How Does a Company Benefit from Blockchain Technology?
Blockchain technology is known mainly for its cryptographic currency. However, this technology can also be used in traditional as well as new businesses. Let me remind you that a blockchain is a distributed database that contains information about all operations performed between parties – participants of any process.
Records from the registry are visible to all participants of the process, they can not be removed or changed unnoticed retroactively.
With the help of the technology, it is possible to get rid of intermediaries in business, and thus to reduce costs, for example, on registration of contracts, and also to exclude fraud. Blockchain allows you to monitor all processes in real-time and save on audits.
The very introduction of technology is comparatively inexpensive, but before the company’s management must understand the basics of the technology and understand what business processes blockchain will bring the greatest benefit.
A large company is likely to be easy to convince all partners and counterparties to connect to the system based on the blockchain.
The financial sector has pioneered the use of the blockchain. This is not surprising: the idea of cryptocurrency transactions between wallets can be easily transferred to traditional bank transfers.
Moreover, we often become a participant in the chain without knowing it ourselves. For example, when we book Duluth Hotels. Cross-border money transfers on the basis of a block-keeper take minutes, while through the international payment system SWIFT, especially if there is no correspondent relationship between the sender and receiver banks, the transaction can take up to three working days.
Blockchain can be used both for customer verification and in the future – for reporting to regulators.
A consortium of European banks, led by Swiss UBS, has launched a blockchain platform – in accordance with the new EU banking laws, which came into force this year and require banks to disclose more data and conduct more thorough checks on clients and counterparties.
EU banks are now required to assign each legal entity client a 20-digit identifier containing all information about the company (name, location, industry, etc.).
Company data is recorded in a distributed registry, each entry is indisputable, but it can be updated with the next entry. The chain will show the entire history of a particular company and its operations.
Blockchains will be most useful not to companies with a dozen proven counterparties, but to an enterprise with many suppliers, buyers, franchisees, which need to be constantly monitored.
One of the examples of suitable industries is logistics. Together with the cargo, the supplier sends forwarding documents, which are checked by warehouse staff and customs officers at each stage of delivery.
In maritime transport, it is not uncommon for documents to take longer than the shipment itself and for the recipient to wait for them to receive the goods.
Large companies have already launched projects using the blockchain. For example, DHL, together with the consulting company Accenture, has developed a system for tracking the supply chain of medicines.
The product is assigned a unique serial number that records every step from production to purchase. The distributed database shows that the medicine came from the manufacturer and is not counterfeit.
Another sphere of application of the blockchain is real estate transaction accounting.
According to the same scheme as in logistics, documents are uploaded to the blockchain, transactions are recorded there and accepted by all interested parties, including the registration authority.
Business at the blockchain is not done on its own. High results can only be achieved together with like-minded people in consortia and professional communities.