When cryptocurrency trading company Coinbase recently went public, it raised a lot of interest in blockchain technology. A decade after its rise to prominence, blockchain technology may finally be reaching the point where every company—no matter its size—needs to start paying attention.
Businesses of all sizes, even those that aren’t in the technology industry, should begin researching and evaluating some of the blockchain technologies and services that are now available.
However, there are several things you should know if you are a business owner or manager on how this changes things in light of the proliferation of blockchain consultants, blockchain-based companies, and technologies.
What is blockchain technology?
Blockchain is a method of recording information in a way that cannot be altered, hacked, or manipulated. One of the most fundamental functions of the blockchain is to act as a decentralized digital ledger for recording and sharing financial transactions.
Each block in the chain contains several transactions. And each participant’s ledger is updated each time a new transaction occurs on the blockchain.
Distributed Ledger Technology (DLT) refers to a decentralized database managed by multiple participants. Blockchain used an immutable cryptographic signature known as a hash to record transactions on the blocks. Look at the four ways that businesses can get into blockchain technology.
Accepting payment through cryptocurrencies
The first way businesses can get into blockchain technology is by accepting cryptocurrency as payment. Major corporations now accept Bitcoin and other digital currencies, among those, are companies like AT&T, Microsoft, and Tesla. As the adoption rate rises, small businesses may want to follow suit.
There are also many places that accept bitcoin payments that enable businesses to transact with their suppliers and vendors through cryptocurrencies. The announcement by international payment companies like PayPal and Visa allows millions of merchants to accept cryptocurrencies.
Raising capital innovatively
Raising capital is another way businesses, particularly small businesses, and startups can use blockchain technology. A business can prefer to use a Security Token Offering (STO) instead of more traditional ways of raising capital, such as bank loans, crowdsourcing websites, or venture capital.
As a way of raising money for a startup, a business can crowdfund through STOs. This allows investors to invest and, in return, get a share of the business. STOs offer a secure way to raise capital for a startup or expand a business.
Creating Non-Fungible Tokens (NFTs)
The creation, sale, and purchase of non-fungible tokens is another popular way for businesses to interact with blockchain-based technology. A digital artist named Beeple sold an NFT of his work for $69 million at auction in early 2021, igniting the NFT market. Some businesses are also interested in creating their own NFTs for sale. But NFTs are more than just digital artwork.
Every NFT asset is unique and cannot be duplicated. But they are all secured by the same blockchain technology as cryptocurrencies. NFTs, in their uniqueness, are worth what someone is willing to pay. A business can take advantage of the NFT trend by producing and then reselling these tokens.
Demonstrating product source
As previously stated, blockchain technology functions on a decentralized digital ledger. Some companies use these ledgers to document their products because each is a permanent record. Customers can have confidence in the product’s origins thanks to blockchain technology.
A business can use blockchain-based verifiable sourcing technology to show customers how environmentally friendly their products are.
Consumers use a blockchain QR code printed on each product to track how the item was produced and its carbon footprint. The consumer can tell precisely how a product is made and help them make better purchase choices. This can enhance a business’s credibility and track from its customers.
For blockchain oil and gas, it enables oil companies to track the movement of oil from the source to its destination. It gives live reports, ensuring no leakages in pipelines that could damage the environment. Similarly, a business can track good items from the source in a food business, ensuring that they’re safe to the end-user.
The Takeaway
There are several ways a business can utilize blockchain technology in its operations. Accepting cryptocurrencies is the easiest way to start. But they can also allow their customers to know the sources of the products they buy. For startups or businesses looking to raise funds or expand, STOs can be the saving grace.