In this article, we will share the essence of blockchain operation in three paragraphs. You will learn why companies are implementing blockchain in their processes. You will read about several successful cases. We will ponder whether we need cryptocurrency if there is blockchain. We will also try to understand why we should implement blockchain in our company in the next 3 years.
What is blockchain and what is it for?
To put it simply, blockchain technology can be described as storage, a diary, or a data table containing information about all deals, that is, transactions.
Each transaction generates a hash, record of its completion. Copies of all hashes (transaction records) are distributed and stored on computers that participate in this process. Groups of computers in this chain form nodes. If most nodes (or computers) say the transaction is valid, it is written into a block.
Each such block refers to the previous block, and together they form a blockchain. This is blockchain technology.
Blockchain is efficient because it is distributed across many computers, and each of the computers stores a copy of the blockchain.
The fact that blockchain is a decentralized way of storing and accessing data makes the entire system incredibly secure because, unlike a centralized database, there is no single point of entry for hackers.
This makes it especially useful for securely recording transactions. At the same time, however, there can be no centralized control in blockchain technology.
Why are companies implementing blockchain in their processes?
Companies can use blockchain to easily, accurately, and securely exchange data across complex supply chains. Blockchain can provide an immutable, permanent digital record of materials, parts, and products, thereby promoting end-to-end visibility and providing a single source of truth for all participants.
Examples of using blockchain in production:
o Improved tracking and traceability
o Efficient procurement of products
o Better payment process
o Effective inventory management
o Increased customer engagement
o Increased data security
o Automated payments to suppliers
o Security of supply
o Blockchain for manufacturing
Here are some examples from real companies
Samsung Electronics has created a distributed ledger system for tracking international shipments and aims to reduce shipping costs by 20%. According to a Bloomberg report, the blockchain-based system is expected to allow the company cut overhead costs such as costly shipping documents and enable it to respond more quickly to market movements.
The US Navy Department used blockchain to manage its 3D printers.
Maersk, the world’s largest container shipping company, uses blockchain technology to exchange event data and handle workflow across manufacturing supply chains.
Bank of America Corp. and Mastercard, Inc. switched to the implementation of blockchain technology and have more than 48 patents and applications related to blockchain.
Do we need cryptocurrency if there is blockchain?
Let’s begin by outlining the difference between these two terms. Blockchain is the technology behind Bitcoin and was developed specifically for Bitcoin. Thus, Bitcoin was the first example of a functioning blockchain, and without blockchain, there would be no Bitcoin. This is why these two names are so often used interchangeably.
Key points to understand:
- Bitcoin promotes anonymity, while blockchain promotes transparency. For use in certain sectors (especially banking), blockchain must comply with strict Know Your Customer guidelines.
- Bitcoin transfers currency between users, and blockchain can be used to transfer all kinds of things, including information or property rights.
Bitcoin as a decentralized peer-to-peer payment system allows faster payments while maintaining anonymity. Moreover, there is no way for a third party (bank or government) to interfere in the process. The introduction of bitcoin and other cryptocurrencies for receiving and sending payments significantly saves the budgets of companies on the commissions that large companies such as Visa and Mastercard charge for each transaction.
If you are wondering which cryptocurrency to choose for its implementation in payments in your business, it is best to choose the most popular ones. For example, Ethereum or Bitcoin. These are more reliable and stable in their development. But if the choice is too large for you, don’t be afraid to start with just the one, and the Cratos crypto exchange will keep it safe as well as provide comfortable conditions for exchanging the selected currency.
What is the future?
Nowadays, cryptocurrency and blockchain technologies are developing hand in hand. For example, processing cross-border payments is one of the most promising and discussed uses of blockchain technology.
The future of blockchain technology and cryptocurrency is to provide a lightning-fast and low-cost alternative to established cross-border payment methods for all types of businesses.
The introduction of bitcoin and other cryptocurrencies into payment processes will help companies speed up payment processing and reduce transaction costs to below one percent.
However, the development and implementation of blockchain and cryptocurrency will face increasing regulation of their use. Undoubtedly, new types of regulatory bodies will appear around the world. This will create a complex new network surrounding blockchain security management.
In any case, we recommend that you pay more attention to both blockchain and cryptocurrency. There is no doubt that these two technologies are the future of many businesses and companies worldwide.