The appearance of blockchain technology and its use in business will make a breakthrough in any commercial activity.
Blockchain is the technology of decentralized information storage. Information that can be accessed by everyone. Decentralized – because it is stored not on one particular server, but on all computers involved in the blockchain. You can build your own blockchain, or use the ready-made solutions of the blockchain as a service, or BaaS.
The information recorded in the blockchain can not be deleted or changed. If we talk about the cryptocurrency, the blockchain saves the entire transaction history, while still retaining the anonymity of the participants in the transaction. This is the foundation of the development of cryptocurrencies exchanges.
Each entrepreneur during the construction of a business strategy thinks about the risks of losing important information, and also invests huge funds in ensuring the livelihoods of all business processes. And now imagine that you have an opportunity to get rid of such risks, and to automate the business processes as much as possible.
Thanks to the blockchain, it is impossible to destroy, change or lose information. Millions of computers around the world serve as a guarantor.
What can blockchain be useful for business?
In the first place, of course, it is worth mentioning the cryptocurrency. The digital currency of the new generation can become an absolutely innovative means of payment, devoid of all the shortcomings of modern money.
With money turnover, whether it is payment for goods, services or investments, any enterprise and any person depend on financial institutions.
The calculation in the cryptocurrency allows to remove the intermediary in the relations between the supplier and the client. We also talked about how to integrate blocking into your business, but from a different perspective.
Your transactions, no one else can control, “freeze“, withdraw a commission for transfer or in any other way affect you. Only you and your client independently control the movement of money in the registries of the detachment. In addition, the calculation in the cryptocurrency is a decentralized method of payment.
If earlier it took time to process the transaction by the bank, the movement of the cryptocurrency is instantaneous. Blockade has no days off or public holidays. There is no failure of the system or political bias against the currency of any country.
Secondly, blockchain is an eternal way of storing information. Any commercial contract, ownership, patent for the product will be assigned to you, and it is impossible to change this information in principle.
If you need to verify ownership of a product, you can make the information in blocks available to everyone.
Otherwise, only you and those to whom you give permission will own the information. But the information itself will be stored on the millions of computers involved in the blockchain, and therefore destroy it or lose it is impossible.
Automation of business processes
Blockchain technology gives us the opportunity to conclude “smart contracts”.
A smart contract – is concluded between two or more persons interested in the transaction and automatically records the performance of all contract items. Contrary to the erroneous view, a smart contract is not only ERC tokens.
The concept of tokens is a small part of the overall functionality and capabilities provided by smart contracts. More details can be found in our previous article on how to create an ERC20 token on Ethereum.
The smart contract is online and essentially represents the program code written in the blockchain.
Suppose you are engaged in the production of food. You need raw materials for production. You conclude a “smart contract” with the supplier of raw materials and proceed to fulfill the contract items. The supplier, in turn, will be sure that he will receive payment for the work done.
Each action when fulfilling the terms of the contract leads to a new action.
1) You specify in detail the conditions with the supplier, conclude a smart contract in the blockchain, and automatically reserve funds for payment. The raw material supplier is confident that you have enough money to pay.
2) The supplier collects your order. All the information on the raw materials presented in the contract must be genuine. This is one of the conditions. “Smart contract” independently checks all provided information for authenticity and in case of non-compliance the contract will be terminated.
3) The supplier sends you your order. All step-by-step execution of the contract items is automatically entered in the registry in the blockchain, and you in turn can track the stage at which the contract is being executed.
4) After the goods of the proper quality come to you, you confirm the transaction and pay for the order to the supplier. In the event that any of the terms of the contract were violated or you received raw materials of inadequate quality, the transaction will be terminated and the money will not be sent. You return the goods to the supplier, and all the information on the smart contract is recorded in the system of the blockchain and stored there for good.
This was just one example of a “smart contract”.
You can ask “And what’s wrong with that? So it was always.” This is true, but using a smart contract and blockchain technology, the entire process becomes automated.
Excludes a huge number of various documents, bureaucratic processes, and payment for the performance of the contract goes straight to the performer, bypassing banks and delays in transactions in them. Blockchain registers all stages of the contract, and you in turn control the process.
Deception is excluded. If you are a recipient, you pay for the service only if all conditions are fulfilled. If you are a supplier, before you get started, you will be able to make sure that the funds for doing your work are already reserved.
In the relationship between the supplier and the buyer, intermediaries disappear, which also need to be paid.
If you take as an example a larger contract involving a large number of participants, a smart contract allows you to fully control the movement of money.
Without fulfilling the terms of the contract, one or another participant in the business process will not receive money. And surely nothing will get the one who decided to enrich himself in a fraudulent way.
Cryptocurrency and bitcoin scripts are already partially secured from this, and can be used to instantly launch your blockchain business.
It is also worth noting that it is impossible to harm the information prescribed in the blockchain. It is impossible not to change it nor delete it.
Even if someone harms your database or the computers of all participants in the business process, millions of computers involved in the blockchain will restore lost information.
Integration of the blockchain into your business
As a result, many well-known companies of the world are fighting for specialists who are versed in the blockchain. The technology of perpetual storage of information and optimization of business processes offers us an impressive opportunity.
If you decided to integrate a blockchain into your business, you will need to answer a few questions to begin with:
1) What business processes require the transfer to the blockchain?
2) Do I understand the essence of technology well?
3) What benefits will the blockchain bring to my business?
Blockchain is true. One single, true, for everyone. Applying it in business, we will get rid of the risk of information loss. Applying it in politics, we will get rid of corruption. Applying it in medicine, we will get rid of negligence.
Blockchain is the philosophy of storing the information of the future.
Is blockchain business?
Blockchain business should not be perceived as something extra-terrestrial, or repulsive. In fact, creating a blockchain business is as easy as any other online business. Well, maybe only faster.