Over the past few decades, emerging technologies have had a tremendous impact on small businesses. From mobile apps for employees in the field to retail websites that enable customer interaction 24/7, technological innovation has given small businesses a seat at the table of the economic marketplace.
In light of these trends, it’s become increasingly important for small business owners to keep up with the latest technologies and implement them to their business’ advantage. So what’s the current game changer you should be aware of?
Bitcoin and blockchain.
Many small business owners may not realize it yet, but Bitcoin and blockchain can give your business the competitive edge needed in a challenging and changing marketplace. Take a look at how you can use these emerging technologies to your advantage.
What is Bitcoin?
As with any new technology, you have to understand it to be able to implement it. Bitcoin is defined as a decentralized ledger system with a public immutable, record called a blockchain. Groups are rewarded for solving complex cryptographic problems with a bitcoin, which functions as a digital currency. Bitcoin transactions are made without any middlemen, and it’s not tied to any one country.
What is Blockchain?
Blockchain, on the other hand, is the technology behind Bitcoin and the thousands of other cryptocurrencies and tokens that have emerged since Bitcoin was hatched in October 2008. But over the past ten years, the tech world has found many applications for blockchain beyond Bitcoin. You can think of blockchain as an ever-growing public record that is cryptographically protected. So you can see the information and know it hasn’t been tampered with, but you need the keys to actually read it. There are many blockchains that have been and are being developed beyond bitcoin, with thousands of tokens that run on top of these blockchains. If you think of a blockchain as an operating system or currency, tokens are programs on that operating system, or specialized currencies within it. Some examples of live blockchains beyond bitcoin are ethereum, dash, litecoin, and monero. Each of these has some advantages in transaction costs, privacy or ability to handle transaction volume compared to bitcoin, but none are as popular.
So How Can They Be Leveraged For Your Small Business?
Bitcoin: A benefit of accepting Bitcoin as a form of payment in your small business is that for businesses looking to expand into the global market, Bitcoin offers relatively fast international payments with no middleman and no limitation on how much you can send.
Blockchain: As mentioned previously, the applications for blockchain technology have expanded far beyond Bitcoin and are continuing to grow every day. Other blockchains allow you to transfer funds directly and securely to almost anyone in the world and many do so at very low fees, some even lower than bitcoin. This is one of the first and therefore most well-known uses of blockchain technology, but it is certainly not the last.
Here are some of the other innovative ways that your small business can use blockchain technology to its advantage:
- Smart Contracts: with this aspect of blockchain technology, your small business can implement self-automated computer programs that carry about the terms of the agreement between buyer and seller, which is written directly into the code of the agreement. Smart contracts give business owners an option that is both low-cost and unbreakable.
- Raise Capital Globally: if you’re looking to take your fundraising from local to global, blockchain can be the way to go. (Note: As with any capital raise, consult legal and financial professionals before embarking on any projects.) Digital currencies give investors one more option to securely fund your business and make it possible for people around the world to provide funding.
- Supply Chain Authentication: from the food we eat to children’s toys, knowing where products were made and where they came from is becoming more and more important to today’s consumer. Blockchain can give your small business a boost in the farm-to-table and local food movement by tracking the supply chain and providing a digital trail to original sources and suppliers.
- Legal Agreements and Notary: by fully automating contracts, you’ll never have to wait again for the “sign, scan, and email back” delay. Additionally, notary services can be faster and easier to access through apps that notarize digitally.
- Streamline Employee Verification: if your small business can’t afford its own HR department, blockchain technology could be the solution. In the future, this technology could eliminate the background check and save business owners many hours of verifying information on a potential employee resume by performing these tasks automatically.
As with any new and exciting technology, small business owners should embrace innovation with some amount of caution. Bitcoin particularly is highly volatile and has no valuation guarantee. While it may not be the most practical currency today, it is certainly a form of currency that small business owners should have on their radar.
As with many emerging technologies, there are still many unknowns when it comes to cryptocurrency and its future in our financial market, overall, blockchain technology has proven to have many uses and applications in business and is potentially groundbreaking in some areas. As a small business owner in today's market, you'd be wise to explore how blockchain technology can propel your business into the future.