The world is experiencing a significant economic slowdown, record-high inflation, major layoffs, and stock-market collapses. Meanwhile, the apparent knight in shining armor, cryptocurrency, also failed to be the inflationary hedge many assumed it to be. Does this mean that the “blockchains” of the world hold no real value? Was the world’s fascination with “Web 3” a fad based on irrational reasoning?
The short answer is no. Blockchain allows a level of commerce that has never been seen before. Its potential is like that of the early internet, outsized and hard to quantify but certainly game-changing. Cryptocurrencies, NFTs, and smart contracts are mere applications of blockchains that have caught the attention of the masses. Meanwhile, enterprises and SMEs across industries are harnessing this technology to transform everything from business to supply-chains and communities. Most major companies in the West are either already using or actively exploring this general-purpose technology, from LVMH to Walmart, to unlock new possibilities. Some other meaningful applications include but are not limited to supply chain monitoring, secure sharing of medical data, royalty distribution, real estate processing, fractionalized ownership of varying degrees, memberships, and much more. The opportunities that this technology unlocks are limitless.
Evaluating if you can use a blockchain for your business is also extremely straightforward. All you have to do is consider if the following benefits will allow your business to generate greater profits in the long term.
- Costless Verification – Nothing is inherently costless or free, but a blockchain allows you to verify anything you decide for as close to zero as possible. There is just one cost, which is developing the technology itself. The verification would be costless because a blockchain is an immutable ledger that may use cryptography to keep your data secure and a bit of game theory to ensure that the desired result is always achieved. Due to a blockchain being a highly sophisticated immutable ledger, you can always verify any detail you please, and so can anyone, if you choose that. This renders the possibility of counterfeits nonexistent on the consumer side, which is what LVMH’s Aura Blockchain aims to do. You can also ensure that your suppliers are consistently meeting the standards you set, as Walmart attempted to do the same with their blockchain with the help of IBM’s Hyperledger fabric. This is the factor that allows you to improve your offerings primarily in the most simple sense. Consider how costless verification may affect your business. Is there any transaction across your value chain that requires verification?
- Costless Networking – On the other hand, this factor is set to transform economies and has to be seen with a long-term lens. This is because the cost of networking refers to “the ability to bootstrap and operate a marketplace without assigning control to a centralized intermediary,” as summarized by Christian Catilini, a leading MIT crypto-economist. And blockchains can minimize this cost. It ultimately enables a greater degree of ownership of your business and products. The idea is slightly harder to imagine because this change is one of the most profound ways the blockchain will affect global economies. In effect, no one organization can have total control over a product, leading to lesser market power and manipulation. Your business won’t depend on one intermediary, as ‘trust’ is replaced with cryptography and smart contracts. Thus, revolutionizing the way eCommerce has been facilitated. Crowdfunding is amongst the best examples of the same, as many companies have been able to bootstrap their company with the help of blockchains. This would be similar to how Kickstarter works, except smart contracts on a blockchain completely replace Kickstarter and the fee it would take. This is just one-way decentralization has been used as an advantage, and there are many more.
It is essential to remember that one should only integrate this technology to upgrade their customers’ experience. As the world is possibly heading towards a global recession, this is an excellent opportunity to build something of value based on the fundamentals described above. There are still some legal and social frictions surrounding adopting this new technology. Still, as the world comes to appreciate, and assimilate the technology waiting to explode, it is best to start integrating it for more long-term profitability. You are not alone in this journey; some exceptional services can help you develop your ideas and technology. You do not have to rebuild the wheel by any means, there are robust blockchain networks that you can build your blockchain on with ease.
What we’re sure about though is that being an early adopter will bring substantial benefits in the long run to not just your business but your way of doing business too. It just means the rest will be playing catch-up for a while.