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How Blockchain Will Increase Corporate Profits
The excitement associated with Bitcoin and cryptocurrencies makes it difficult to understand what blockchain technology and advanced technologies of distributed registries are. Until such an understanding comes, the business will not be able to receive potential profit from their use. But this situation will not last long.
Blockchain is a sophisticated algorithm designed for cryptocurrencies. It manages a distributed data structure that is responsible for the movement of electronic money. Thus, it seems to replace the administrative role of a central bank or state support.
Blockchain allows you to store and distribute virtual altcoins. They do not need to be transported or stored somewhere, but they are sold, their volume grows, and they function thanks to the blockchain that underlies the system.
If you imagine a registry that is being updated in real-time and then scale this picture several billion times, you will get some illustration of how the blockchain works.
Why is blockchain development good for companies working with corporate clients?
Companies working with corporate clients can use this technology as a virtual bank: through it, you can send and receive money and perform other operations. This differs from traditional online banking, where the business is subject to regulation, monitoring, and you have to comply with the operating mode and several other restrictions.
Here are some of the reasons why blockchain development is suitable for companies working with corporate clients.
Efficient supply chain
The blockchain is open to all network members. An IBM report said the technology "can improve the efficiency of the supply chain, improve interaction in processes with a large number of participants, and optimise decision-making processes in unusual situations and disputes." It does not replace conventional software for supply chains, but it involves new realities like expanding flows of data from the Internet of things.
Optimisation of sales processes
"The sales process in the corporate sector is based on relationships and responsibility," said Jeremy Epstein, blockchain marketing expert and CEO of Blockchain Never Stop Marketing, a consulting company. The interaction in the b2b sale process takes longer than in retail sales. "Trust is essential to the success of corporate sales, and blockchain is a way to speed up building reliable relationships at a lower cost," he continues.
According to Epstein, only 50% of companies check the creditworthiness of customers or require secure forms of payment or both. 81.5% of companies report using credit management policies to reduce trade risks.
Simplicity and speed
Forbes IT expert and columnist Joe McKendrick notes that
"the competitive advantage of the blockchain is that it eliminates intermediaries from the transaction and allows more autonomous types of contracts."
By simplifying and accelerating financial transactions, the blockchain replaces existing processing in banks and credit card systems. This reduces the costs of suppliers and customers in the corporate sector.
Outside of fin-tech
According to Derek Handova, the author of B2B Business Network
"outside the fin-tech applications, the influence of the blockchain is not yet felt."
However, two years ago, he predicted the imminent emergence of enterprise applications. Handova suggested that blockchain could be useful in real estate transactions, managing user identification, recording data in healthcare, and much more. You can hire blockchain developers by meeting with blockchain development companies.
Safety and security
- Evening Standart editor Phoebe Luckhurst insists: "The future is with the blockchain." However, she admits that the blockchain is as good as its code, and the system can be cracked in certain ways.
- Goldman Sachs calls blockchain "a faster and more secure way to verify key information and establish trust."
- Professor Kevin Werbach of the Wharton Business School describes the blockchain as a "new architecture of trust" - a system in which you do not deal with an intermediary, whether it be a person, institution or authority.
Companies need to cut costs that the blockchain promises them.
- It can occur due to the acceleration of transactions because, with the help of technology, the client's money immediately comes to the seller.
- Acceleration extends to the entire supply chain and contributes to customer satisfaction.
- Blockchain facilitates distribution and logistics, and it also improves work efficiency.
- By allowing you to get rid of the costs associated with servicing bank cards and other services for business, blockchain reduces overhead costs, and this affects the cost of maintenance.
Blockchain is a speed sensor
This technology can be confusing for many. Most people never heard of it until Bitcoin got everyone's attention. The virtual monetary system and cryptocurrencies have a long way to go to become generally accepted, but everything is changing rapidly. A closer look at blockchain and the technology of distributed ledgers show that they made a severe impression on large banks, those who work with big data, social networks, managers of power plants and leaders of electronic commerce. IBM already uses blockchain in advertising cloud services for business.
The next generation of sellers and customers will know both these tools and this language well. Everything that does not work on the blockchain will seem archaic, risky and unreasonably expensive to them. In reality, most people will not know that the services work on the blockchain, but transactions without intermediaries will become as familiar as Wi-Fi, fast Internet, and smartphones.
Cryptocurrency platforms lure people. However, in addition to complicated code, they have no product. Conversely, a credit card provides the illusion that money is at hand. Thanks to some government regulation, we almost understand the explanation of how credit cards work. People adapted to them psychologically.
Similarly, business owners are accustomed to established procedures and IFRS or GAAP reporting. Implementing significant changes in register maintenance will take time and, although they will immediately benefit e-commerce, this implementation will require a revolution in Internet marketing and sales.
It can be expected that over time, the blockchain will provide even greater security, more practical applications and more suitable products for customers. When customers decide that products based on this technology are cost-effective and easy to use, the market will follow customers.
How long the transition will take is not yet clear, but the movement is gaining momentum. Growing trust, security and efficiency always helps companies compete. Blockchain can help with this.
About the author
Elena Randall is a Content Creator who works for Top Software Companies, provides a top 10 list of top software development companies within the world. She is passionate about reading and writing.
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If you enjoyed this post and have a little extra time to dive deeper down the rabbit hole, why not check out the following posts on blockchain and cryptocurrency.
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- How Blockchain Can Improve The Transportation Industry