Business news these days is filled with stories of companies offering blockchain-related products and services. While these include companies directly linked to cryptocurrencies and decentralized finance, many more businesses and organizations are integrating blockchain technology in a number of interesting ways.
Several projections point to the increased use of blockchains and blockchain-powered tools. For example, a report by MARKETSANDMARKETS speaks of the emergence of a blockchain-based Internet of Things (IoT) that it calls the “Blockchain of Things.” The industry is expected to generate a market of $2.4 million by 2026. Further, Statistica estimates that blockchain technology revenues will surpass $39 billion by 2025, while Gartner places the annual business value of the technology at about $3.1 trillion by 2030.
With such projections, it is little wonder that companies in all sorts of industries, from finance to manufacturing and logistics, are integrating the technology into their operations. Here, we outline some benefits of blockchain technology for businesses.
Reduced Costs
Blockchain’s ability to streamline processes and root out redundancies presents businesses with an opportunity to save money. This is done by cutting down or completely eliminating manual tasks like data collection, editing, reporting, and auditing. Blockchain enhances the efficiency of transaction processing, reducing overall operational costs.
In addition, blockchain’s ability to automate processes eliminates the need for intermediaries such as vendors and third-party providers. This directly translates into reduced operational costs as the business no longer pays the fees associated with their services.
Enhanced Customer Engagement
Blockchain has the potential to enhance customer engagement for businesses. It brings increased access, transparency, simplicity, and trust to business processes – benefits not only for the business but for customers as well.
The technology gives customers greater control over their personal information, giving them a sense of empowerment. The transparency and efficiency it brings to financial transactions also have the potential to foster trust and confidence, leading to increased customer satisfaction and engagement.
Transparent Financial Processes and Payments
The tamper-proof and decentralized nature of blockchain technology allows for transactions to be securely recorded. For businesses, this brings higher levels of security, transparency and traceability to financial processes and transactions. This results in increased user confidence.
Increased Speed and Efficiency
Taking intermediaries out and digitizing manual processes allows blockchain to handle processes and transactions faster. Along with a reduction in human error, this makes for an increase in efficiency.
While it can be argued that blockchain is slower and has the potential to slow down processes that are already mostly or fully digitized for a lot of business operations, especially those that contain manual steps, it has been observed to speed up the process. For example, using a blockchain-powered food traceability system, Walmart was able to reduce the amount of time it took to trace the origin of mangos sold in the United States from 7 days to 2.2 seconds.
Streamlined Supply Chain Management and Traceability
Companies around the world have been using blockchain to track their product and services. The transparent and immutable nature of blockchain technology has allowed businesses to track everything from manufacturing and transportation to delivery – enabling them to combat counterfeiting, delivery delays, and other supply chain issues.
Owing to the visibility and traceability of the technology, retailers and wholesalers can also use blockchain to manage inventory, respond to problems or queries from customers, and investigate faulty or contaminated products.
As the technology continues to develop and businesses begin to understand it better, the possibilities and uses will only increase. Alongside other technologies such as artificial intelligence, big data, and cloud computing have the potential to revolutionize operations and foster innovation for many industries worldwide. Businesses that strategically incorporate it into their operations are likely to gain an advantage over their counterparts over the years to come.
