From banking to agriculture, insurance, automotive, and many more, blockchain application can further escalate all businesses. As a result, this technology is increasingly considered one of the top effective solutions for dealing with industries challenges and improve speed, efficiency, transparency, and security of processes.
Let’s start with a quick definition: blockchain is a decentralized network, which stores encrypted records and where any changes must be approved by the majority of computers. The transparency and data protection provided by the technology prompted companies throughout the world to turn to blockchain development services to redesign their operations. As a result, the amount of spending on blockchain solutions worldwide is expected to reach $19 billion by 2024.
However, as with any other new technology, many challenges can arise when an organization start to implement blockchain. Therefore, many companies choose to partner with blockchain development services provider to mitigate the risks. Here’s more about the potential benefits as well as potential risks of blockchain adoption.
How Can Blockchain Technology Be Beneficial?
Many professional sectors can leverage the advantages of blockchain development services, leading to significant transformations in their organizations. Let’s take a closer look at some of them.
Online threats have increased by six times their usual level since the pandemic began. This increasingly escalating number of cyber-attacks poses a significant risk for large enterprises and small-to-medium-sized businesses. Blockchain technology grants end-to-end encryption of data records. Moreover, the information is decentralized – stored within a network of computers – that helps prevent fraudulent and unauthorized operations.
Use case: The banking industry is one of many others that can benefit from blockchain bolstered security. For instance, J.P. Morgan uses blockchain technology to securely conduct transactions globally and reduce the number of rejected or returned transactions.
Transparency And Traceability
The foundation of blockchain’s distributed ledger ensures that all information is identically recorded in different locations. Thus, authorized participants of the network can see the same data at the same time. Moreover, date and time stamps provide visibility on the records’ history, shedding light on every step of the product or transaction’s journey.
Use case: The transparency of blockchain can help to streamline the voting process. Immutable records powered by blockchain technology have the potential to improve the audit and recounting of voting results. It can also trace the vote to confirm that it is included in the final tally.
Supply chain management is another example of processes that can benefit from blockchain. For example, the distributed ledger can offer insights into the food supply chain and products’ journey from field to table. PharmaLedger, on the other hand, leverages blockchain technology to track and trace medications and fight counterfeit drugs.
Blockchain-enabled smart contracts allow automatically proceed with a process once predetermined conditions were met. Thus, it minimises human involvement and eliminates the need for third parties to verify that a contract’s requirements were fulfilled.
Use case: Legal industry can conclude blockchain-based legal agreements and apply smart contracts to execute all or parts of an agreement without intermediaries to validate authenticity. Another example of smart contracts application is the insurance industry. When a customer provided all required documents to file a claim, it can be automatically paid.
Traditional operations are usually paper-based. Streamlining these processes with blockchain reduces time and eliminates human-based errors. Furthermore, storing all information within a digital ledger can significantly boost efficiency.
Use case: The aerospace industry, for instance, can leverage blockchain to store information about aircrafts’ parts. It can highly improve efficiency and decrease the overall time devoted to regular inspections and maintenance. blockchain development services
Understanding Risks Of Blockchain Adoption
Naturally, with all new technologies come new risks. It’s vital to know the potentially harmful implications that blockchain development services can have on companies. Here are some of the key risks that have emerged from blockchain adoption:
- Lack of standards – with many companies working on their own blockchain and a wide variety of blockchain frameworks, it’s hard to have standardization behind the technology. As a result, it leads to increased security and privacy risks.
- Transitioning complexity – existing business operations and policies have to undergo updates in order to coexist with blockchain. A company’s employees also need to receive training on how to operate within a new structure.
- Endpoint security – blockchain’s decentralization allows accessing data any place and time, making endpoint less secure. It can leave the door open for cybercriminals to steal data.
- Smart contracts – while offering greater trust and efficiency, smart contracts pose a possible threat of ceasing the one-to-one collaboration involved in the manual development of agreements, even if conducted digitally.
- Regulatory issues – blockchain still has to reach the approval of regulatory entities at the global and local levels. Blockchain-powered anonymity of participants and cross-border transaction are the most common reasons for regulatory delays of technology implementation.
Every new technology will have its advantages and disadvantages, and blockchain is no exception. It’s vital for companies to find a balance between both. A trusted blockchain development service provider will help your organization revamp your business and reduce risks posed by technology.
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