For what has been almost a decade, there has been no bigger buzzword than blockchain. The ever-growing technology has reached the point of smaller businesses needing to seriously consider the opportunity of implementing blockchain into their business plan. A Gartner study predicts that blockchain’s business value will be over $360 billion by 2026 and $3.1 trillion by 2030. The backbone technology of cryptocurrencies like Bitcoin is now a potential solution for various pain points, offering security, speed, and low costs. Here are a few ways small businesses can implement blockchain:
Over the past year or so, large companies like Expedia, Microsoft, and Overstock began accepting bitcoin as a valid payment method for their online retail transactions. Paypal also recently started to enable users to buy and sell cryptocurrency to take advantage of digital payments’ continued growth due to the COVID-19 pandemic.
Paypal CEO Dan Schulman discussed the inevitability of the growing digital currency: “The shift to digital forms of currencies is inevitable, bringing with it clear advantages in terms of financial inclusion and access; efficiency, speed and resilience of the payments system; and the ability for governments to disburse funds to citizens quickly.”
So, while larger companies are beginning to adapt to cryptocurrency, are the same benefits Schulman mentioned available for small businesses? The answer is yes.
The immediate benefits for a small business accepting cryptocurrencies include the potential removal of processing fees and chargebacks. Also, small businesses could begin to provide international usage for their products.
A small business may also think that while it’s great in theory to accept cryptocurrency for their eCommerce, it’s probably also too time-consuming and potentially costly to set up. However, bitcoin integrators like Coinbase, which is integrated with Shopify, work to make the process as seamless as possible, secure, and free for any business to implement.
Since it burst onto the scene in 2009, blockchain has come a long way to eventually becoming a potential solution for improving logistics and supply chain management.
Blockchain is even set to play a role in distributing at least two COVID-19 vaccines next year. For this supply chain use case, blockchain will manage multiple parties and act as a transparent and truthful source.
For retailers and smaller businesses, implementing blockchain into the supply chain provides a way to reduce the labor and amount of paperwork associated with product shipping (especially for companies that ship internationally).
This solution means all data associated with a shipment can be entered automatically (or still manually if preferred) on to the blockchain throughout a shipment’s journey. Along with any other middleman, the merchant and buyer can even track a shipment and verify it through its entirety.
For this process, and with the vaccine example mentioned previously, the other significant benefit is that hosting shipments on a blockchain is accurate, trustworthy, and promotes accountability. Only the parties involved can access and verify within the database.
One organization that helps businesses with implementing blockchain-based supply chain and logistics solutions is Provenance. Provenance can act as a software or a consulting service to empower business owners’ commerce initiatives through meaningful transparency and expertise.
Cybersecurity issues continue to be a hot topic and pain point for many companies throughout 2020. Another area blockchain can help improve small businesses is cybersecurity and customer protection.
Blockchain is one of the more secure and trusted cybersecurity measures because its ledger system is decentralized. Imagine an accounting ledger book isn’t just in one location, but all of its pages are stored worldwide, which is how blockchain is decentralized. Its built-in security measures also don’t mean that having access to one “page” of the ledger means you can access the entire data set.
This set-up reduces the risk of unauthorized access and identity theft or fraud.
By utilizing blockchain, small business owners would have control of their consumer data. They can act as a tool that allows merchants to analyze how customer relationships and spending patterns have changed over time.
As an example, Guardtime utilizes its enterprise blockchain solutions to provide cybersecurity for various businesses and industries. Their solution is constantly verifying changes made to data made on a company’s chain. This set-up means that only one node of data can change at a time, even in a cyberattack scenario. Guardtime needs one node to exist to restore a company’s entire system.
Back in 2018, Statista projected that over 60% of the blockchain market was in the financial sector. Just two years later, the continued growth of blockchain is staggering. The opportunities and innovations are growing at incredible speeds. The reality is that small businesses did not have the logistical applications for blockchain solutions as they do now.
From cost reduction to more security, blockchain should continue to become less of a buzzword and a more serious investment.