[This article was written by Emmanuel Darko.]
Have you ever wondered how the world would be without third parties, brokers, and financial institutions? It’s hard to imagine because there is nothing more difficult and unsettling than doing business with individuals or institutions you can’t trust. Imagine a day when you can settle your transactions without relying on PayPal!
Trust is the number one currency of business transactions. Blockchain technology, which operates under a decentralized ledger that reduces the number of players involved in a transaction without compromising the trust, can help you streamline your business, reduce costs, and increase efficiency.
Application of blockchain technology in online businesses
The rise in Etsy and eBay businesses have spearheaded the boom in e-commerce, with these businesses relying on third parties to facilitate trust between buyers and sellers.
With blockchain technology, smart contracts—or programmable self-executing code—can be used to automate business transactions., allowing an online business to be able to create a digital contract whereby the seller will release the product/service when the buyer has paid, or vice versa, streamlining e-commerce and bringing considerable servings to online businesses.
In recent years, digital data has become one of the most sought-after commodities on the internet; think of the Cambridge Analytica scandal or the recent hacks of Facebook and Google. The only common denominator is digital data.
Blockchains are resistant to hacks because the data is not stored in a single location but across several computers on a peer-to-peer network. Moreover, once the data is entered on the immutable ledger, it cannot be altered. This prevents internal business corruption and allows clients to have more trust in your business.
Perhaps one of the most important things we haven’t mentioned so far is that cryptocurrencies, being the shining star of blockchain technology star, were designed for online transactions. Traditional payment methods take longer (up to three days) and charge more.
Blockchain-based transactions are fast and cheap. While Bitcoin, which only accommodates 7 transactions per second (7 TPS), is considered slow, new technologies such as the Lightning Network are now employed to improve transaction speeds and drive down their cost. So far, cryptocurrencies charge less and have driven market competition, forcing financial institutions to lower their transaction fees.
Blockchain makes it possible for businesses to track their products, from the product source, through handling, shipping, and anywhere in-between, and increases transparency in supply chain management by utilizing blockchain technology to verify supplier communication and information.
Modern online businesses rely on technology to improve their services, minimize operational costs and offer better services. Blockchain technology has gone beyond the financial world and is disrupting almost every industry known to mankind.
However, blockchain technology is not a universal blockchain. Custom blockchains are being designed to be better-suited to various situations, with more and more online blockchain businesses launching through ICOs—you can stay up to date with new blockchain projects on initial coin offering (ICO) websites such as ICO Watch List.
The blockchain is revolutionizing how we store and exchange data with lowered uncertainty. While you may not think about integrating blockchain technology into your system, it will have the same impact on online businesses as the internet has had in the majority of our day-to-day lives.
Emmanuel Darko is a Blockchain technology entrepreneur and an advocate for the adoption and use of Distributed Ledger Technology (DLT). An ex-banker who has had stints in both commercial and investment banking when he worked with Zenith and Data Banks respectively and he is currently VP at ICOWatchlist.com.