7 Blockchain Integrations for Small Business
Large companies and corporations are actively introducing blockchain in their business processes. According to Blockdata, 81 of 100 public companies use this technology worldwide. However, small business is still skeptical of Blockchain and is reluctant to integrate it.
Some believe that blockchain can be applied only to large-scale projects and by companies that are ready to invest much money. In fact, it is far from that. The technology has a wide range of integrations for small businesses and startups. I suggest talking about seven ways to integrate blockchain in small businesses.
According to Deloitte, 86% of respondents are convinced that Blockchain is worth being implemented into businesses to optimize and automate some processes. Therefore, investment in Blockchain solutions only goes up.
The size, segment, or specialization of a company does not matter. Blockchain can be applied both in large corporations and small businesses. The question is what processes it will be responsible for.
Blockchain features ensure an impressive choice of functions it will carry out. I will describe seven of them.
The most well-known blockchain integration is the possibility to transfer funds securely and at a low cost. Thus, one transaction on Solana blockchain will cost $0.00025 and be processed fast enough (an average number of transfers per second is about 4300 TPS). However, not every blockchain acts like that. I recommend going into details before integrating the technology into your business.
Blockchain is inextricably linked to cryptocurrency, therefore using it for money transactions seems evident.
What are the benefits for small businesses?
Primarily, Blockchain is decentralized. It eliminates the need to transfer funds between the banks. A transaction is supported directly between a sender and a recipient. No bank institutions that act as a go-between make the transaction fee lower and transfers instant.
It is not so essential if you work within a country, but is crucial if you operate on the international market. Especially if you have foreign employees. Blockchain can help save time and money.
Secondly, the nature of the technology can make payment transfers more secure. Blockchain is a continuous chain of digital blocks, each carrying records of all transactions. It hampers the falsification of data of one record since it is directly linked to previous and following blocks. Any discrepancy in the transaction history will affect the whole ledger.
The use of the public ledger allows everyone to see transactions and balances. The possibility of system fraud is thus reduced.
Gift cards and loyalty programs
Gift cards and loyalty programs are simple and efficient methods to boost sales, strengthen relations with regular customers, and engage new customers.
These cards and programs help small businesses beat competitors, make your brand more attractive, and enlarge the potential of digital payments.
Blockchain can be used to issue gift cards and administer loyalty programs for your business. For instance, use Public Ledger to simplify the exchange and repayment of gist cards.
Moreover, with blockchain, a customer can use both a gift card and a voucher for transactions and payment for goods, since all digital assets in blockchain work by the same standards.
You may wonder why we need blockchain when there are programs providing cloud storage for an additional fee. The thing is they are centralized. It means providers practically control your files.
Another problem is that numerous business owners pay considerable sums for storage they do not fully use, resulting in money loss.
In this case, blockchain storage may become an ideal solution. Data is stored in a decentralized network, that uses spare space on hard drives around the globe.
Decentralized storage is less vulnerable to hacking than cloud systems. When uploaded, a file is encrypted with a key available only to the user. The file is then divided into fragments and distributed on the network. When downloaded, the file is collected from various knots and decrypted.
The process may seem to take up much time. In fact, it takes seconds. Moreover, when problems with servers in a centralized cloud service occur, data security is at issue. In a decentralized system, errors in several knots do not affect the network in general.
Security is a top priority for small businesses. According to Hiscox Cyber Report:
- 48% of companies faced cyberattacks at least once;
- every fifth organization that survived a cyberattack was close to bankruptcy as a result of it;
- 55% of businesses see cyberspace as a high-risk field after cyberattacks.
Blockchain does not fully guarantee security, however, it can minimize the risks of hacks. Monitoring and management of digital identification make the system more secure.
For instance, instead of common passwords, you can use blockchain-based authentication systems that require digital signatures. They are based on cryptography with a Public key.
The only way to confirm your identity is to use the correct Private key.
Internet of things (IoT) is a generalized term for the technology that allows one device to “communicate” with another.
The IoT industry has developed to the point where it brings a new benchmark for all smart devices. How can blockchain be applied here?
Let’s take the IoTeX company, a company that sells security cameras, as an example. The business uses blockchain to connect data with dApps. Simply put, the company uses IoT technology for automated photo and video recording.
Data is stored on the blockchain, without space being taken up on cloud storage. An owner requires a Private key to get access to photos.
Smart contracts are digital contracts that are stored on the blockchain and are automatically processed if predefined conditions are fulfilled. They eliminated the invasion of third parties and intermediates into the process of verification of fulfillment of the agreement by all parties.
Smart contracts can greatly accelerate and simplify workflow, reduce expenses on third-party legal services, and guarantee compliance with all clauses of the agreement.
The algorithm of smart contracts performs specified actions, e.g., money transfers, when certain conditions are met.
How does it work for the business? Let’s look at a simple example. Assuming that a new customer is not sure that you will send a good when the full amount is transferred and asks for Payment by installments. You have to refuse since you do not process shipment against cash on delivery or are afraid that a customer may collect the purchase without a surcharge.
Here comes a smart contract to help you. A customer sends the full amount to a special account, you get a notification about it, and you send the good. When the customer collects the order, you get a notification that the funds were credited from the special account to your personal.
Customer experience and interaction
Today, customer experience is a competitive element. All interactions between a company and a consumer must be enhanced since they affect the general image of your brand. Blockchain technology can be used to achieve a positive customer experience.
Why and how will it work?
Firstly, this technology guarantees transparency, thus directly affecting customer trust. It is trust that increases loyalty to a company and enhances customer interaction with a brand.
Secondly, blockchain ensures the security and confidentiality of customer personal data, since all processes and transactions and encrypted.
This is not the complete list of blockchain use options for small businesses. And, please, keep in mind that the examples I offered here will not suit everyone. Do not forget that this technology is “one of many”. You must know your goals to implement it effectively.
Blockchain can grant you opportunities for the optimization of business processes. And if, after a detailed investigation, you do not see how to apply this technology to your company, do not introduce a trendy technology simply because everyone does it.
Nevertheless, I would keep the blockchain in mind. This field is actively developing. Follow the updates to grab your chance and bring your business to a new level.