If blockchain seems like yet another new technology that’s starting to take up way more space than your current mental bandwidth can accommodate (if you’re to be able to tackle the here-and-now stuff of managing your business), don’t despair.
It really does have as much relevance to small and entrepreneurial businesses like yours as it does to big businesses. None of you, though, need to be worried that you’re not ready to incorporate blockchain into your operational model.
Bo Zou, a Toronto entrepreneur whose sweet spot lies where customer experience and technology intersect, points out that blockchain is more than just a trend. “It stands to help transform many aspects of how business is done,” he says. “We’re not there yet. For one thing, there’s a shortage of developers experienced in the technology in order to make it all real.
“But there’s sufficient potential for blockchain in the space for small and emerging businesses, that those who study up and prepare now will be best poised for success,” he adds.
The blockchain is essentially a decentralized digital ledger that records transactions between two parties efficiently and in a verifiable and permanent way, negating the need for intermediaries. It’s more than a single platform (there can be any number of them according to the need) and its structure makes it very difficult to hack. And, yes, blockchain and cryptocurrency are inextricably linked, but blockchain has many uses beyond enabling digital currencies.
So what does that mean for your business?
Consider some of the applications that could play a role in helping you move forward.
- Smart contracts. Simply put, smart contracts are enabled by a blockchain protocol that automatically facilitates, verifies or enforces performance of a contract. As financial analyst Nikolai Kuznetsov writes in Entrepreneur, smart contracts economically help small businesses streamline their business flows. “Whether it be invoicing, paying employees or bills, settling interest fees, creating insurance policies, handling fulfillment of inventory, closing new deals or any other transactional activity, smart contracts can have a positive financial impact on small business,” he says.
- Identity verification. Identity fraud is a problem for businesses of all sizes (and individuals, too). The same blockchain protocols that apply to smart contracts apply to identity issues. Blockchain makes it easier to track and monitor digital identities, but even more importantly, to authenticate them. Toronto’s Bo Zou points out that the best customer experience doesn’t always come down to cool apps.
“Customers want to know that their sensitive information is safe,” he says. “When the small business can verify transactions without knowing the user’s identity, customers are a lot happier that they’re in control of who has access.”
- Supply chain. If your business needs to ship products out or accept deliveries to keep your shelves filled, the blockchain structure is ideal for overcoming the flaws of the typical systems driving it all. Its authentication features, for example, mean that the restaurant can monitor its food suppliers for quality and trackback items that may not measure up.
The blockchain is turning into a bridge to the future, creating any number of related new business opportunities as well as ways to operate. It’s more than just a revolution, as William Mougayar, Canadian businessman and author of “The Business Blockchain,” has said. “It is a tsunami-like phenomenon, slowly advancing and gradually enveloping everything along its way by the force of its progression.”