The blockchain has paved the way when it comes to financial services. However, if you think that it is limited to just financial transactions and institutions, you might need to think again.
“The amount of venture capital fundraising for Blockchain-based companies so far in 2018 has already reached more than 40 percent of last year’s total, according to a report released by Crunchbase News on Feb. 27″.
The potential of blockchain technology has reached far and beyond what we could have imagined. The majority of people think of bitcoin and blockchain as the same. But there is a difference i.e. blockchain is a sophisticated algorithm developed for the cryptocurrency. It drives dispersed data structure that manages electronic cash movements.
Read more about exciting AI Blockchain projects here from LiveTiles.
The disruption of blockchain technology is influencing almost every sector that is directly or indirectly related to financial transactions. Startups and businesses are no exception and to harness the potential of innovative technology, let’s have a look at how it can be utilized.
1. Easy Access to Capital
The biggest obstacle for any startup is to raise capital to turn their ideas into reality. There are many countries outside the United States, where startups do not have access to fundraising and capital through financial institutions.
In most parts of the world, the lending mechanism is not up to the mark. Many hidden costs are linked to loans along with minimum deposit restrictions. The biggest challenge for running a startup adds oil to the fire through these restrictions and costs.
The blockchain is here to rescue startups as they can gain access to the capital without facing restrictions. As a startup entrepreneur, you may know that not all ideas are well enough to deserve funds. However, blockchain will give the opportunity to fundraise for the idea only if digital currencies like Ethereum or bitcoin operate independently of geographic location. In simple words, everyone will be able to send and receive cryptocurrencies without additional fees.
2. Supply Chain Verification
The blockchain is also helpful when it comes to supply chain. Most of the entrepreneurs are aware of where they are buying from directly but don’t know who their vendor’s suppliers are. Blockchain could help businesses in knowing the supplier. For instance, if a device is not working, using blockchain they can see who the original supplier was and identify every suspicious product.
The blockchain is also helpful in attesting things like ethical sourcing and avoiding counterfeit parts. With the help of transparency in the supply chain, many of the businesses can avoid uncertainties that have crept businesses since the beginning. It will also help businesses to confirm that the suppliers meet their requirements.
3. Fully Automated Legal Agreements
The majority of industries are working on how to utilize blockchain for business. When it comes to legal agreements, blockchain could automate the process because it is mainly a smart contract. Startups and businesses can automate the process of legal agreements and documentation without the involvement of humans that slows down the process.
For instance, if we see how agreements are delayed, it requires documentation and signatures by both the parties. However, there may be a delay due to not signing off the document. Blockchain will help in eliminating the delay from businesses that require signature and approval.
4. Identity Protection through Blockchain
Businesses are always under the threats of hackers who are keeping an eye on stealing data. The data is normally related to consumers’ private data that includes financial information. With the help of blockchain, customers can take the control into their own hands with an encryption key so that only business and customer would have access to it.
Once it is fully deployed, companies can keep the information secured and the chances of hacking the data will become almost impossible.
5. Transparent and Accountable
The main benefit of opting for blockchain technology is its accountable and transparent nature. All transactions that take place occur on a public ledger, encrypted and secured without giving the authority to anyone to manipulate it.
Startups and business owners are not vigilant enough to track the transactions. However, with the help of blockchain, the information can be validated and trusted. The power of blockchain technology is much more and beyond cryptocurrencies.
These are just a few examples where blockchain can play a significant role in business and startup showground. With the major threats of security and inefficiencies prevailing in the business world, blockchain adoption can help them deal with it effectively and efficiently.
