From the Coronavirus pandemic to increasing gun violence, the 21st century will be remembered for many things. But most importantly, it will be remembered for blockchain technology. A cutting-edge Distributed Ledger Technology, the blockchain technology has landed a revolution in the whole wide world. The technology is especially famous for cryptocurrency, another phenomenal development of the 21st century. But the versatile technology of blockchain is not limited to cryptos only, rather it brings a positive disruption for many other industries as well, ranging from finance to healthcare. In other worlds, blockchain technology is fast becoming a colossal transformative force for businesses, changing the way how organizations operate and also the money factor.
Last year, around $6.6 billion was spent on blockchain-based solutions. And the numbers are only rising. By 2024, the overall spending on this revolutionary technology is estimated to touch a whopping $19 billion.
We will delve deeper into how blockchain technology has been transforming business and money. But before that, let’s have a few words about the disruptive technology.
Snippets on blockchain technology
As mentioned previously, blockchain technology is a breakthrough DLT or Distributed Ledger Technology. It houses a decentralized shared database that is devoid of any kind of centralized control. The public nature of the ledger assures easy transparency between all the members of a blockchain. Each block in the blockchain is time-stamped and every data that is stored into the blocks is always protected by advanced cryptography encryption.
Another major feature of blockchain technology is immutability. It means once you enter data into the blockchain, it cannot be manipulated or modified even by the blockchain participants.
Every blockchain verifies each of the new blocks before adding it into the existing blockchain. The verification is determined by the specific consensus mechanism adopted by the blockchain. The two major blockchain consensus mechanisms are Proof-of-Work and Proof-of-Stake.
How is blockchain disrupting businesses and money?
Blockchain technology is pioneering a positive change in the business sector all across the world. The DLT technology has shown to improve transparency within business communication and operations, facilitate traceability of products, assets, or data, enhance market access- as well as scale up transaction efficiency. In other words, blockchain technology holds the potential to make organizations and businesses more efficient, secured, and more powerful than ever. Alongside, the technology is also changing the face of money- blockchain technology is often predicted to be the backbone of the future monetary system in the mainstream economy.
A wide gamut of business organizations has already started working with blockchain technology. An even greater number of organizations has proposed to adopt blockchain technology in their operations in future.
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From the leading search engines to the esteemed payment processing platforms to largest tech firms, businesses from several industries are now working with blockchain technology. Other industries that have also embraced blockchain technology are entertainment, retail, health care, insurance, logistics, and so on.
How is blockchain changing the face of money?
Before getting into how blockchain technology is transforming businesses, it’s necessary to know how the DLT technology is disrupting the money scene.
- New form of currency
First, the blockchain technology has helped to introduce digital currency, a new form of currency to the economy scene. It is officially termed as “cryptocurrency”. Though cryptocurrency is yet to receive complete recognition in the mainstream economy yet the concept is fast gaining momentum across the world. Cryptocurrencies serve as both “store of value” and means of exchange. In fact, Bitcoin, the #1 cryptocurrency has already received legal tender from not one but two countries.
- Universal currency
Unlike fiat money, cryptocurrencies developed in blockchain technology hold universal value all across the world. For example, the value of Bitcoin would be the same whether you are in Sweden or the USA. This way, blockchain technology has eliminated the hassle of exchanging currencies during international visits.
- Democratization of money
Cryptocurrencies developed on blockchain technology are backed by a decentralized infrastructure. The crypto transactions are always P2P that eliminates control by any intermediary or centralized authority. As a result, crypto transactions are always more convenient and more affordable (no fee for middlemen) than fiat that makes it easier to adopt even for the unbanked populace.
How blockchain is changing the face of business?
- Faster and affordable monetary transactions
Monetary transactions are one of the most crucial aspects of any business. The blockchain technology helps to make the whole thing more affordable, transparent, and way faster than the traditional transaction process. Credit goes to the decentralized nature of blockchain technology that cuts out middlemen and related intermediary fees from between. It makes the whole system more economical, streamlined, and faster.
- Allows global expansion
What is the one major cause that has always deterred many businesses from expanding internationally? Well, it is the high cost of international transactions and dealings. But, blockchain technology puts an end to the problem.
The blockchain technology solves the problem in two ways. First, the decentralized nature of the DLT technology eliminates the high intermediary costs involved with international transactions. Then, blockchain-based cryptocurrencies carry universal value. So, if they use crypto, entrepreneurs from 3rd world countries won’t have to worry about the high costs of currencies in the first world countries- as we see with fiat currency.
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- Benefit of smart contracts
Smart contracts are surely one of the most amazing aspects of blockchain technology. These are digital-based self-executing contracts that can automatically execute a transaction or a service once a set of pre-specified conditions have been met. Smart contracts help businesses to achieve both speed and efficiency in their operations and transactions.
- Easier management of supply chain
The shared ledger of blockchain technology assures complete transparency for every participant in a supply chain environment. This assures clear communication, thereby reducing risks of misunderstanding and errors with data transmission. As a result, businesses will have to spend less time on data validation that will eventually assure faster shipping of the inventory.
- More security
The blockchain technology prevents risks of data breach for businesses through its decentralized structure. Moreover, the advanced cryptography protection and immutability aspect of the technology assure a highly optimized layer of security for sensitive business contracts.
