Thanks to all of the media attention surrounding Bitcoin and other cryptocurrencies, blockchain technology is often connected with funds. But that is too narrow a vision of this technology’s true capability — the concept of a signed and dispersed ledger is universally applicable to business processes.
Blockchain technology functions as an objective, technologically sound way to get rid of the middleman from several distinct types of trades. When a step in a procedure gets nonessential, removing it becomes evident, awarding companies immense potential to streamline operations in many ways; we’re seeing the technologies seem in industries like retail, provide chains, and more.
To put it simply, blockchain technology will proliferate industries far and wide at a speed that will leave consumers and business leaders fighting to keep pace. The shift in the air has the potential to cannibalize present revenue streams and create new revenue streams; companies that don’t start implementing it will probably find themselves losing to competition.
Executives implementing blockchain into their businesses are starting to see several operational improvements, such as:
Lower operating costs:
The blockchain functions as an intermediary, so there is no need for a middleman to facilitate direct transactions. Smart contracts streamline processes, making them cost-effective for businesses.
A common ledger improves the assurance of both sellers and buyers. It can be a boon for legitimate companies.
To put it differently, if the agreed-upon conditions are fulfilled (as confirmed by every node on the system ), an action is triggered automatically and immediately. This greatly reduces confirmation times, which could bottleneck execution speeds.
These benefits are significant, but maybe they are not as radical as among the foremost changes blockchain beyond accounting attracts: opening new avenues for revenue generation.
Consider, for instance, SWIFT, a financial messaging services provider: In 2017, SWIFT launched a Proof of Concept made to streamline cross-border obligations. This is vital because these payments account for nearly half of global payments. The current protocol is slow, especially among the unbanked, and exchange rates can fluctuate greatly in the period between when a payment is received and sent.
Unbanked people themselves present another chance for blockchain technologies to create new revenue streams. For example, it’s a lot easier to get a cell phone than a bank account. As a result of this, there are nearly five times as many mobile phones on the planet as bank accounts (5 billion vs 1.2 billion). Not only will they create more earnings, but they’ll also spend less on bank transaction fees.
We see this technology spilling over into entertainment, also. Smart contracts — lawful agreements based on blockchain engineering that payout artists’ royalties mechanically — is poised to revolutionize the music industry.
A couple of the biggest pain issues in audio are electronic rights management and royalty payments. An analysis by the Institute for Policy
Innovation estimates global piracy costs the music industry $12.5 billion yearly. This is because businesses playing tunes and customers listening without party spending, but blockchain has the potential to become the center aggregator that simplifies these difficulties. With a distributed ledger containing set terms for usage of a recorded file, each move and play could be tracked. This streamlines the process to make sure both the recording and artist studio can accurately monitor a tune’s reach and collect revenues accordingly.
It seems like a natural development as so many homes and business buildings are now equipped with energy-generating solar panels. In reality, the electric companies could cut out bankers from the equation much like telecom, and simply exchange energy with consumers on the blockchain.
This is rough as distilled as the version can act, as cryptocurrency tokens’ worth is influenced by the amount of energy consumed to generate them. The above article in The Guardian notes several startups, such as Power Ledger, are working on a platform for exactly that. Still another, LO3 Energy, is launching a green energy microgrid at Brooklyn, New York, dependent on blockchain technology too.
And what does this mean for the business? From the looks of this, some existing revenue streams might be threatened as blockchain’s prevalence grows. Banks, by way of instance, may come across a good chunk of the transaction fees considerably reduced (or even removed ) because of blockchain technology replacing them since the middleman — forcing banks to look for new revenue opportunities. In the digital world, businesses will probably notice cross-disciplines emerge; for instance, telecoms and internet service providers have a good understanding of customers, which might be leveraged for financial products.
While cryptocurrency receives all the press attention, the inherent blockchain technology is quickly being embraced into more businesses than you can imagine. If this rate of investment and progress is sustained, it’s going to be quite disruptive as little as only a couple of years from today. Business executives will need to begin paying attention and launch pilot programs as speedily as possible to embrace this shift.
Blockchain technology extends much beyond cryptocurrencies, and it is set to disrupt so much more than just financial institutions. The use cases abound, as well as the advantages are clear — and if that is the case, what is preventing you from getting started?