Blockchain and cryptocurrency are increasingly common features of everyday business conversation, yet most of us know very little about the technology behind them or their interesting and useful applications.
It is attracting evermore attention from business leaders, especially since the importance of having an online presence has been highlighted. Covid-19 has shown how vulnerable businesses (especially in retail) without e-commerce branches are to external shocks.
Blockchain technology facilitates the establishment of safe e-commerce branches by bringing added security, transparency and cost-efficiency to both businesses and consumers.
We connected with Dr. Aleksandr Shevchenko, an ex-Bitfury Blockchain expert and current CTO of SonoCoin, to help our clients understand more about the applications of this technology.
Blockchain technology establishes a layer of trust amongst people and organisations operating within the same business area for a couple of reasons.
Namely, the information in a block of the blockchain cannot be altered without changing all subsequent blocks. This means that every step of the chain can be traced. Secondly, the distributed and decentralized nature of blockchain means that the data is more secure - there isn’t a central weak point that can be attacked/corrupted easily.
Benefits of Blockchain for Large Businesses
This added transparency provides large retail businesses with numerous benefits, from boosting trust between internal departments, to better understanding supply chains, where there may be hundreds of suppliers and resellers involved.
Supply chain management has been transformed by Maersk and IBM’s shipping container management project, Tradelens, as well as by Walmart and IBM in their efforts to create a safer food chain through the food trust network.
Blockchain Provides new Marketplaces for Small Businesses
Whilst small retailers don’t always need to worry about such large and complex issues, they do face other challenges. The competitive landscape of e-commerce today drives their desire for credibility and quality customer service. It is for this reason they sell through large marketplaces like Amazon or Ali-Baba.
As a result, they are in a very centralised, vulnerable position (in terms of trust and cost). Projects like OpenBazaar offer a solution to this problem, by providing a peer-to-peer, zero-fee marketplace, powered by Blockchain.
Cryptocurrencies Save Businesses Time and Money
The financial applications of Blockchain technology, namely cryptocurrencies, are the hottest topics amongst the tech communities and regulators alike. Although adopting the technology and the regulatory landscape may appear to be daunting, progress is being made towards making them easier to use.
Legal information is increasingly accessible and cryptocurrencies are rapidly becoming easier for both customers and businesses to use - including in e-commerce retail environments which require convenient payment systems.
The benefits of cryptocurrency enabled payment rails are clear to see: faster cross-border transactions and extremely low fees compared to conventional SWIFT/AMEX/VISA/Mastercard systems. This saves both businesses and customers time and money.
So What’s Next for Blockchain
In just 11 years Blockchain has transitioned from a niche ‘crypto-anarchist’ concept to a mainstream technology, with useful applications for business operations. Established companies are starting to move their business models towards decentralised and trusted analogues.
Cryptocurrency payments are already a widely used feature, whilst decentralised finance and supply chain management are following.
Finally, as customers become more accustomed to, and expectant of cryptocurrency payment in e-commerce, businesses will need to ensure they’re able to satisfy these demands. Ultimately, it’s up to business leaders when they decide to adopt Blockchain technology, but it will soon become a necessary step for any business that wishes to uphold its reputation as a trusted, secure e-commerce retailer.
As the transition to blockchain becomes increasingly important, it’s important to make sure that it is done in the right way, and with the right tools! At Arbolus, we work to connect businesses with world class experts, like Dr. Aleksandr Shevchenko. If you want to learn more from him about blockchain and how your business can benefit from it, click here to start the conversation!