Today, the concept of blockchain technology is all but synonymous with cryptocurrency – it’s through pioneers like Bitcoin that everyday consumers have come to recognise this revolutionary and instantaneous mechanism for executing and recording financial transactions.
But in the wider business sphere, increasing curiosity is beginning to turn into innovation and experimentation. This is because it’s anticipated the application and benefits of blockchain could be more far-reaching than first thought – especially when it comes to shaping business models of the future.
In fact, the use of blockchain to complete financial transactions is arguably one of the more rudimentary applications of this technology when we consider the possibilities. Blockchain means we now have a way to handle information without relying on a single trusted ledger, such as banks in the context of cryptocurrencies.
The proof of concept
Across all industries, how we verify, audit, enter, record, and update data has traditionally been left to a patchwork of different technologies and mediums that are owned and monitored by companies and institutions. These could be anything from spreadsheets, ledgers, books, and computer software. For businesses, this can make the task of dealing or transacting with other companies incredibly difficult or onerous, especially when they’re overseas, because there’s usually no way to verify or trust the information they provide. At best, a third-party intermediary will be relied upon at great cost.
Cryptocurrency has been a proof of concept on the path towards revolutionising the type of record-keeping which underpins all businesses, whether it be contracts invoices, compliance, payments, tracking ownership of assets, and much more. By relying on a decentralised digital ledger for both domestic and cross-border transactions, there will be greater trust between parties, less verification required by government or legal entities, and no doubt, reduced costs.
A new era of globalised businesses
Blockchain could mark the beginning of a new era of globalisation as the movement of capital, assets, and people becomes faster and cheaper. In an age where it’s crucial to know where products come from – whether that be for reasons of biosecurity, financial security, anti-terrorism, or authenticity – new businesses will be able to enter global supply chains simply because it’s more cost-effective to verify information and easier to detect false information.
The global labour market could also be significantly and positively impacted by emerging blockchain technology. When it’s imperative to prove a person’s skills and qualifications, relocating talent around the world for work can present a series of challenges for companies today. Blockchain could make it easier to verify information around skills, licensing, or training at relatively low cost, giving new opportunities to skilled workers in previously untapped talent pools. Meanwhile, this will go a long way towards helping companies overcome domestic skills shortages.
But this isn’t just about record keeping, tracking contracts and payments, and verifying information; even bigger opportunities could be realised by companies who eventually work out how to exploit the efficiencies of blockchain to handle the information processing and information input aspects of their business operations. Indeed, the emergence of blockchain could be reminiscent of the movement online many years ago. The internet enabled businesses to move many of their back-office processes and customer interactions online to achieve greater efficiency and increase their market share much faster. Blockchain really could be the next evolution.
Brand-new infrastructural technology
Brand new ways of financing businesses and startups could be developed through blockchain technology. As an alternative to traditional equity shares, new businesses could create and issue the currency with which customers will purchase or use things – much like utility tokens. A great example of this could be the ability to trade in computer memory.
There’s even opportunity to develop new corporate governance models which make the decision-making process within large companies more transparent and democratic. Currently, huge strategic decisions are the result of face-to-face-meetings between select groups of people at infrequent times. Blockchain could redefine this process by allowing larger numbers of people who hold the issued currency to collectively and securely vote on proposals. What’s more, votes will be recorded and completely auditable on the blockchain.
Blockchain could bring a brand-new infrastructural technology for how companies and organisations actually work in terms of how they handle and process data, invoice, pay suppliers, interact with consumers, finance, and operate more efficiently on a global scale. As new and existing businesses begin to experiment with and adopt this technology, we’ll no doubt see blockchain have an increasing impact on the consumer experience – as well as internal processes.