Small businesses and start-ups are looking for new and efficient ways to serve their customers and optimize their overall business. Blockchain technology can help these businesses to raise capital and conduct transactions. While many small businesses consider blockchain technology to be expensive and only accessible to large companies. However, the cost of developers and integration of blockchain technology in your business is quite less than you think. Several blockchain development companies are stepping forward to help small business startups to incorporate blockchain technology to optimize their business.
Blockchain technology also known as the “Decentralized Ledger Technology” was associated with the BFSI industry for many years. However, it has only been a few years that the technology has shown true potential in several industries including gyms, bakeries, restaurants, nail salons, healthcare, collision centers, and other small businesses that require a brick-and-mortar space. If you are owning a business and looking to integrate technology into your organization, here are some benefits that you will receive.
4 Ways Blockchain Technology Helps Small Businesses
After the global COVID-19 pandemic, businesses have leveled up their game increasing the competition in the market. If you want to stand out in the market, blockchain technology is the key. Here’s how!
Accept the Trending Cryptocurrencies as Payment
Accepting cryptocurrencies as payment is trending in several countries including the United States. According to a research agency, 75% of US retailers are opting to build crypto payment infrastructure to stand out in the competition. Cryptocurrencies are widely popular today, with more than 300 million people already using them around the world. Since traditional financial services are not equipped to accept cryptocurrencies, it will take time, planning, and testing before rolling it out. That will require the small businesses to evaluate and make a budget for the digital wallet which will act as the merchant payment gateway that will help the business accept cryptocurrencies.
There are a few advantages for businesses that accept cryptocurrencies that are built on a blockchain architecture. The customers will view it as progress in paying for the products and services in any form of money. This also saves a lot of money, as there are no intermediaries involved, cutting down the transaction costs. Another major advantage of utilizing blockchain technology is that the payments are irreversible, and payment, which leaves the customers with no other choice other than contacting the business directly in case of refunds. Often the customers make a purchase, but cancel the payment from the credit card, which leaves the business in between. Crypto payment gateways resolve such issues, as the payment is conducted directly, removing the chargeback issues.
Cheaper and Safer Cloud Storage
Individuals and businesses spend more than twenty billion dollars annually on cloud storage. The storage application of blockchain technology allows small businesses and individuals to store and save data in a better way at a cheaper cost. A blockchain cloud storage breaks the user data into small chunks and incorporates an extra layer of security, then distributes it throughout the cloud network. This is made possible after utilizing public or private key encryption, transaction ledgers, and hashing functions. Every piece of data is stored in a decentralized area. In case hackers try to hack into the file, the encrypted data protects the entire file, and offers only a small chunk. This way all sorts of information is stored in the blockchain cloud storage systems.
Moreover, the owner’s data is hidden, as the node doesn’t store it. Load balancing mechanisms and data redundancy are applied for quick access and high availability. Whenever any member of the network tries to access the data, all the information present in the network is validated. In case of any altercation, any member that changed the data is removed from the network. Since there are copies made for every data, the altered data is then replaced with the original one. Several companies have joined the blockchain cloud storage to give a new shape to their business. Blockchain is the cheapest and newest way to get cloud storage as many small businesses participate in it by providing space for data storage, and computing power. This way, the companies can not only reduce the cloud storage costs but might also get paid.
Leverage Smart Contracts
One of the popular uses of blockchain technology is smart contracts that are self-enforcing, and self-verifying contracts. The contract is stored within the decentralized ledger which makes the contracts immutable and secured. The smart contracts include agreements with suppliers, and vendors, employee contracts, smart leases, and more. Some of the advantages of smart contracts for startups, and small businesses include:
- No intermediaries
- Cuts extra costs
- Security and Trust
Smart contracts are often regarded as the replacement for traditional paper contracts to digital contracts. It offers a variety of benefits in terms of increased efficiency, data security, and low transaction costs. Ethereum, a global blockchain network was the first to introduce smart contracts in the industry.
One of the basic challenges faced by every startup or small business is raising capital. While only a few founders can enter a room with capital sources, only 0.05% of startup companies are able to collect capital. However, innovative technology platforms such as blockchain are making ways for small businesses to raise capital. It is helping new and emerging small businesses to access funding in several ways such as Initial coin offerings, initial exchange offerings, and security token offerings. It is an alternative that small businesses can opt for instead of private equity firms, traditional banks, crowd-finding sites, and lenders.
The tokens are available in exchange to trade freely and are equal to a revenue share or equity. Interested investors can buy the offerings, and in return will receive blockchain-underpinned tokens from the company. The token will offer utility for using a service or product of the company or even represent any stake of the company. The Initial token offerings also known as ITO, have become popular over the years, and with the growing loyalty, it is a viable alternative for raising capital for businesses. These tokens can be bought, traded, and sold in the market, where a new place of liquidity is offered to the local public.
Blockchain technology has evolved as one of the potential technologies to build trust between businesses and customers. Whether it is a new payment method, or utilizing cloud storage for storing data, blockchain has the ability to optimize your business in every way. As an entrepreneur, if you are willing to improve security and speed, then blockchain technology is the right blend for your business.