Blockchain technology acts as the transformative force to drive digital transformation. Often, people used to confuse Blockchain with Bitcoin. Although people often use terms like Blockchain and bitcoin interchangeably, it is important to note that they are entirely different.
Blockchain is a distributed ledger, while cryptocurrency is one of the applications of Blockchain. So, in this article, we will dive deep into the top 10 benefits of blockchain technology that your business should harness.
Table of Contents
What Is Blockchain?
Blockchain technology is a distributed ledger or database capable of recording information in such a way that makes it impossible for anyone to hack or change the system. It is a distributed database that comprises ordered records known as blocks.
When we search on Google, the Google server retrieves the data, resulting in data centralization. However, in the case of Blockchain, data is not centralized; instead, it is distributed among multiple computers. The data in Blockchain is decentralized, and if you join the network, you will have a copy of that data as well.
If you store your data in databases or prefer to do cloud storage, your data can be hacked. The prime motive for introducing Blockchain is to record the data, but no one can edit or delete it.
In a nutshell, Blockchain represents a collection of interconnected records that strongly resist alteration, and it utilizes cryptography to protect the data.
Consider Google Docs as a distributed network where users can create and share documents, allowing real-time collaboration and recording of changes.
However, in the case of Blockchain, an additional layer of security is introduced. Unlike Google Docs, the original content cannot be modified.
Remember! Blockchain is more complex than a simple Google doc.
Blockchain Advantages Per Vertical
The following are the advantages of Blockchain for different verticals:
1. Blockchain In Human Resource
Blockchain offers various advantages to HR Department-
As the HR department handles the financial transactions of an organization, such as managing sensitive employee and company data, HR department data can be exploited.
Here, blockchain technology acts as the lifesaver option as it is a decentralized ledger meaning all the data is secured and encrypted. In addition, blockchain technology is immutable as data, once written, cannot be changed.
Smoothens The Recruitment Process
Blockchain streamlines the recruitment processes as every bit-sized information is available on Blockchain.
So, the HR department need not worry about performing background checks and bear unnecessary expenses to outside vendors as everything can be verified using blockchain technology.
2. Blockchain In Trade Finance
Blockchain offers various benefits in the domain of trade finance-
It enhances efficiency as the transactions are conducted between parties, and no intermediary is involved. The usage of smart contracts automates business transactions which in turn smoothens the trade finance processes.
There are times when the transportation of goods takes more time than is expected. In such a case, Blockchain offers a great advantage to importers and exporters to track the status of goods.
3. Blockchain In The Energy Sector
It becomes imperative for the government to ensure proper energy management to provide valuable economic growth.
A Fortune Business Insights report suggests that Blockchain will bring new solutions to the energy sector. The global Blockchain in the energy sector will reach USD 1564 million by 2026.
The energy sector involves various supply chains with numerous members at every stage.
For Instance – Oil production and distribution involves multiple stages such as exploration, extraction, refining, transportation, etc.
Blockchain ensures frictionless communication by organizing different parties involved in tasks and speeding up processes across the supply chain.
Blockchain improves transparency across networks of multiple parties, as every member has a copy of the blockchain ledger. Thus, The information stored on the ledger can be easily verifiable, and it’s almost impossible for anyone to manipulate transactions.
4. Blockchain In Real Estate
Blockchain brought a new revolution in the real estate industry by offering various benefits-
Reduces Risks And Costs
This technology reduces risks and costs by doing asset tokenization. Tokenization refers to the number of shares that can be bought, sold, or transferred using a blockchain platform.
With tokenization, ownership rights are duly converted into digital tokens. As the property is now liquidated, there are fewer fraud risks, and investors can buy and sell tokens in real time.
Cut Out The Middlemen
There are no more intermediaries such as brokers, banks, or lawyers to become a part of the real estate ecosystem.
Blockchain stores all the property-related documentation which can’t be accessed publicly. Moreover, blockchain platforms connect buyers and sellers directly without requiring intermediaries.
Thus, the process becomes much easier as there is no intervention of intermediaries, and buyers and sellers need not have to pay hefty commissions to the agents.
5. Blockchain In Healthcare
Secures Patient Data
Patient data breaches have become a major concern nowadays, with research studies indicating numerous instances of breached patient records from 2009 to 2017.
Moreover, hackers steal patients’ confidential information such as credit card details, bank information, and other details.
With Blockchain, tracking every drug to its root cause is possible. Each block in the Blockchain links to another block through a hash value.
Healthcare professionals can make use of blockchain technology to know everything about the drug at every stage of the lifecycle.
Only authorized parties can see the transactions in Blockchain.
6. Blockchain In Government
The government gets various benefits from blockchain technology-
The government uses data composition, including tax information, voting records, property details, etc. Meanwhile, Storing such data in a decentralized ledger known as Blockchain protects it against cyber-attacks. With the help of blockchain technology, the government creates irrefutable logs.
Ensures Proper Identity Management
As you know, cybercrimes and data breaches are increasing in every industry, so the government is experiencing serious challenges in protecting citizens’ sensitive data. To combat such issues, Blockchain proves to be a lucrative way to identify identity management issues.
Here are the top 10 benefits of Blockchain Technology-
1. Increases Trust And Security
As security has become a major concern for businesses, Blockchain guarantees that your transactions are end-to-end encrypted, and hackers won’t be able to hack your data.
Meanwhile, hackers are not able to access sensitive information and do data breaches as modification or alteration of content in Blockchain is not possible.
Blockchain, a distributed ledger technology, ensures robust security to businesses by making transactions recorded in the decentralized ledger immutable instantly.
The conventional system stores data in a single computer system, making it less secure compared to Blockchain, where data is stored.
2. Increases Efficiency And Speed
Earlier, traditional paper-based processes were time-consuming and subject to human errors. Blockchain enables quick processing of transactions, eliminating human-made errors since there are no intermediaries involved.
Blockchain processes transactions within a matter of seconds or even minutes. There is no fixed rule regarding how quickly a blockchain can process transactions as it depends on various factors such as network traffic and how long each block data is.
For Instance – Walmart uses a food and traceability system to keep track of the origin of mangoes in a few seconds. On the contrary, the conventional process takes around 7 days to do so.
3. Facilitates Automation
With the help of smart contracts, Blockchain can automate transactions. Smart contracts are digital and automated contracts that are stored in a distributed ledger (Blockchain). These contracts work by following if/then statements.
No human intervention is necessary. When the conditions are met, the contract progresses to the next transaction phase.
Thus, it increases the speed and efficiency of the blockchain process as you no longer need to rely on third parties to verify that the contract terms have been met.
4. Decentralized Platform
There is no central authority regulating and monitoring your activities in Blockchain transactions because they are decentralized. In the case of Blockchain, verification of transactions takes place by a network of nodes rather than a centralized authority.
A perfect example occurs when information and data need to be exchanged freely among suppliers, transportation providers, retailers, and distributors in a supply chain… No one facilitates information sharing.
Then, Blockchain is the only solution to deal with such an issue.
5. Brings Innovation
Several executives from a wide array of industries are trying to adopt a blockchain system to streamline their business processes. Blockchain is bringing innovation in the recruitment domain as HR managers can verify information of job applicants.
Blockchain technology prevents candidates from using Photoshop to develop fake and impressive documents.
Several research studies indicate that most candidates try to create fake resumes, which often increases the time for hiring managers.
In the coming years, pilot programs will enable universities to store the data about their graduates and degrees on Blockchain, which hiring managers can verify.
6. Builds Trust
Another major benefit of Blockchain is that it builds trust between 2 entities. Trust plays a significant role in ensuring the successful completion of a deal. When 2 businesses deal with each other, an intervention of a third party is required to regulate and validate transactions.
With Blockchain, you need not worry about building a formal business relationship as it facilitates faster processing of transactions.
7. Reduces Cost
Blockchain transactions help organizations reduce manual processing tasks such as data collection, editing, reporting, and auditing.
Research studies suggest that financial institutions using blockchain technology can perform conventional tasks much faster and cheaper.
In addition, businesses found that blockchain technology is helping them to cut down their costs by eliminating middlemen (vendors and third-party providers).
Blockchain is immutable, meaning no one can erase or edit the data. While the traditional CRUD model (create, replace, update, delete) does not support immutability, it is easy for anyone to erase or replace data.
Blockchain is particularly helpful in the case of legal issues because it’s easy to figure out what happened.
All transactions on the Blockchain create a permanent record as they are timestamped and date stamped. Not only that, but it also helps you keep track of participants involved in the transaction process and identify the flaws that occur in the transaction.
9. Streamlines Supply Chain Management
Businesses wish to rely on blockchain technology to strengthen their supply chain as it allows companies to track their products/services ranging from manufacturing and delivery.
Here, Blockchain provides transparency and security, providing greater visibility into supply chain participants. Thus, participants can identify areas for improvement in the supply chain.
For example – IBM food trust is a food supply chain management allowing producers, distributors, and retailers to keep track of the movement of products in the supply chain.
10. Brings Customer Engagement
Blockchain improves customer engagement by bringing trust, transparency and simplifying business processes.
Integrating Blockchain and customer engagement brings various opportunities, such as allowing users to control personal information, do faster transactions, and identify loyal customers.
Blockchain is revolutionizing the world, which brings greater transparency and traceability by helping businesses in various domains such as healthcare, real estate, human resources, and supply chain.
By reading this blog, I’m sure you understand the top 10 benefits of blockchain technology.
So, If you want to leverage this technology to win the heart of future customers, smoothen your business processes, and facilitate decentralization. In that case, our blockchain app development experts are here to help you.
We offer various blockchain app development services ranging from blockchain app ideation and consulting, custom blockchain app development, crypto exchange development to crypto wallet development, etc.
So, if your goal is to secure your business, head over to the contact us section now.