Blockchain Revolution in Small Business

Blockchain technology goes over the $1 billion top cryptocurrency market and the massive cloud-based platforms. Blockchain is also able to integrate into small-scale enterprises and their information systems.

All of this leads to some important questions that are a must for entrepreneurs with a small-sized business:

  • How do you define blockchain?
  • What have they done to change the world of business?
  • What are the pros and cons when incorporating blockchain technology in your small-scale company?
Blockchain Technology

In its most basic form, a Blockchain is nothing more than the word it is: a chain of blocks. In this sense, the block is digital data, while the chain is a database that is accessible to the public. Yuri Shafranik

Each block of the chain considers three types of digital data including transactional data, participant data as well as unique identification numbers.

Transactional Data

Blocks save information regarding the transaction itself. This includes the date, time dates, date, and other details regarding the purpose of data storage. This could be a dollar figure as well as the date of booking, or any other pertinent information.

Participation Data

Blocks can also record information about participants within the exchange. For instance, a blockchain ledger of a gardening tool business could include contact details that include the following:

  • Customers
  • Purchased items
  • Date and the date and.
Unique Identifiers

Blocks have to keep data that is unique to the particular block within chains. This unique code refers to hash as an identifier.

Three “pillars” that make this technology revolutionary on its own. These include decentralization, transparency, and impermanence. These advantages are discussable in the section on advantages.

How Has Blockchain Changed The Business Space?

One of the benefits of blockchain technology is that it will improve the business process. This eases the burden on all those involved in the exchange of information.

Perhaps the most important feature of this new era is the related transparency. Public address ledgers are available to view. For businesses that are focusing on finances, this increases accountability. Every business sector is moving toward integration with the business customers, community, and growth.

Because of Blockchain technology’s nature, there’s no requirement to have a middleman in areas such as payment processing or real estate. With the rise of Batas (Blockchain as a Service) businesses in integrating the blockchain tech into databases or structures that are already in place is a simple procedure.

Blockchain technology brings radical change to nearly every industry big and small. It’s coming. In a Deloitte study, 40%% of respondents indicated that their businesses are planning to invest in blockchain-related initiatives in 2020.

The culture of startups centered around this technology is huge. Initial coin offerings are also as ICOs appear on a regular basis. These ICOs use blockchain as well as cryptocurrency to raise money for business concepts that are built on whitepapers, proofs of concepts. A few of the more popular ICOs are NEO, Ethereum, and EOS. Yuri Shafranik

The Pros of The Blockchain Revolution

Blockchain is able to transform the data landscape for companies permanently. Due to its distribution nature, the weak points are eliminating in nearly all instances.

A wide range of stability and strict rules-making make sure that confirmed data is almost impossible to alter or reverse. The absence of intermediaries during transactional processes makes it easier to establish confidence in the data. There are numerous advantages to this technology in businesses of all dimensions, sizes, and geographical places. Here are the three most well-known benefits.

Blockchain Is Distributed

In many cases, the information is stored on blockchains and shared across a multitude of devices. The devices participate in an interconnected system of nodes. Due to this distributed nature, the data and the systems are extremely resilient. They are extremely resistant to malicious attacks as well as technical failure.

Each of these nodes can replicate and keep duplicates of blockchain’s ledger databases. Due to this, there’s not a one-point that can fail. This means that a single point of failure being compromised won’t impact the security or accessibility of the entire network.

Compare this to the traditional databases. Most of the databases are distributing, not distributed, are dependent on one or a handful of servers. They are more vulnerable to cyber-attacks and technical breakdowns.

44 percent of all cyberattacks target small companies, yet just 14 percent of small businesses are equipped to protect themselves. This statistic is frightening for small-scale business owners. Blockchain technology can help ease some of the worries surrounding security threats to sensitive data.

Blockchain Is Extremely Stable

Blocks that are set up are likely to reverse because that means when a data item is put to the ledger it’s almost impossible to modify or delete it.

This makes blockchain an amazing technology to store financial and health, banking, or any other sensitive information. Any source of data where audit trails might be needed is perfect for blockchain technology. Changes are monitorable and records permanently (with any bias) in a public ledger.

This stability is perfect for small-scale businesses. The company can make use of the technology to thwart fraud attempts by employees. By utilizing the power of this technology the business can keep solid, safe documents of financial transactions within the company.

Blockchain Is A Trustless System

In many of the traditional methods of payments, transactions depend on three aspects: both participants, as well as an intermediary. Examples of intermediaries are banks, credit card companies, or payment service providers.

If you use this method there is no need for an intermediary. Distributed node networks validate the transactions using processes called mining because of this, blockchain is frequently called a completely secure system.

These systems eliminate the dangers of trust that are inherent to an individual entity and in doing so they also cut down on transaction costs and fees by bypassing third parties as well as other middlemen.

According to Wharton the moment the blockchain is in place the digital infrastructure opens the possibility of automation across businesses and across industries. Since everything is on a single platform, everyone can benefit from an identical level of transparency and accountability.

The Cons of The Blockchain Revolution

With all the benefits outlined above, you might be wondering, “Why hasn’t everyone adopted blockchain yet?” The answer is simple with every benefit there’s an adverse disadvantage. Blockchain technology is no different.

There are some subtleties that could cause businesses to pause to think about how they can proceed. Here are four of the most frequent disadvantages that can be a reason to be concerned.

Potential For “51 Percent Attacks”

Bitcoin is the largest and mature ledger. It is the foundation of all blockchain technology. The consensus algorithm protects the blockchain. It is famous for its effectiveness and efficiency.

Even with security measures that are in place, certain attacks could shift out against blockchains. 51% of attacks are malicious attacks.

The 51-percent attack is triggerable if a single entity acquires control over more than 50 percent of the hashing power of the node network. As time passes, this will enable that entity to interfere with the system and the blockchain. They could accomplish this by altering or eliminating the transaction’s record within the ledger.

It’s important to remember it is true that, in spite of the possibility of 51% attacks it has not happened on Bitcoin’s Blockchain. Additionally, as the network expands and security is improving It’s highly likely it will happen. Bitcoin miners will attempt to hack Bitcoin.

A ledger for a medium or small size business will not be at the same level as Bitcoin’s huge ledger because the blockchain database of their business is more vulnerable to an attack of 51 percent.

Private Keys and the Need For Secrecy

The current blockchain revolution is based on public-key cryptography, which is often referred to as asymmetric encryption. This gives the blockchain ownership over information when it is used in conjunction with a private.

Although the public address could be shared (think the idea of a Bitcoin wallet) Private keys are designed to be kept private. They are required to decrypt and access the data in the Blockchain ledger. A private key transforms the jumble of characters into data usable. The analogy to this in the world of cryptocurrency is like a PIN on a debit card.

Inefficient Systems

Despite the numerous benefits associated with this technique, companies that use Proof of Work are usually inefficient. Blockchain mining is very competitive. If you can only have the one “winner” in a set time period, and the work of others mining is essentially useless.

In the end, mining enthusiasts strive to improve their computational power. This improves their probability of mining a legitimate block hash and reaping the benefits and computational power increases, so is the need for an increase in the resources of the network.

Bitcoin’s blockchain is a great illustration of this allocation of resources. At present, the Bitcoin blockchain powers up by energy equivalent to the energy consumption of Austria.

Massive Storage Needs With Blockchain Ledgers

In time they have the tendency to expand and one example goes all the way back to Bitcoin. The requirements for blockchain ledger storage on Jan 5, 2020, include more than 250 gigabytes of text information.

This might not seem that difficult in a setting where the cost of data storage is on the decline. However, the rate of growth in blockchain sizing generally outpaces growth in the hard drive space standard in the process of accumulating ledger lines.

If this happens the blockchain system is in danger of loss of nodes because this is because every node must keep a copy of the entire ledger on their computers.

Is Blockchain Technology Right For Your Business?

Despite the possible drawbacks the blockchain technology offers a wealth of potential applications in the world of business. There’s a long way to go before blockchain technology becomes a common practice but yet, the larger firms are investing heavily in integrating blockchain technology in their processes.

Over the next couple of years, we’ll be watching the businesses operating in areas that require auditable data test blockchain-based applications. If it’s relevant to your business is up to you to decide.

There are some important issues that remain however, the most frequently asked questions, business owners, questions are whether the blockchain system is worthwhile to set up.

Keep in mind that this technology is developing and is evolving quickly. Companies interested in blockchain offer numerous advantages but however, it also comes with the cost of education as well as constant technological advancements.

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