In the UK alone, £40 million is lost due to fraudulent activity every year. In fact, 30% of businesses in the UK have reported some fraudulent activity within their supply chain at some point. In this new day and age of technology, one advancement that can help with these problems is blockchain, a decentralised peer-to-peer ledger that can encrypt and monitor data end-to-end. It is so secure that people are calling it a panacea to many security issues that businesses are facing today.
For most people, blockchain will be associated with the hyped bitcoin currency, which was built on the foundation of the blockchain.
Bitcoin is great for businesses because it helps many companies streamline some of their biggest issues, such as PCI compliance and securing transactions. In fact, businesses ranging from food retailers (Subway, for example) to online commerce platforms like eGifter, and even casinos have embraced using bitcoin to open up their markets for growth.
But many people are now considering blockchain to be an even better solution to a host of operational issues for businesses. There’s a reason why ninety percent of banks in America are investigating blockchain’s potential to help curb the fraudulent activity.
In most instances, fraudulent activity is carried out by some third party interfering with a business. But blockchain offers a host of security options that allow companies to manage data, store files and make payments online securely.
The most fundamental reason for implementing blockchain is that there are no middlemen involved in a transaction, so it leaves you less vulnerable to attacks if a business wants to deal directly with the client.
Because there is no central location where all of your data (including invoices) is held, it is theoretically impossible for a hacker to locate and interfere with one’s business. The data is held on computers located throughout the world, so it would take an enormous amount of computing power to corrupt that. This makes your business entirely decentralised. It’s as if a robber would never know the exact address of where you live.
More importantly, once your data enters the blockchain, it is immutable, so it cannot be altered, deleted or changed. Also, it’s important to note that, after it’s been entered, several people have to verify that a transaction has taken place on the blockchain. Once that transaction has been verified, it cannot be changed; however, if you did want to make a change, you could add another block to the chain with the same verification.
Another great thing about the blockchain is that you can make it permission-based for your business, which means that you can grant only a select few people access, if you want to. This means that you get to control who accesses your specific ledger. This creates a secure, private hub for your business.
Blockchain can effectively deal with corruption issues as well. By allowing everyone to monitor and verify records publicly, you will have a certain level of transparency in the company.
Another way to show off blockchain’s potential is by using smart contracts. Essentially, these are contracts with algorithmic rules programmed into them. You can use smart contracts for all sorts of situations, ranging from insurance policies to legal documents.
Take property management, for instance. If I am a landlord and I am renting out an apartment to you, I can create an electronic contract that automatically gives you access to the property, but only if specific criteria are met.
These are just a handful of reasons for why businesses should adopt blockchain. There are still concerns about the technology and its efficiency, but over the coming decades, you will see more and more industries adopting it to foolproof their business.