I will start with an example in this blog. To understand the importance of blockchain for business, one has to understand the evolution of internet and software of the past decade that has made an online transaction of money convenient. It has also paved the way for convenient online purchases and trade securities. But the transfer of financial assets comprises of its movement through archaic circuits of correspondent houses, central depositories and clearing houses. The transactions are slow, insecure and expensive as well. At this point, the blockchain comes into being. It restructures the entire circuit of the transaction and introduces new digital interactions.
Delving deep into the understanding, what is blockchain?
The blockchain is often popularly called as the underlying technology behind Bitcoin. It makes use of the peer-to-peer channels of the computer for the validation of any transaction. It is a data structure that creates and shares the ledger details of transactions amidst a closed network of computers. Blockchain allows the users for making and verifying the deals immediately without the intervention of the central authority.
The technology represents a fundamental transformationin the way a data is shared in a transparent or open method. Blockchain provides an appeal to all the parties that the data that is sent and received between them cannot be tampered with; yes; it is indeed error-free. It has the ability to prevent data leaks and also ensure proper transfer of any crucial data.
Blockchain prevents tampering of the data. It enhances both security and also transparency of the data. Now, when massive amounts of data are being processed, blockchain ensures greater governance and security.
Some figures for you to understand the impact of blockchain technology
- The blockchain technology holds the potential for reducing the cost of infrastructure by 30% (Source)
- The reported potential annual savings for banks that use the blockchain technology is supposed to be $8 to $12 billion (Source)
- The average investment amount spent in the blockchain project of 2017 is $1 million (Source)
- By 2024, the amount of global blockchain market is expected to be worth of $20 billion (Source)
- 69% of banks are now experimenting with blockchain technology (Source)
- Blockchain-managed assets have reached the impressive total of USD 1.6 billion worldwide (Source)
- It saw a growth of 1,600% growth between 2013 and 2016 (Source)
- more than USD 1.4 billion in venture capital has flowed into startups in the blockchain sector between the 2013 & 2016 (Source)
Blockchain and big data: When the two powerful giants meet
When the data is managed poorly, it gives birth to many crucial problems. For example, the healthcare sector, if the patient data is handled inaccurately, it can even lead to the loss of life. Or in the banking sector, the data stolen can result in a massive theft of the assets. Actually, in the vent when a data breach takes place, the customers and the clients both go through unwanted & unpleasant experiences. It is needless to say that the business indeed stands on the edge of losing the trust of the customers and clients and also facing the financial repercussions. Here, comes the implementation of a big data platform, based on Hadoop. The big data systems help the companies to gain access to powerfully channelized computing abilities and to store their data in scalable data pools.
Blockchain and Hadoop together represent a single security layer ensuring that the data is encrypted in the way that only the authorized personnel can read it. And as mentioned earlier, the data cannot be manipulated. So, even when a problem occurs, an instant red flag gets raised. And also if the data is breached somehow, it cannot be used.
Benefits of blockchain for business: Transparency for everyone
The technology of blockchain may involve complex algorithms for its implementations, but at the higher-level, this concept is straightforward. In case you are working with bank transactions, the data that you store is kept in a distributed & decentralized manner. With blockchain, the mutation or fidgeting with any data is prevented. The blockchain is based on the idea of ‘single source of truth.’ The transactional data processed through blockchain can provide valid evidence for showing any kind of potential irregularity. Businesses, in this way, can combat the occurring of financial fraud like revenue overstatement. This transparency hits a profound impact on the bottom line of the business.
The implementation of blockchain increases the quality of data that empower many of the predictive models, which have a direct impact on the business. The compromised data leads to unexpected and unpleasant results. It is this blockchain that protects the business from detecting a corrupt and compromised data. For the sake of transparency, accuracy and safety, the business must consider implementing big data.
Benefits of blockchain for business: A technology that enhances the business speed
Blockchain technology’s real potential is seen in its power to sweep over the inefficiencies of the data processing. Businesses across the world are talking about using it for specified areas of robobanking, P2P insurance, P2P funding, and P2P lending, without the intervention of any broker. The popular financial institutions are hoping to generate handsome savings by elimination the auditors, middlemen and clearing institutes.
Smart Contract, an excellent fruit for business
One of the essential features of the blockchain engineering with other processing systems is its ability for including and implementing the smart contracts. These smart contracts comprise of data and self-executing code, & also information that lies with the structure. There are many promising business models for smart contracts, like:
- Independent P2P execution, without a central clearing house
- Implementing smart contract between two or more parties with automatic payment processes, without any escrow amount
- Storage of trade information and transaction accounting for a simplified account auditing
- Notarization of documents by embedding information of the documents in public blockchain
- Usage dependent licensing for entertainment sectors and also for leasing and renting vehicles
- Implementing touchable or cognitive value creation chains within the industry 4.0 and IoT with complete transparency of decentralized ledger
It is important to mention that a large chunk of the features is still to be tested.
Blockchain business opportunities by specified sectors of business
1. Blockchain business opportunities in digital marketing
- A brand will be able to target the consumers better by the removal of any middleman in the digital advertising. Although, it may not end the influence of Google or Facebook. Blockchain will strengthen the bond between consumers and the brands, directly.
- How do blockchain startups make money? Through decentralization. Numerous marketing and advertising startups in blockchain are popping up frequently. Blockchain aims to tokenize the user behavior by offering some sort of credit system in between the consumers and the advertisers by banishing the positions of middlemen.
- There will be a growth in the fraud verification industry. Since advertising online is an incredibly complicated procedure, blockchain will aid it by making the structure transparent. Inevitably, there will be a rise in the fraud verification companies that aim at stopping the bots and fraudsters extracting ad money from brands. Block chain will enable the users to verify where, how and who runs the ad.
- Content delivery and reporting will also transform. The content producers can control how the digital assets are delivered and then ensure it is accurately tracked.
- The transparency in advertisement grows. Since marketers publish their case studies for more branding reach, Blockchain will provide the sheath of transparency to their claims that will increase trust opening more alley of (logical) negotiation.
- Influencers are going to get shorter in number, but, better in quality. The influencer marketing campaign will change dramatically. With the blockchain technology, marketers will be able to recognize whether the followers are real people or automated bots.
2. Impact of blockchain technology in the Financial sector
- Thanks to the P2P lending companies, you do not have to go to the bank to get loans. The blockchain is likely to provide the budding P2P lending industry an incredible boost.
- The global financial institutions have joined the hands together in the fintech startup R3 for promoting collaboration inside the sector revolving around the issues of the blockchain. They aim at developing standards for the technology-based solutions. The banks are hoping to achieve faster and more effective executions of the interbank trades at a lower cost. Why? Because the central account body is expected to be superfluous.
3. Blockchain in the healthcare industry
- Blockchain will provide longitudinal records of the patients. These include compiling the episodes, lab results, treatments and diseases registries. The technology will undoubtedly assist providers in coming up with better ways of delivering care.
- Blockchain will eliminate the occurrences of duplication and mismatch of records. The entire data set will be hashed to the ledger. So, when the user seeks an address, there can be multiple keys and addresses but all connected to the single patient.
- The medical and health expense claims can be verified automatically upon the network agreement. Since, there won’t be any central authority, frauds and errors would take place less.
- The blockchain is based on inseparability. It can be used by the sophisticated use of the APIs make the expand unified healthcare inseparability and data storage a reliable process. When shared with the authorized providers in a standardized and secured way, it would decrease the cost burden connected with data reconciliation.
4. The effect of blockchain in the bookkeeping industry 4.0
- All transactions of the economy today are registered inside the proprietary ledgers of the market participants, individually. The fully potent blockchain takes control when the accounting stretches its internal ecosystem.
- IBM right now is hoping to automate all their processes of the value chain with the cognitive IoT systems. They hope that the procedure will connect to their AI Watson and fetch them optimized value chain benefits.
To wrap up
The scope of blockchain is limitless. The applications are practical as well and only through imagination and effort, this technology can help the businesses make it big, especially for the leaders who can make strategic moves to earn a profit, riding on it. Blockchain may not break the traditional business model, but it can give it a fresh new alley of growth to every venture for enhancing their economic structure.