How SMEs Can Take Advantage Of The Blockchain

You may have read a lot about the blockchain lately . Perhaps you immediately relate this concept to bitcoin and other cryptocurrencies. However, there are aspects of this technology that are still unknown to most people. Actually, this is a powerful tool that companies, even SMEs , can take great advantage of.

The following sections contain important information related to the blockchain . We tell you what exactly a blockchain is and what it is for. In addition, we will talk about how this technology can be used to increase the competitiveness of SMEs . You will find everything you need to know about blockchain applied to the business world here.

What Is The Blockchain And What Is It For?

The term blockchain translates in Spanish as chain of blocks . Essentially, it is a concept that allows you to keep a record of digital operations without the need for an intermediary. Of course, the modifications that follow from the changes are synchronized and distributed while remaining decentralized. In other words, it is an encrypted database distributed in different nodes that eliminates the need for a third party to manage the entire process, since the validity of the information is corroborated thanks to other users.

The characteristics of this technology are the following:

• Privacy . By definition, the operations carried out on the blockchain are private and are not disclosed to anyone.
• Transparency . Any user can access the records that have been included in each blockchain , so their use increases the transparency of the actions they carry out.
• Without intermediaries . As it is a technology that decentralizes digital operations , there is no need for a third party to control the entire process. It is the rest of the users who are in charge of verifying the authenticity of the operations.
• Encryption . All data is cryptographically protected and cannot be altered without permission. For this reason, we also say that it is a technology that makes stored information immutable.
• Although the blockchain is strongly related to cryptocurrencies , the truth is that it can be used in many fields. Bearing this in mind, we wanted to draw up a list of the most interesting initiatives to take advantage of this technology in the field of SMEs . But, first of all, let us talk about ICO , a different way of obtaining financing.

ICO, A New Mode Of Financing With Blockchain

ICO stands for initial coin offering . This is an action that is becoming more and more important in the business world and is an alternative way of obtaining financing . To understand it, we can compare the process to the issuance of shares by a company. However, with an ICO , the form of financing comes from tokens (chips) that are associated with a certain value of the company. For its part, it receives a payment in cryptocurrencies that it uses to finance its activities.

Leveraging this technology to obtain funds brings many benefits to SMEs . These coincide with the characteristics already mentioned in the previous section, namely, privacy, security and elimination of intermediaries.

Other Initiatives To Take Advantage Of Blockchain In SMEs

The ICO is the path that many companies have taken to finance their activities. But in the digital world posed by the blockchain , there are more opportunities to improve the competitiveness of SMEs . Do you want to meet them?

Improving The Customer Experience

The customer experience will be enhanced if the blockchain is given the right approach. For example, some companies allow their users to know the origin of the products they sell. In this way, the relationship between the producer and the customer is strengthened and the latter can fully track what he consumes. Always with the certainty that the data offered is real.

Smart Contracts

The digital world of the blockchain also makes things very easy when hiring . Agreements thanks to a blockchain are much more secure and reliable. In this way, the clauses that have been included in the contract are shared with two or more parties who, later, can verify the information. Likewise, it is possible to minimize the expenses associated with the management of the process , making it more efficient.

Enhanced Security

Security is the word that best defines a blockchain. Although nothing is impossible in this life, especially when it comes to the digital world, the data contained in a blockchain cannot be easily altered and is kept safe thanks to cryptographic encryption.

Avoiding The Middlemen

Savings and transactions become more profitable for SMEs thanks to the digital world . If we add to this the ability of the blockchain to eliminate intermediaries, the competitiveness of SMEs is reinforced. On the one hand, the use of this system reduces costs, which allows small and medium-sized companies to save more. Similarly, payments with digital currencies offer the opportunity to bypass payment gateways and other systems that require the presence of a third party.

Also Read: Backup And Disaster Recovery: Data Security Instead Of Data Loss!