Blockchain has the potential to help your small business compete with much larger chains. At first, this technology may sound new and unproven. As a business owner, you may be unwilling to commit your limited budget into something so experimental. But you may be forgoing the best opportunity you will ever have to save money and expand your business exponentially. For the uninitiated, the blockchain is a decentralized peer-to-peer public ledger of transactions. We will break down this definition into its parts, starting with:
Peer-to-peer (P2P) is when a transaction occurs between two either two individuals, two business, or a business and individual, directly. For example, when a customer goes to purchase a product from a store, the transaction of money from the customer’s account to the business happens instantly without a bank approving the sale. But how could there be assurances that a one party does not engage in fraudulent behavior against the other party if there is no bank, or government, acting the mediator?
This brings us to the public ledger portion of our definition. With the blockchain, there is an automatic public ledger. The public ledger organizes into a long chain of blocks of information. When a buyer and a seller engages in a transaction, the blockchain verifies the authenticity of their accounts. This is done by using the public ledger and by checking if the funds are available proceeds with the transactions. However, if the funds are either not available in the buyer’s account or are promised to another party, then the sale is prevented effectively making double buying impossible. But where do they keep the public ledger?
This brings us the concept of decentralization. Instead of the public ledger being maintained and monitored by a central authority, like banks or governments, the public ledger is stored on the personal computers or electronic devices of the individuals and businesses who use the blockchain. In other words, to use the blockchain, you must donate to the collective. This way, the need for a central authority erases as every member of the blockchain has access to the ledger. Further, the ledger itself cannot be falsified. If one individual tampers with their ledger, the blockchain will verify their ledger against the other ledgers owned by the rest of the community and will reject quickly.
The benefit of the blockchain for small business owners is apparent. Without a centralized authority needed, transactions will happen quicker. Additionally, fraud will become a rarity. While the blockchain might seem daunting, it is straightforward. Take time to look into how you can utilize the blockchain for your business. That way, you can grow your dream bigger than you ever thought possible.