Blockchain is the world’s leading software platform for digital assets. It is a new and innovative way that people and companies can create, verify, and enforce transactions without a middleman or central authority. Blockchain is basically a decentralized ledger that records transactions chronologically. Transactions recorded on blockchain include the exchange of money, property, or anything that requires an enforceable contract or authorized access.
Many small businesses have no idea that blockchain technology can be used for much more than the creation and exchange of cryptocurrencies. Blockchain is the platform upon which other applications can be built and currently, its most popular use is the decentralized ledger that tracks cryptocurrency transactions. However, blockchain technology can also be used as a decentralized ledger that records and verifies any transaction or contract between two parties. This is why businesses have figured out that such self-reliant data infrastructure is useful for things far beyond cryptocurrency.
The fundamental way that small businesses use blockchain technology is by accepting cryptocurrency as a form of customer payment. Blockchain can help bring products and transactional services to market quickly and inexpensively, and get rid of the traditionally high costs of security, data storage and other overheads. It can speed up the exchange of property, manage the overall execution of business contracts, streamline overall contractual enforcement, track and verify identities, and many more.
Blockchain transactions are called “smart contracts”. Smart contracts are the automated computer protocols that facilitate, verify and enforce the negotiation and performance of a contract on the blockchain. They provide faster transaction execution and lower transaction costs. Smart contracts can help small businesses to settle interest fees, pay employees or bills, create insurance policies, close new deals or any other transactional activity, handle fulfillment of inventory, etc.
The blockchain technology is vital for small businesses because it will change the way transactions are negotiated, verified, executed and enforced. Since the blockchain makes transactions easier, the speed, safety, transparency and low cost of the blockchain’s decentralized ledger will be a huge benefit for small businesses.