businesses cannot hide this data either as it would lead to other delays. So investing in blockchain networks is one of the best ways to ensure data confidentiality, security, and privacy while still sharing it with everyone. Blockchain allows businesses to set role-based authorized access. This limits which data the parties can see or what they do with it. For example, consumers can view the reports but cannot alter them.
Greater Visibility
Today’s customers don’t just buy a product. They want to know more about the raw materials, the sources of these materials, the manufacturing process, etc. They want to support businesses with sustainable and eco-friendly processes. Blockchain network makes it easier to provide this information to customers. It increases the visibility of each stage of the supply chain and allows businesses to share the data with customers.
Conclusion
Integrating blockchain technology into your business process can bring good benefits to your establishment and lead the way for digital transformation.
ProMindsAILabs offers tailored blockchain development services to help organizations and enterprises from different industries overcome challenges and achieve their objectives. Accelerate innovation, productivity, and success by partnering with a reputed blockchain service provider.
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