Blockchain technology has penetrated deep into a number of industries in recent years, particularly the banking and financial sectors. Enhanced security, accountability and transparency being the core benefits of blockchain technology, it is fast replacing the traditional business models. Well, business firms are still experimenting with blockchain, and the first phase of its implementation has yielded impressive results.
According to a Forbes, around 90% of the European and North American banks are exploring the technology. Today, security and transparency are two of the key priorities of every organization. Adopting blockchain technology, the organizational mechanism in business firms receives a boost.
Well, you may perceive the situation as a disruption of the traditional setup in business, but in reality, blockchain has tremendous potential for a vast plethora of industries.
Let’s have a look at the changing structure of business models, with the emergence of the blockchain technology.
Higher speed of execution
In the digitized business infrastructure, speed of execution of the projects is one of the key factors that drive the business. Integrating blockchain technologies on the platforms result in higher speed of execution of the projects.
Smart contracts are used in mutual distributed ledgers, according to the rules in each business. Business firms are using computer protocols, that verify, facilitate and enforce the performance or negotiation of a contract.
Besides, business firms can customize this integration on the basis of each contract. They can streamline the transactions by eliminating the intermediaries and counterparties. Evidently, you can execute contracts and trades seamlessly in a fast-paced business environment, as technology replaces the middlemen. At the same time, business firms also benefit from the cost reductions.
Increased productivity in business is one of the factors, leading to the large-scale integration of blockchain technology across the industries. The global blockchain market is fast developing. By 2024, the blockchain industry is likely to cross a valuation of $20 billion.
The internet has been successful in increasing the productivity of organizations and individuals more productive. However, the door for improving the transaction mechanism is still open in the 21st century. Blockchain has the potential to make this mechanism efficient and open, which is an essential operational trait in the internet era.
The technology can cut down delays in delivery, reduce costs, eliminate risks and improve the quality of products and services. As a result, industries are becoming more technically refined, and the marginal reduction of manual labour is evident in the global business setup.
Making the supply chain more efficient
Blockchain Technology can be used to refine the supply chain in business firms. For instance, company manufacturing aircraft might integrate blockchain technology to manage the relationship with its suppliers professionally. The suppliers, producing components and parts of the aircraft, are able to share the same data about new models of the aircraft. This is applicable in all the stages of the designing mechanism, right from planning, conceptualizing, assembling and delivering the parts. Blockchain technologies can also help them in maintaining the machines.
Peer-to-peer transactions across the globe
The evolution of Bitcoin is a perfect instance of the changing structure of peer-to-peer transactions around the globe. However, blockchain technologies have potentials beyond cryptocurrency. It can assist the secure, speedy and cheap fund transfer across the world.
Online payment mechanisms, such as PayPal are efficient in transferring funds internationally, but the transaction fees are high. Besides, certain limitations are also visible in the P2P payment services. These include specific caps on the transfer amounts and location restrictions.
The emergence of cryptocurrency is likely to change the model of transactions of funds across the globe. Today, blockchain technologies are being used by only 0.5% of the global population. This figure is likely to rise in the coming years, with more industries inclining towards the technology.
Various analytic tools, statistics and other evaluation mechanisms have been adopted for forecasting the business environment over the years. Blockchain technologies are likely to change the overall mechanism of consulting, approach, forecasting and analysis.
Various online platforms are coming up with decentralized prediction systems for business firms. These technologies can be effective in placing and monitoring bets in a decentralized way, on any aspect, from sports to stocks. Evidently, the traditional forecasting mechanisms adopted by business firms are facing a stiff challenge from blockchain.
Blockchain Development can cut down the complexity and cost in the operational process of business to a large extent. Today, a large section of industries is following the open-source model in developing blockchain technologies in order to fully utilize the potentials. This technology has the potential to reduce the operational costs of banks by 30%.
When seamlessly implemented, the participants can concentrate on their individual efforts on certain platforms, hardware systems and applications in the industry, in order to support transactions. Blockchain technologies are likely to revolutionize the business models in the insurance sector, ride sharing and public transportation, charity, cloud storage, voting, energy management, real estate, networking and a vast plethora of other industries.
No wonder, an increasing number of industries are embracing blockchain technology.