Blockchain for Small Business

Should a small business be built on a blockchain platform?  The answer is:  Blockchain is not appropriate for every business. 

I own two businesses: One of them is a traditional small business and the second is an online business.  I am always looking for an advantage, and I keep hearing about blockchain technology and how revolutionary it is.  So I started asking myself, should my businesses be built on a blockchain platform?  Here is what I learned from doing my research.   ​

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​Why Is Blockchain Good For One Business But Not Another?

Let's start with a few reasons why a blockchain holds so much potential value for a business...
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1. Transparency in Transactions:    When a transaction is completed it becomes permanently recorded on a public ledger that is verifiable by all parties involved in the transaction.  This would be especially valuable for transactions that need high levels of trust and accountability.  
2. Reduce Cost:  One of the benefits of blockchain is that it can cut out middlemen and reduce costs.  For example, a business could use blockchain to keep track of inventory and shipping processes instead of having an employee do it.  This would help reduce expenses for a business. 
3. Transaction Fees and Settlement Time:  This  works especially well for international businesses.  Currently, businesses operating internationally have to send money through banks using a process known as Swift.  This Swift process usually costs about $25 per transaction and can take 3-5 days to complete.  Using cryptocurrency, which is layered into a blockchain, allows for internatioanl transactions to be done faster and with much lower fees.    
4. Security: Blockchain is secured through completing a complicated mathematical algorithm which is then verified through all the other users in the network.  This is known as consensus.  If any of the computers in the network are not able to verify this transaction it is rejected and the transaction is not completed.  
5. User Control:  One of the biggest advantages for a business using blockchain is that the user has much more control of the transaction than if they have to use large third-party entities.  For example, many times a credit card processing company has many rules, regulations, and fees that the company must follow.  If the company wants deviate from that process they are now at the mercy of the processing companies rules.  With blockchain, the company now has the ability to reshape how they do business without the constraints of an outside company.

Is Blockchain Right For Your Business?  Helpful Questions To Ask Yourself
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1. Does your business deal with a lot of sensitive customer information that needs to be openly shared but also kept private?  
2. Does your business have a supply chain that you would need to track products through each stage of the process?
3. Does your business have a lot of middlemen?
4. Does your company do international transactions?
5. Does your company make transactions that need to be verified by outside auditors?  
6. How much money do you have for investing in changing your infrastructure?
7. What problem would blockchain solve for your business? 
8. Is it worth the investment?

What kind of businesses would benefit from Blockchain?  

Hospitals, Doctors, Walk in Clinics:  Healthcare businesses who retain high amounts of confidential patient information such as medical records or credit card information would be good candidates for blockchain.  Blockchain could allow doctors to exchange patient information with other doctors, but also keep patient information private and secure on a blockchain ledger.

Warehouses and Storage Facilities:  Blockchain could add simplify the supply chain process and also reduce costs by cutting out middlemen.  Because no ledger transaction can be changed or altered, you could verify with trust that each step of the process has been adequately followed, while also eliminating the need for someone to manage each step of the process.  

Accountants, CPA’s, Auditors:  Having a companies transactions built on a blockchain would assure that there is less fraud or number manipulation.   Transactions can be continuously updated and verified without the threat of being altered or corrupted.
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Identity Services (Passports, Id’s, Licenses, Notary's):  Having personal information stored in a decentralized manner could help reduce the need for paper or plastic ID cards.  Using blockchain also accomplishes the same thing that a notary does when they sign and stamp a document for you.  It is basically a digital signature with a time stamp which is also registered in a secure blockchain ledger.  Therefore, if someone can be digitally verified there is not a need for the old way of tracking personal information. 
      
Banking / Financial Services:  Transacting money between two entities without the need for a central authority (like a bank) certainly could change the way your business is done.  You as a business owner become more in control of your transactions.     

Real Estate / Mortgage Services:  Blockchain could help cut middlemen, such as mortgage officers and real estate agents, out of the process.  In doing so, consumer costs and business expenses could be cut while also making the real estate transaction process more efficient.

If Your Business Would Benefit From Blockchain...What Should You Do Next?

I have not personally built a business on a blockchain platform (yet), so I interviewed a friend who is a  blockchain developer and asked for his thoughts.  Here is what He said...

"Currently it is quite expensive to build a business using blockchain.  So my first thought would be to make sure that you are using a blockchain to solve an actual problem facing your customers or your business.  However, if you believe blockchain is right for your business, the best thing to do is to find an experienced blockchain programmer who can accomplish your end goal.  Finding a programmer with blockchain experience is not cheap, or easy, but will be well worth it. 

Another alternative, if you are willing to invest some time, would be to hire an intern who is learning how to build blockchain.  Ask them to work on building a small sample project and continue to work your way toward the desired end result one step at a time.  This would be a much cheaper alternative but would probably take longer because of their inexperience.  One encouraging thing for a business owner to know is that there is a massive wave of people rushing to gain experience in coding, programming and cryptography." 

Also read: "Should You Consider A Job In Blockchain?"

Conclusion
When computers were first introduced into the business world most people could see the potential but it wasn't easy to implement into real world use.  However, as the industry matured it became impossible to do business without them.  Blockchain is the same way.  

If blockchain solves a specific problem that you currently face in your business, becoming an early adopter of this technology may give you a competitive advantage.  However, keep in mind that this technology is going to continue to mature.  As it does, it will probably become easier to implement and also become less expensive.  Each business has their own different needs, and those needs should dictate how aggressively this new technology is adopted.   

I wish you the best on your business endeavors! 

​Please leave comments or questions below.