Blockchain is a decentralised ledger of transactions that are spread over a network of computers that mine “Blocks” of data to create a blockchain through cryptography.
Blockchain’s great features, such as encryption and continuous data record-keeping, can be of great value to small businesses worldwide. This is because most small businesses process their data manually, which is not a safe way of keeping data due to vulnerability to hacking and abuse.
In this situation, companies could adopt a blockchain technology solution because of its countless advantages, such as:
Safeguarding competition
Many companies, whether startups, SMB’s or already established, are always under pressure to innovate. Innovation offers companies of every size a competitive advantage, and small businesses tend to feel the pressure from their large competitors.
Blockchain is a transformative technology that will bring significant change to small businesses because it transitions from niche technology to mainstream technology.
Through creativity, companies are assured of improved workplace efficiency, thus beating tough competition from large businesses.
Eliminating middlemen
Blockchain presents users with unique safety criteria that allow them to access information in the ledger where transaction data is stored securely without a centralized authority.
This will help cut back on middlemen transaction costs in small businesses, including banks and other financial service providers.
As a result, this will improve transparency, reduce the expense of international transfers, and offer reliable monitoring of small business transactions and operations.
Smart contracts
Smart contracts in blockchains allow two parties to share almost anything of value without third parties’ intervention.
Smart contracts automatically facilitate and verify a contract’s enactment, after all the required conditions have been met. Smart contracts will benefit small businesses because the blockchain system can authorise all contracts that need implementation.
This includes insurance plans, payment agreements, and financial contracts such as start-up loans, controlled on a decentralised ledger, and applied by automated protocols.
Reduced transaction fees
As a form of payment, there are cryptocurrencies such as Bitcoin, Litecoin, Monero, and Zcash that small businesses may use. It is convenient for consumers of cryptocurrency, but still, businesses should embrace it as a form of payment because it is easier, quicker, and completely regulated by the owner.
Image by Pete Linforth from Pixabay
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