Benefits Of Blockchain Technology For Companies

Several applications are eyeing blockchain technology, whether to increase the privacy of transactions or to carry out security checks, so find out about some benefits for companies.

Many large companies are eyeing this new technology. Even Visa, which sees Bitcoin as a competitor, already considers blockchain, so this technology already has its “place in the sun” in the coming years of technological development in the world, with 2019 being one of the years in which the highlight will be huge.

With that in mind, several companies may be wondering what blockchain’s benefits are being discussed so much, so we answer that question for you.

Benefits Of Blockchain

The first benefit could not come from an explanation, which could be evident to some but not to a good portion of the world’s population because the topic is new.

Blockchain is the technology behind a  cryptocurrency or a token. Of course, there are so-called DLTs, which try to call themselves blockchain to sell their wares but are nothing more than a distributed database.

Difference Between Token And Cryptocurrencies

Difference between Token and Cryptocurrencies. To understand this, we must have the concept of cryptography in mind. With all this clarified, it will be easier to understand the difference between tokens and cryptocurrencies.

Cryptocurrencies are digital (or virtual) currencies that use cryptography for transaction security. Mathematics performs the most critical ballast, ensuring the efficiency of networks, through mining processes and nodes, with the internet as the most critical infrastructure and global reach. The borders are the same as those of the internet; that is, they can be used for international financial remittances to local transactions. Most of them have a decentralized characteristic: all the technology belongs to the network users. Some are centralized and owned by companies or even banks.

Most use blockchain (blockchain), which works as an accounting book recording all transactions; some others do not use blockchain, such as IOTA. Cryptocurrencies have several characteristics peculiar to each project; common among them is the cryptography they use to secure their transactions, which is a new stage in developing new economies, services and products—examples of cryptocurrencies: are Bitcoin, Dash, Iota, Nano, among others.

It is soon realized that the difference between tokens and cryptocurrencies exists, even though cryptography is standard. It should be noted that several different cryptocurrencies are available for cryptocurrencies and tokens. Therefore, to know how the coin system or even the token works, it is essential to understand what each cryptocurrency does and the best ones available. 

With that, the first benefit is the ability to instantly carry out transactions with cryptocurrencies through the blockchain, without intermediaries, far surpassing the capacity of traditional financial institutions.

To get an idea, a transfer via the bank that can take weeks to go from one country to another, with Bitcoin, using the appropriate network rate, takes just a few minutes.

A token, another possible use of the blockchain, allows companies to enclose any imaginable asset digitally. The process has been called tokenization.

Although the ICO ( Initial Coin Offering ) industry has gone through a sea of ​​frauds and scams, legitimate companies continue to raise funds through this decentralized crowdfunding model.

The factor of having the network itself managing, through its codified and secure structures, transactions of any kind mitigates any possibility of scams that used to happen, mainly due to the ability to create smart contracts and escrows, all of this on the blockchain.

Does It Make Sense To Think About Blockchain For My Company?

If you think about using blockchain in your company’s processes, a question must be asked: is it essential to use a blockchain because everyone is talking about it?

The short answer to that question is: no.

Another fundamental question concerns the immutability of data saved on the blockchain. The answer is that once data (information) is stored in the blockchain, it will always be there, so reflect on your business and see if blockchain is necessary for some process to be carried out.

Also Read: The Blockchain Is Finding Its Way Into The World Of Work