In a world where trust can make or break companies, the Blockchain can help ensure safe and secure business relationships and transactions.
In today’s fast-paced and highly competitive business environment, close relationships with customers, suppliers and partners are critical. This is particularly true for small and medium sized companies who often rely heavily on these relationships. But, loyalty and trust are becoming increasingly difficult to maintain in a world driven by technology.
New security threats are being discovered daily, the confidentiality of your data is only as good as your Wi-Fi password, and the business of hacking is booming. it sometimes seems like the next big data breach is just around the corner.
Enter Blockchain technology
Blockchain might hold the key to lightning fast, completely secure transactions, un-hackable data storage and no middlemen.
Related: How Blockchain technology will disrupt the commercial real estate industry
Why is it a breakthrough innovation?
While much attention has been placed on cryptocurrencies like Bitcoin, it is the underlying Blockchain ‘infrastructure’ that is potentially one of the most significant technological innovations in recent years. Debates around the merits of cryptocurrency as a vehicle for investment aside, the Blockchain can reignite the ‘trust connection’ between a business and its customers, partners and suppliers.
Wikipedia defines the Blockchain as ‘an open, distributed ledger that can record transactions between two parties efficiently and in a verifiable and permanent way’.
Essentially, there are hundreds or even thousands of machines that are able to determine and record that a transaction has occurred – and that a digital asset has moved from A to B. Currently, these transactions are mostly limited to cryptocurrencies such as Bitcoin and Ethereum. However, in theory, Blockchain could be used to encrypt and recordanytype of digital transaction. This could range from a publisher selling a digital book to a parastatal awarding a tender.
Straight to the source
In practical terms, Blockchain means that users can transact directly with one another - effectively cutting out the middleman in the value chain.
Take the creative industry, for example. Even though the Internet has made it easy for local musicians and authors to distribute their music and books without going the traditional music label or publishing house route, piracy has made it all but impossible to generate any significant profit.
Music streaming services are also often criticised for the tiny amount of profit they generate for artists. Using the Blockchain, each audio file or ebook can have royalty and licensing rights built-in – facilitating micro transactions whereby the artist or author gets paid directly.
Within healthcare, the Blockchain can be used to link the complex ecosystem consisting of finance, payment, medicine, and care-giving. This, for example, makes it easy to track medication as it moves from manufacturer to patient and helps combat counterfeiting, fraudulent claims, and so on.
On the education side, the Blockchain can securely and permanently store all records. Did you lose your degree or certificate? Or perhaps someone needs to confirm the validity of a doctorate for a senior appointment. All of this can easily be verified and made available using the Blockchain.
Related: Standard Bank furthers its exploration in blockchain across Africa
Blockchain is a ‘smart’ system
Deloitte believes that one of the most promising applications of the Blockchain is the emergence of smart contracts (computer programmes that facilitate, verify, or enforce the negotiation or execution of an agreement).
These are secure and can reduce the transaction costs often associated with contracting. But the consultancy cautions that the rules of the smart contract are recorded in computer code and cannot be freely interpreted according to the intent of the contract, only according to the literal meaning. So, if the contract is badly worded, it dramatically impacts its enforcement.
Of course, all the benefits of the Blockchain, like the Cloud, are moot if your business does not have reliable internet access. In the digital world, having a robust connection to digital solutions must be a given. Looking ahead, SMEs need to embrace this connected, Blockchain-friendly environment – the right solution will undoubtedly enable them to nurture strong, long lasting and transparent customer relationships.