What is Blockchain Technology & How Will it Impact Businesses?
The internet, smartphones, and other online technologies have helped businesses streamline their supply chains and inventories. However, human error, software incompatibilities between vendors and a lack of transparency can cause even the most efficient operations to experience time-consuming and costly errors.
Online cryptocurrencies like bitcoin depend on a technology called blockchain that can instantly share, secure, verify, and store records simultaneously. As a result, many businesses are using blockchain systems to implement efficient and secure recordkeeping systems.
What is Blockchain and How Does it Work?
Blockchain is a new type of shared, encrypted recordkeeping system that can be seen in real time by everyone involved in a supply chain or other business operation. These systems work by recording a separate record, or “block,” every time a process is updated.
Essentially, each block in the system serves as a digital puzzle piece that verifies the next record, creating a digital chain. Each block is encrypted and can’t be changed, since altering any information in the record would be like taking a piece out of a finished puzzle and trying to change its shape.
Advantages of Blockchain
Because each stakeholder in an operation keeps a separate copy of blockchain records, the system allows for a large amount of transparency and communication. Businesses can also customize how users see information in a blockchain system. For example, an online retailer could let a customer view their orders and shipping statuses, but not their full inventory system.
Blockchain technology can give businesses an instant picture of both large and small-scale operations, such as a single product’s location or real-time sales figures. And since records can’t be altered or viewed without permission, they’re extremely safe from cyber attacks and data breaches.
Here are some of the potential benefits of a blockchain management system:
Flexible Scalability — A business can use a blockchain system internally to track projects or other workflows, or multiple organizations can share the platform to organize large-scale operations.
Security — Records that use blockchain are encrypted, verified, and shared between all users. As a result, blockchain is very secure against tampering and cyber attacks.
Transparency — Advanced sensors and other tracking technology can update blockchain records to give businesses an ongoing view of a supply chain without fear of human error or biased reporting.
Innovation — New services are beginning to automate complex systems like contractual obligations, employee security credentials, and personal data protection using blockchain technology.
Detailed Analytics — Businesses can track individual products to gather important information at any time, such as the origin of a dysfunctional product or a food item’s expiration date.