Blockchain is a hot topic these days. Everywhere you look there’s an article breathlessly hyping its vast potential. But does blockchain have practical uses for small business owners who are focused on the here and now rather than some future technological utopia?
It does. In fact, many of blockchain’s prime benefits are especially valuable for small businesses. Before diving into what it can do, however, what is blockchain exactly? Think of a massive spreadsheet distributed across unlimited computers, in which each data point is continuously updated, reconciled, and validated. Who entered the data? Who changed it, and when? Blockchain provides all this information in a secure format that’s transparent throughout the data set.
By dramatically lowering the cost to sort, segment, and store data, blockchain gives access to information that smaller businesses need to compete. Small business owners can tap directly into vast amounts of data coming straight from the horse’s mouth: the consumers.
Blockchain-based Basic Attention Token technology, for example, offers a clear indication of individual consumers’ purchasing behavior by tracking categories of ads a consumer is willing to watch. Endor is another blockchain platform that uses data voluntarily shared by consumers; when users ask specific questions about predicted trends to inform business decisions, Endor applies AI analysis to yield highly accurate answers based on the vast data it’s gathered.
That kind of access lets small businesses harness the power of big data to help with day-to-day business issues, such as:
- Making sense of consumer data with and for real-time insights that improve product and service development strategy, placement, and pricing.
- Evaluating what the competition is doing and how well it’s performing, so businesses can better position themselves for success within their target markets.
- Developing leads and increasing sales by directing marketing messages to consumers who have opted into this type of advertising.
Long story short: Blockchain technology can help to level the smaller company’s playing field with more deep-pocketed corporations.
Other Ways Blockchain Can Help You
But blockchain’s usefulness reaches well beyond data insights. Many people know that blockchain lies at the foundation of cryptocurrencies like Bitcoin. Accepting these digital currencies can help retain and attract customers who are looking to use these alternative forms of payment.
Small businesses are also finding the technology valuable when paying employees, vendors, and suppliers. Because it is an open ledger on which every transaction is publicly recorded, the enhanced transparency automatically builds trust in financial transactions. And because no single entity controls all the data, a blockchain is considered more secure than most other financial systems. Secure, low-cost money transfer also makes it easier to do business in a global marketplace, since buyers can purchase products and services without steep fees for international payments.
Transparency is an advantage for small businesses in supply chain management, as well. In the diamond trade, knowing the route that gems have traveled from mine to consumer is a critical element of pricing. Everledger’s blockchain solution tracks each stone, limiting the potential for illegal diamond trade and fraud. By offering clear visibility into each step of the production and distribution process, blockchain allows business owners to discern where and when problems arise, which can help to prevent some issues and hold parties accountable when a misfire does occur.
Smart contracts based on blockchain technology represent yet one more way it can save business owners time and money. Structuring any type of contractual agreement — purchases, payment terms, loans, etc. — with blockchain means buyer and seller can fulfill their portions of the agreement independently. The blockchain protocol automatically verifies completion and instantly triggers the appropriate response or subsequent action.
And finally, there’s identity verification. Blockchain can be invaluable for helping small businesses track and confirm the identities of their customers. Whether for marketing purposes, limiting access to premium content, or facilitating secure account login, blockchain can help strengthen authentication protocols to reduce risk for businesses and customers alike.
Although blockchain technology is still emerging, it would be a mistake for small business owners to overlook the many ways this technology can benefit their company today. Many business owners are already using blockchain in one or more aspects of the company’s operations, though they might not know it. Even the coffee in the break room could be a blockchain success story. Bext360 uses blockchain to monitor the coffee supply chain, ensuring that Fair Trade coffee is indeed providing a fair deal for the growers who produced it (and that your expensive mountain-grown coffee truly originates in the peaks).
Blockchain technology offers a host of benefits and an ever-increasing range of practical applications for businesses of every size. If you’d like to learn more about ways blockchain can help your business thrive, please schedule a consultation with the business and technology advisors at CRI.
*Applications and technologies discussed in this article are simply examples, and not endorsed by CRI.