If you’re like most people, when you hear the word “blockchain” the first thing that comes to mind is probably Bitcoin or more broadly, cryptocurrency. And while Bitcoin has been the most visible and widely used example of blockchain technology thus far, the concept of blockchain has the potential to revolutionize the way SMBs do business moving forward.
But before we get into the details, let’s take a step back and understand what blockchain technology is and how it works. In essence, blockchain simply refers to a general system for decentralized, real-time record keeping. For any blockchain transaction, the idea is that there are copies of identical spreadsheets or ledgers stored on hundreds (or thousands) of computers around the world which are sent automatic, encrypted updates any time a verified transaction takes place. This means that before any single transaction is completed, it needs to be verified across the entire blockchain network. This prevents human errors and intentionally fraudulent transactions from ever going through. Let’s take a look at an explanation of how a Bitcoin transaction works, courtesy of TechAdvisory.org:
“In the Bitcoin ledger, each line represents the transfer of funds from one account to another. So, if John wants to transfer money to Jane, he sends a request to Bitcoin’s blockchain, and thousands of computers confirm his account information is correct, and he has sufficient funds. The money is transferred, both account balances are updated, and the whole process takes less than an hour with almost no human interaction. Much faster than the 5-7 business days of most banks.”
Because the transaction verification process occurs automatically between computers, the need for a middleman and the risk of human error is all but eliminated. Blockchain technology can begin to streamline processes and allow businesses of all sizes to compete on a more level playing field even if they have fewer financial resources than their enterprise counterparts.
If you’re interested in learning more about blockchain for small businesses or you have made the decision to begin investing in business intelligence solutions that can begin moving your company towards implementation of blockchain solutions, contact ATB. We’re excited to see how this next technology chapter unfolds for you!