In the fast-paced world of modern business, technological innovations continue to redefine and impact the way enterprises operate. One such revolutionary technology, blockchain, is making waves across various industries, offering unprecedented transparency, security, and efficiency. While often associated with cryptocurrencies, the impact of blockchain technology extends far beyond, profoundly influencing the landscape for small businesses.

What is a blockchain?

A blockchain is a decentralized and distributed digital ledger that records transactions across a network of computers in a secured and transparent manner. Each block in the chain contains a cryptographic hash of the previous block, creating a secured and immutable chain of transaction history. The blocks in a blockchain are linked through encryption, which means that it cannot be altered unless the blocks before are changed. Blockchain technology is the foundation of cryptocurrencies like Bitcoin and has applications in various industries, providing a tamper-resistant and transparent way to record and verify transactions. In landscapes outside of cryptocurrencies, blockchain technology is typically used to record and secure payment transactions and other electric records.

Why is it useful for small businesses?

Network Security
The information in a blockchain is particularly resistant against unauthorized access because it is communicated in a decentralized manner, meaning that there is no centralized authority/source prone to cyber-attacks. Once a blockchain travels across a blockchain network, information in the ledger is safely secured in all the computers in the network. This means that all authorized users can add information to the blockchain/database without the worry of it becoming compromised. Furthermore, blockchains hold an immutable chain of transaction history, meaning that it cannot be altered or changed unless the subsequent block is altered. Small businesses are often the subject of cyber-attacks as they are perceived to have fewer dedicated resources to cyber security, so implementing blockchain technology can ensure that information is encrypted and secure.

Building Customer Trust and Protecting Intellectual Property
Small businesses can choose to make blockchains public so that anybody can have access to the transaction history of a firm. Doing so provides transparency to consumers and assures the transparency of their business operations. Non-profit organizations may choose to do this so donators understand where their money is going. Furthermore, public blockchains can be used to show proof of ownership and intellectual property rights to reduce the risk of unauthorized use and infringement.

Supply Chain Management
Similar to how the blockchain provides transparency with financial transactions, it can provide a transparent and traceable history of the supply chain. From raw material sourcing to product delivery, blockchain enables real-time tracking, authentication, and validation of each step in the supply chain. This reduces organizational silos or cross-functional miscommunication because all authorized users are receiving real-time updates of what is occurring in the supply chain and enhances its overall reliability.

Overall, blockchain technology is one of society’s greatest efforts towards innovation, providing security, transparency, and efficiency that all small businesses need, especially when attempting to penetrate the market.