Blockchain is mostly associated with Bitcoin as this was the first cryptocurrency that has ever been created and conquered the minds of many investors and businesses all around the world. Apart from the possibility to hitch a jackpot on something that is so volatile, Bitcoin offers some unarguable benefits to those who simply want to transfer value. With the blockchain technology, transactions occur instantly and the costs for mediators are significantly diminished.
Since the new technology started to take over the minds of IT startups, many new projects and many new blockchains with enhanced feature sets have been created. Some experts believe that blockchain is going to literally revolutionize some industries, and not without a reason. Here are the top 5 benefits that blockchain offers to B2B users.
Simplify the fundraising process
Previously, the companies that needed capital for growing their businesses utilized the IPO (Initial Public Offering) model on the stock market which required much more time, money and efforts to organize. With the new ICO model, the process of fundraising gets much simpler both for startups and for investors, and there’s no wonder that this new method gained so much popularity in 2017. According to CoinSchedule, more than 6.5 billions USD have been raised over this period.
However, most of those small startups proved to be untrustworthy as practically none of them fulfilled their promises. This led to investors’ disappointment and severe restrictions from regulators. Eventually, such projects have lost the trust of the mass audience and the public token sales which were so popular in 2017 most likely will go down in history.
But the new technologies have not been left unnoticed. Huge players have recognized the new way of raising funds, appreciated the benefits it gives and now start to utilize it with respect to institutional investors.
Verify the supply chain
The problem of counterfeit is acute in many regions of the world. Such industries as the medicine market, clothing, software and many more are literally flooded with fake goods.
Blockchain technologies can help to reduce the amount of counterfeit since they give a way to track the source and the whole supply chain of a given product. Every participant of the supply chain can add the information relevant to the product, and since the data on the blockchain is immutable, every following link of the chain can track the origins of the product back to its initial producer.
VeChain is a good example of a project that aims to overcome counterfeit issues. This is a Singapore-based company that develops a platform for tracking the source of different items with the help of the ‘proof-of-authority’ technology. The project founders have first presented the idea in 2015 and conducted the ICO in 2018. Now the platform already has some real business use cases in such areas as luxury items, cars, agricultural products and audit.
Increase transparency and traceability
We won’t consider such untraceable coins as Monero and Zcash that were designed to make transactions totally invisible to the third parties, such as state-backed institutions. Putting these tools apart, most of the other cryptocurrencies provide full transparency not only to the participants of a given deal but also to anybody else who may be interested to check the transaction details.
For example, on Etherscan, if you know the transaction ID or the wallet address of a person, you can see all the details of the given transaction, such as
- The amount of funds sent both in Ether and in USD
- The wallet addresses of the sender and the recipient
- The transaction status
- The exact date and time when the transaction took place
Reduce costs and eliminate middlemen
The financial world the way we’ve known it for ages has always required some intermediary for any deal between two parties. When you buy an apartment or rent a car there must always be a real estate agent or a certified notary included in the deal and tons and tons of paperwork to do. Once you put all or at least some of the conditions into the code, you won’t have to depend on the human factor that holds back the process. Once the conditions are fulfilled, the code executes the command automatically and the deal is considered to be complete.
Also, smart contracts can play the role of the middleman in the gambling industry. Actually, online games and casinos were the first in line to grasp the benefits of blockchain and to implement it into their business models. The biggest problem with the traditional casinos is that the players always depend on the goodwill of the casino owner, and the owner always has a chance to cheat for his own benefit. Since you cannot undo or modify a transaction on the blockchain, cheating becomes impossible and the players can be sure that the results of the game are fair.
Protect your identity
Any successful business with a stable flow of clients is always in danger of hackers’ attack. Your watchful competitors are always eager to break into your databases and steal the contacts of the potential leads. Or worse, they can get access to their financial data, disrupt their transactions and even steal their funds.
With blockchain, it’s become possible to gain control over your identity and remain incognito at the same time. It works as follows. A user gets a personal ID on the specialized blockchain service with the encrypted key, fills in the personal details, such as date of birth or the driving license ID, and verifies this data. Then this ID can be passed over to the interested party together with all the needed details.
If an outsider gets access to the user’s profile he won’t be able to link it to any real person since the data is impersonated. If the user makes any changes in his profile without verification, the changes will also be visible on the blockchain.
Since the blockchain is a fairly new technology and the industry has not been well established yet, the numerous restrictions from authorities prevent it from mass adoption. However, the benefits it provides are obvious and inch-by-inch it finds its way from the world of geeks into the world of real businesses. And despite the current downtrend in the cryptocurrency market we may yet live to see the better times when people all over the world will be able to instantly send funds overseas, the counterfeit will be eliminated by the code and no middlemen will be needed to conduct a deal.