What is a Blockchain and Will it Affect Your Business?
August 28th, 2019
Okay…so wait, what is blockchain? Turns out this is a hard term to define in layman’s terms but bear with us as we try!
“A blockchain is, in the simplest of terms, a time-stamped series of immutable records of data that is managed by a cluster of computers not owned by any single entity. Each of these blocks of data (i.e. block) are secured and bound to each other using cryptographic principles (i.e. chain).” – www.blockgeeks.com
Confused? Same. Let’s try utilizing the Block Geeks example: “Think of a railway company. We buy tickets on an app or the web. The credit card company takes a cut for processing the transaction. With blockchain, not only can the railway operator save on credit card processing fees, it can move the entire ticketing process to the blockchain. The two parties in the transaction are the railway company and the passenger. The ticket is a block, which will be added to a ticket blockchain. Just as a monetary transaction on blockchain is a unique, independently verifiable and unfalsifiable record (like Bitcoin), so can your ticket be. Incidentally, the final ticket blockchain is also a record of all transactions for, say, a certain train route, or even the entire train network, comprising every ticket ever sold, every journey ever taken.”
So why and how is this relevant to small business management? Well, the biggest caveat here is that blockchain is free. It removes the process of charging a fee for transaction- rendering its useful to cash-strapped small businesses.
Essentially, you could charge for any amount, for any product or service, without the need for a middle-man or a third party. This is monumentally disruptive to many common business models we see today (i.e. Uber, Airbnb, TurboTax, Amazon, etc).
In theory, blockchain would affect how the stock exchange works and would eliminate the need for banks and other financial institutions, which will affect how everyone does business.
The short answer to our original question is yes, it’s likely that in a future financial setting blockchain will affect your business. Either as a buyer or a vendor, the transactional fee elimination will hold some affect on your bottom line.
When will we start to see those affects? That part we are less sure about- while it grows in popularity of concept and infiltrates widely into tech circles and businesses, the common business owner is not yet going to see blockchain on the radar.
As a growing trend and powerful influencer, tech concepts like blockchain shouldn’t be ignored. It’s a great time to do your research, read up on the ideas and familiarize yourself as best you can.