Blockchain in Business | Debunking Myths and Misconceptions

Whether it is supply chain management, human resources, or any other sector, blockchain development services can positively impact multiple industries. However, blockchain in business has a slower adoption rate in industries.

One of the many reasons is the myths revolving around distributed technology and how that works. It threatens and prevents businesses from capitalizing on its far-reaching capabilities. So, let’s debunk a few misconceptions about blockchain first. Subsequently, we can find out the reasons signaling why you need it for your business.

Common Myths about Blockchain Technology

Myth: Blockchain can only help manage currencies

Blockchain has found its primary use cases in managing financial transactions. However, now many businesses are using blockchain solutions to expedite settlement processes, enhance cross-border payments, and make end-to-end, traceable supply chain processes. 

Whether it is about goods shipment or verification of credentials, blockchain solutions can significantly enhance the security and transparency of transactions. 

Additionally, employers can use it to verify a job applicant’s credentials. It validates the skill claims of the applicant. 

Myth: Blockchain drains energy while increasing costs 

It is true that mining via public blockchains can drive up costs. But, it is not true with permissioned blockchain solutions. 

Permissioned or private blockchain networks don’t require crypto mining. Instead, a group of trusted participants defines information validation rules across the network. As a result, it proves to be quite cost-effective and beneficial.

Myth: Blockchain is Bitcoin, and Bitcoin is blockchain

Blockchain operates as the underlying infrastructure for cryptocurrencies like ETH, and XLM. Additionally, it has many other applications across diverse enterprise operations, like insurance, healthcare, identity verification, and supply chain management. 

If you’re a business reluctant to adopt blockchain because of these misconceptions, consider connecting with our team for more clarity.

Also, Check | Blockchain Beyond Cryptocurrency: New Business Applications

So, now that we have debunked the myths around blockchain, let us find out why you need blockchain for your business.

Blockchain in Business

Blockchain moved beyond its applications in cryptocurrencies a long ago. Now, almost any industry involving data management, intermediaries, transactions, and more, can explore blockchain. 

In the following section, get answers to questions like why you need blockchain solutions for your business.

Dependence on Legacy Supply Chains

Blockchain can play a significant role in legacy supply chain processes. So, businesses dependent on legacy supply chains like pharmaceuticals, food, healthcare, or manufacturing, can use this technology.

Traceability

Existing supply chains are not traceable or transparent enough to satisfy consumer demands in these industries. It requires to have a traceability system that can detect anomalies and inefficiencies by fraudulent activities. For instance, introducing blockchain in the food supply chain can improve the traceability of food products from the farm to the table. 

Similarly, blockchain in healthcare can enable pharma companies as well as consumers to track the entire journey of medicines. It is because once a blockchain stores data, it becomes immutable. Further, it enables all stakeholders to have equal and easy access to information related to the provenance and state of products.

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Secure Transactions

Blockchain enhances fragmented supply chains by securing processes and transactions right from manufacturing and transportation to end-consumers. It does it in a way that makes every participant accountable for their responsibilities (as per the agreement) throughout the supply chain.

Enhanced Supplier Relationship through KYS (Know Your Supplier)

Stakeholders within a supply chain can onboard suppliers globally, as well as manage long-term relationships through an industry-wide platform. It is possible with blockchain smart contracts used to store and manage data related to supplier onboarding. It provides stakeholders with advantages like onboarding simplification, secure access to information, and enhanced reporting capabilities.

Explore More | Supply Chain Development with Blockchain in 2023

Managing Stringent Regulations

Almost every industry faces challenges occurring from increased pressure from regulators and governing bodies. Blockchain technology provides regulators with the traceability required to obtain higher levels of assurance concerning products’ entire supply chain.

Slow Business Transaction Speed 

Transactions for contract execution, like asset ownership and transfer occurring through business networks, are slow, inefficient, costly, and vulnerable to manipulation. Every participant in the business network uses their ledger to maintain business records. 

It gives rise to discrepancies and duplication in transactions, resulting in disagreements, disputes, increased settlement times, and dependency on intermediaries with associated overheads. The use of a blockchain-powered ledger across the business network can help it to reduce overheads while lowering risks.

Blockchain provides a consolidated, consistent dataset with reduced errors, and near-real-time reference data using consensus mechanisms. Also, no single participant owns the ledger or the source of origin for the information stored on it. It leads to enhanced trust and integrity in the flow of transaction information among participants. 

Furthermore, attributes like immutability and transparency lead to cost-effective auditing and regulatory compliance practices. So, executing business contracts like ownership transfers or making payments with blockchain makes them smart, automated, and final. It benefits businesses with increased speed of transactions, lowered costs, and timely settlements of contracts.

Check It Out | Top Blockchain Use Cases in Finance

Conclusion

There are more reasons for a business to invest in blockchain solutions and introduce the technology within its ecosystems. To name a few, it can strengthen the security of data storage and exchange, enhance identity management, establish trust and transparency among consumers, and more.

Apart from businesses involving complex supply chains and slow contract execution, other enterprises can also explore blockchain development services. They can avail of these services to boost business productivity and performance by investing in the right blockchain use case. 

If you want to develop a blockchain-based project, then connect with our blockchain developers today.