Small business owners need to make sure they’re always staying on top of trends because they usually have a lot of competition. As such, it’s important to make sure that your company is always on the lookout for new ways to improve your business practices. One crucial area in which you can probably improve is to start accepting new forms of payment. A growing number of pioneering small businesses have begun to accept cryptocurrency: digital money that relies on blockchain technology to keep transactions safe and provide other benefits to users.
You’ve probably heard no end of talk about cryptocurrencies such as Bitcoin or Ethereum in the news lately, but you might not have a clear idea of how they really work. Furthermore, you may have certain doubts about whether these tokens represent a new evolutionary stage in money or are simply a flash in the proverbial technology-pan. Don’t worry: we’ll help clear things up for you. Read on and learn more about what potential blockchain may have to benefit small businesses like yours.
How Does Blockchain Work? Understanding the Basics
Blockchain technology debuted in 2008 when Satoshi Nakamoto—the alias of an individual (or individuals) of unknown identity—published a white paper detailing Bitcoin. Bitcoin was described as the world’s first “peer to peer electronic cash system”, and blockchain was revealed to be the technology upon which it was based.
Blockchain technology basically allows for the creation of secure digital records. It does this by creating copies of these records whenever they are updated and distributing the copies across numerous networked devices. This method of storing information makes it extremely easy to verify the validity of a transaction conducted with any blockchain technology. Essentially, nobody can fake the details of a transaction when many copies of the original exist in different locations.
Obviously, blockchain technology can provide increased security for retailers that move to start accepting cryptocurrencies as payment. While credit card information can be falsified with relative ease, it is next to impossible to conduct a fraudulent transaction with cryptocurrency. However, blockchain technology may have other uses for small businesses as well.
The key feature of blockchain that makes it so revolutionary is that it requires no external verification for transactions conducted between two parties. As such, it represents a viable way to help make interactions of many kinds more efficient, and save money for the companies that facilitate them. Examples of such interactions include the collection of healthcare or insurance information, the setup of supply chains, and even voting. If you run a small business that collects personal information of any kind directly from individuals, you may be able to use blockchain to streamline your services and reduce your expenses, making you more competitive in the long run.
Having a basic understanding of blockchain technology and its potential for use by SMEs can prepare your organization for the future and help you stay ahead of the curve. Whether you are thinking of taking payments in cryptos to increase your security and give your customers more options, or work in a sector where blockchain can help you run tighter and faster operations, you should learn all you can about this technology so that you can begin to incorporate it into your business plan.