If you are having a hard time trying to make ends meet with your startup, one solution is to start accepting cryptocurrency as a form of payment for your products or services and also use it for your own transactions with vendors. Using blockchain technology can help you grow your business in many ways. However, before discussing how it can help your business flourish, it’s necessary to first describe what a blockchain is and how it works.
What Is Blockchain Technology?
In 2009, Satoshi Nakamoto, an alias name for the unknown founder of Bitcoin, a cryptocurrency, changed the way we think about currency. It became possible to manage a financial transaction without a bank acting as a middleman. Bitcoin introduced an alternative to traditional banking and currency exchange because it was based on blockchain technology, which can be described as a distributed ledger that keeps an ever-growing list of all financial transactions across a network of computers. As a result of this invention of a new currency, cryptocurrency became a form of monetary exchange that could not be stolen or hacked. Secure financial transactions from supplier to buyer to the consumer was possible without the need for a bank to mediate the transaction.
The Rapid Evolution of Blockchain Technology
The blockchain platform has experienced two evolutionary leaps and it’s poised to experience a third transformation. The first wave occurred when Bitcoin made it faster and safer to conduct online transactions. The second wave occurred when another cryptocurrency called “Etherium” was developed. Based on a Turing-complete programming language, it introduced a new possibility into the blockchain. While Bitcoin could be compared to a single app, Etherium was more like an operating system that could host numerous apps. Now a third evolutionary leap is emerging through the XYO Network, which is making it possible for blockchain technology to move beyond transactions based on the Internet. Now blockchain will be available to the offline world.
How Blockchain Technology Can Help Your Small Business
Here are a few examples of how you can use blockchain technology to increase the financial flexibility of your small business:
1. You can replace regular contracts with smart contracts: While contracts are a useful tool in managing business relationships, they do have some limitations because they are paper-based agreements. As a result, they can be misused and subject to fraud, censorship, or delays. The 2013 Etherium Project introduced an alternative idea, the smart contract. This is an app that does exactly as it has been programmed to do without any third-party interference. An example of how it works might make its benefits clear. If, for instance, your business rents Segway MiniPro Smart Self Balancing Personal Transporters to customers from a downtown store, you can use a smart contract to permit your customers to unlock a machine by opening a smart lock only after you and your customers have agreed on the terms of the rental contract.
2. You can use it to pay your remote employees: There is no reason why you can’t use cryptocurrency to compensate your remote employees; this is particularly useful if they are international workers. Without the need to pay for banking fees for foreign exchange transaction, you’ll be able to pay your employees well while saving your business money that would have otherwise have gone to the bank or other middlemen. However, this is not a pie-in-the-sky idea. It is already being done. There is already a company, called Bitwage, that uses a Bitcoin-based service to manage payroll. Besides the savings in fees associated with international money transfers, you will also save time, as the money will not have to go from your business bank account to your employee’s bank account. Since the transaction occurs on a public ledger, all parties can see the whereabouts of the money throughout the process.
3. You can use it to track movement through a supply chain: Whenever you buy something, you don’t buy it from a single business, but from a chain of businesses, which includes wholesalers, distributors, and retailers. Using blockchain technology, the retailer no longer has to bear the brunt if things go wrong with the quality of the end product or have to take the blame for price gouging. Each aspect of the product’s development is digitally tracked so that the value-added steps can be seen. How does this help you? If, for example, you have an eCommerce business, you could offer your customers the convenience of a payment-upon-delivery service.
The future of blockchain is going to continue to grow because it has solved most of the problems associated with a centralized banking system.