How are smart contracts and blockchain adding value to my business?
Whether you are a young entrepreneur or someone who has run a business for years, you certainly have come across obligations or procedures that take a lot of your time and effort. We have just two words for you – Blockchain technology.
The blockchain technology has the potential to solve some very basic business problems and can change the way you run your business by saving you time, guarantee your safety and transparency, reducing costs and the risk of fraud.
A smart contract is a computer protocol intended to digitally facilitate, verify, or enforce the negotiation or performance of a contract. Smart contracts allow the performance of credible transactions by completely eliminating third parties (middleman) or any rent-seeking the third party.
Here are some problems Blockchain can solve to improve your business:
Instead of queuing for hours in the bank just to send money for a fine, tax, fee or purchase you can do the transferring through blockchain applications. Regardless of the amounts, the process is easier, reduces the transaction cost significantly and is a secure alternative to traditional bank transfers. This is especially true if you are transferring funds overseas.
Let’s say you have to purchase goods for the sum of 100 000,00 USD. Making a transaction via a bank will cost 1,5% of the amount (1 500 USD), 4 business days and 30 minutes in the bank. Now if you make a transaction of the same amount through a blockchain-based application, the commission of 0,0001% saves you 1 499.90 USD.
- Paying Employees
Blockchain is best known for cryptocurrency, so it is completely natural to be used as a method of payment. Instead of transferring wages through banks, it can be used as a Bitcoin-based payroll service to reduce the time it takes for such funds to move from bank to bank. Payments made via Bitcoin can save both money and time for both employers and employees.
- Supply Chain
Owing to the blockchain and special devices, entrepreneurs and clients can know track the goods, know in which condition they are stored and when will they arrive. That makes it easier to confirm the origin of the product, which builds trust between seller and buyer and declines the risk of fraud.
Furthermore, every product is traceable and it can be maintained a record of the supply chain management so if a product is lost midway it can be found again. If you want to know more about the supply chain, you can read our article “Blockchain in Supply chain”
- Smart contracts
Using smart contract allows you to sell, exchange shares, money, documents without the use of intermediary services such as brokers, notaries, agents, etc to make a transaction which saves you time and costs. Smart contracts can also help solve the mistrust issue between business partners by writing in the code If – Then statements (conditions) so that the algorithm first checks if everything is fulfilled to define action.
Furthermore, every smart contract you make is transparent which gives you extra trustworthiness.
The benefit of using smart contracts and blockchain technology for businesses come in the form of speed, cost, safety, and precision. Smart contracts are one of the applications of blockchain that can vastly help companies in securing deals and helping run more full-fledged businesses.