Blockchain is taking technology to the next level by strengthening data security and interoperability. It is now considered a better version of cloud storage since it’s more affordable, safe and reliable due to decentralization. This structure allows every network member to own a copy of the data provided by the ecosystem, which also ensures similar decision-making powers. Blockchain is maintained and controlled by all the nodes responsible for verifying transactions, ensuring a fair and balanced structure that’s censorship-resistant.
Although blockchain was initially created for backing up cryptocurrency, such as Bitcoin and Ethereum, it expanded to other sectors. Since the BTC price stabilized, networks have become more critical than ever, connecting users and companies in a better ecosystem.
That’s why blockchain is the perfect tool for startups and small businesses because it offers so much at a low cost. Here’s why more companies should approach blockchain technology.
Advantages of leveraging blockchain as a startup
Choosing to work with blockchain implies a lot of responsibility due to a decentralized system where there’s no central point of power. At the same time, maintaining such an extensive database requires the employment of professional developers, which can be scarce at the moment since the industry is yet to be developed.
However, adopting blockchain as a startup brings several benefits, such as the following:
- It makes you an early adopter, which boosts the brand. For now, the blockchain sector is still unapproached, so those who dare to work with this technology are few. This element single-handedly brings them more media coverage and collaboration opportunities;
- It efficiently digitalizes the company’s processes. Many businesses are inefficient due to a lack of improvement in their software programs, which could be easily solved by integrating blockchain technology;
- It secures data properly, protecting massive sets from cybersecurity threats. Organizations are frequently surprised by such an attack despite their low investment in cybersecurity. But with cryptographic-backed systems, this worry can disappear;
But this is not even the start of what blockchain can do for your business. You can use it as a tool for many sectors of the company’s system.
Here’s what blockchain can do for you
Besides being an underlying ecosystem for cryptocurrency, blockchain has several use cases for any startup. For instance, it can be leveraged as a payment domain for worldwide transfers that makes cross-border transactions easy and cost-effective. With blockchain, startups can efficiently start a crowdfunding event or reach angel investors who are interested in their projects.
But for transactions to be complete, a startup must create, share and finalize contracts, which is a usual tedious process. However, blockchains support the development of smart contracts that are impossible to break or corrupt. That’s because the parties involved in the agreement must each accomplish each other’s requests in order for the contract to become liable, which happens automatically when all terms are reached. Hence, startups will get over the lost time in calling for the other party to accept their agreements and can simply send their contracts and see whoever is really committed to the project’s goals.
After completing all the contracts, startups will store all the data on the blockchain, where they’ll be able to protect the parties’ digital identity and their information with no effort. Decentralized networks replace traditional safety measures with advanced elements based on cryptography.
Blockchain improves supply chain management
Dealing with supply chain management as a startup can be challenging, mainly due to unexpected delays, unstable freight prices and forecasting issues. Even tracking products proved to be a problem for more prominent companies since current devices are not reliable in the long term.
Luckily, using blockchain to improve supply management is successful. Tracking is more accurate than even through RFID tags and sensors that allow all the information about the item, such as origin to current status, to be verified and assessed immediately. Blockchain is a valuable tool in fraud detection, one of the most significant problems in the industry.
Blockchain technology can also help reduce costs in the supply chain process, mostly because it eliminates all intermediaries that might lead to fraud, therefore minimizing costs for fixing issues. But what’s impressive about the use of blockchain in the supply chain is that it lowers the chances for miscommunication and human errors, included within the EDI (electronic data interchange) segment. Since supplier transactions are not standardized anymore, startups can impose cryptocurrency payments, which don’t require the same bureaucracy fuss, making everything simple and fast.
However, introducing blockchain comes with a series of challenges
Like any other revolutionary and new thing on the market, blockchain technology is yet to be promoted as safe and used by all industries, and that happens due to many factors. First, the lack of proper regulation around blockchain and cryptocurrency hinders companies from using it freely without safety coverings. Therefore, if something goes wrong, startups will most likely face the consequences of an incomplete system.
Although new regulations are on the way for various digital assets, such as ETFs, blockchains, and similar networks, they receive less attention. However, governments are more eager to leverage their features. This contributes to another challenge, including the need for complex infrastructures that require maintenance by professional developers. The technical know-how is considerably vast, so there are few chances you’ll find the perfect candidate easily.
At the same time, the developers employed to maintain the blockchain must also have extensive knowledge about blockchain safety because, despite its hi-tech safety features, hacks happen, especially on open and permissionless blockchains. That’s why private and permissioned networks work better, but they require extensive data and work to add another layer of security.
Introducing blockchain applications for startups is a big step ahead for all industries because the involvement of this new technology ensures increased data safety and improved efficiency in all departments and also offers reliable cloud solutions that cannot be hacked so easily. There are numerous benefits to having a blockchain backing up your startup, but challenges are multiple, from the lack of regulation to the vast know-how requirement.