Whether you’re a crypto enthusiast or a casual digital currency observer, chances are you’ve heard the term blockchain. If you’re the former, you likely understand how the technology works. Should you fall under the latter category, the concept’s probably still a little hazy for you to grasp. For the sake of clarity, let’s discuss what blockchain is.
Blockchain is a peer-to-peer distributed ledger secured by cryptography. Its emergence coincided with the introduction of Bitcoin in 2009. Bitcoin is credited as the pioneering blockchain technology, which paved the way for the rise of other blockchain platforms.
Blockchain is a series of data batches referred to as blocks. These blocks form an unbroken chain by way of a hashing function. Since the blockchain has no single owner, all stakeholders assume the responsibility of upholding its integrity. It is a revolutionary technology that boasts a myriad of benefits for businesses.
Blockchain has amassed considerable popularity due to several reasons. Here are some of them.
- Distributed vs Centralized – The database does not rely on a single authority. It operates under a so-called distributed consensus. What that means is all parties involved in the system have a say on the legitimacy of transactions.
- Unique Transactions – Every transaction recorded in the blockchain is one of a kind. It cannot be duplicated. That cancels the possibility of inauthentic entries.
- Heightened Verification – Integral to the blockchain process is transaction verification. No unverified block can be added to the chain, hence the technology’s foolproof security.
- Immutability – There’s a reason why every block goes through strict verification before inclusion in a blockchain. That’s because once it’s there, it’s almost impossible to edit should inaccuracies be spotted.
- Security – This is what it all boils down to. Although public and distributed, blockchain platforms operate under stringent standards that it’s virtually tamperproof. That can only be great for businesses.
Business Suited to Blockchain Applications
With enough imagination, you could find a practical use for blockchain in whatever type of business you do. However, it is most suited to certain industries, such as the following.
- Healthcare – You could use the blockchain to store patient details, medical records, and diagnostics. These require the utmost data privacy, plus ease of entry and access.
- Insurance – Much like healthcare, this is another industry where data privacy is a top priority. As such, you can’t go wrong with blockchain as the digital hub for claims management and payment processing.
- Real Estate – A blockchain can host exclusive property listings, contracts, and details of transactions. It can also be used for funds transfer.
- Supply Chain – You can tap blockchain technology for growing customer loyalty and building reward programs. It’s also practical for inventory and contract management. Even product shipment can make use of blockchain. And most obviously, payment processing aligns well with the system.
This list is by no means exhaustive. In fact, it barely scratches the surface of blockchain business possibilities. Consider blockchain a versatile technology. You could fashion it into a system that can specifically cater to your unique startup.
6 Things to Do When Starting a Blockchain Business
Before pursuing a blockchain startup, first, make sure you got the following covered.
- Brush up on tech skills
You must be tech-savvy to engage in a crypto-adjacent business. That is if you want to maximize the technology’s potential without heavily relying on outsourced IT experts.
- Find the best framework
There are many routes you could take in this regard. You could use an existing blockchain application, rely on an established platform and build a supplemental app, or design your own blockchain protocol and application from the ground up. Whichever path you choose, make sure that’s what your startup needs.
- Know the costs
When building your own blockchain protocol or app, you’ll spend on computers and internet bandwidth. Once your system’s up and running, there are labor and liability insurance costs, among other expenditures.
- Attract VC firms
Speaking of expenses, know how to convince venture capital (VC) firms to get behind your project. That is especially crucial if you lack sufficient funds to greenlight the business yourself. You may reward VCs via an initial coin offering (ICO).
- Learn how to adapt
Blockchain is still an emerging technology that continues to evolve. Be ready to adapt to any changes while putting in place first-rate business security measures.
- Develop risk tolerance
There are a lot of risks to consider, from the impact of COVID on the IT industry to cryptocurrency’s speculative nature. It’s best to gauge the level of uncertainty you’re willing to face.
In recent years, pursuing a business has become easy. If you want to become your own boss, now is the best time to follow through with that inclination. Opportunities are everywhere. Technologies abound. Consider blockchain. Come up with a viable business idea and align it with technology you understand, and before you know it, you’ve hit the jackpot.
Contrary to popular belief, the benefits of blockchain technology are not exclusive to crypto enthusiasts who mine or invest in digital currencies. Blockchain has viable business potentials outside those categories. The key is to get creative and find ways to maximize the technology in service of whatever kind of startup you’ve built from scratch.