The unique characteristics of blockchain address several business issues and concerns. There are some incredibly great benefits blockchain offers for the enterprises. Let us discuss a few of the advantages of blockchain development for businesses.
The launch of Bitcoin in 2009 brought the theoretical blockchain into real-world use, manifesting that digitally distributed ledger technology called "blockchain" actually works. And, since then, businesses and organizations across the globe are testing blockchain and how it can work for their business.
Top brands, big companies, nonprofit organizations, and government agencies are employing blockchain for bringing about drastic improvement to their existing processes and facilitate new models of business. What makes blockchain so highly valuable for modern business is its innate ability to share data securely and instantly among entities - with no entity compelled to take the ownership of data and ensuring data safety or facilitating the financial transaction.
Blockchain offers several advantages to modern businesses - whether they opt for private and/or permissioned blockchain based network or go for a public blockchain network. To leverage the truest potential of blockchain, you may need the expert help and guidance of a trusted blockchain development company.
If we trust the experts, then the benefits that blockchain & its characteristics offer for enterprises include:
Building trust: Blockchain helps build trust between the participating entities where trust is still unproven or nonexistent altogether. Resultantly, these entities actively and happily take part in business dealings requiring financial transactions and/or sharing of critical data that could have been impossible otherwise or, even if done, it would have been done with some intermediary in between. Enabling trust, therefore, is a key benefit blockchain offers to enterprises.
The value of trust can be seen in early blockchain use-case that makes transactions easy among entities that never had a direct relationship with each other but still had to make payments and share data. In general, cryptocurrencies and bitcoins are quintessential and truest examples of how helps build trust between different participants with no personal relationship or acquaintance.
Decentralized structure: Blockchain can prove to be exceptionally valuable especially when there is no trust builder among all participants.Hence, while building trust in situations where participants don't trust each other since they don't know each other, blockchain facilitates data sharing within the businesses' ecosystem where there is no "single entity" completely in charge. The case of supply chain makes sense here as multiple businesses right from suppliers & vendors, producers, transportation companies, and distributors to retailers require or want information from other members in the chain. At the same time, one of these entities is responsible for facilitating sharing of information. Due to the decentralized nature, blockchain solves this dilemma once and for all.
Enhanced privacy and security: Blockchain powered systems are highly secure and this is another great benefit of this technology for enterprises. The improved security that blockchain offers stems from the actual functioning of the technology. Let me explain further. Blockchain works by creating an unalterable record of each transaction through end-to-end encryption. This completely shuts down unauthorized and fraudulent activity. In addition, blockchain data is stored across the network of computers which makes it virtually impossible for hackers (quite unlike traditional computer systems wherein data is stored together in servers) to sneak in or steal valuable data. In addition to this, blockchain is capable of addressing privacy concerns in a much better way than traditional computers by making data anonymous and requiring authorized access and permission to limit access.
Reduced costs: The nature of blockchain can help organizations drastically reduce costs. It works by creating efficiencies in transaction processing. Blockchain also minimizes manual tasks like amending and aggregating data, and easing auditing &reporting processes. Also, financial institutions end up saving more when they have blockchain in place, indicating that the ability of blockchain in streamlining settlement and clearing directly translate into cost savings in processes. Talking about it in a broad spectrum, blockchain helps organizations reduce their costs by keeping the middlemen (third party providers and vendors) at bay that would traditionally offer the processing that blockchain is capable of doing.
Commendable speed: Blockchain eliminates intermediaries and manual processes in financial and data transactions. This way it is capable of handling transactions at a significantly faster pace than the traditional methods. In many cases, it can even manage a transaction in just a matter of seconds or even less than that. However, the duration may vary. How fast does a blockchain enabled system is able to process transactions largely depends on factors such as the size of each data block and the traffic in the network. Despite this, experts say that blockchain beats other technologies and processes when it comes to comparing speeds. You may consider custom blockchain development for moving your business transactions to blockchain and speeding up the processes.
Traceability and visibility: Even Walmart uses blockchain and speed is not the only reason behind it. They use it for blockchain's amazing ability of tracing the origin of fruits &other products. This enables retailers such as Walmart to efficiently manage inventory, proactively address questions, concerns, or problems, and confirm the history of each piece of the merchandise. In case a particular farm recalls its produce because of contamination, the retailer who uses blockchain can easily identify & remove the produce that was sourced from that particular farm without touching or affecting the sale of the rest of the produce. Experts say that blockchain can facilitate tracking of various items' origin including medicine for confirming their legitimacy (and that they are not fake) and for confirming that organic items are actually organic.
Immutable: Transactions performed via blockchain and recorded on it cannot be deleted or changed - meaning they are immutable. All transactions, on the blockchain, are date-stamped and timestamped. Hence, the record is permanent. Intrinsically, blockchain is excellent for tracking information over time, which enables a reliable and secure audit of information. Now this is in sharp contrast to the paper based, error prone, traditional and legacy systems of computer that were at high risk of being retired or corrupted.)
Individual data control: Blockchain makes way for an unprecedented and novel amount of individual-control on the digital data of its owner (individual or business). In today's world where data is highly vulnerable (and valuable), blockchain technology protects your valuable data while, at the same time, providing you with full control of it. Individual organizations as well as individuals can decide the digital data pieces they are interested in sharing, with whom, and for what duration. Also, the data owner can enforce limits of data access by way of a blockchain-enabled-smart-contracts.
Tokenization: This is a process wherein an asset's value (the asset can be digital or physical) is converted into digital token which is recorded on & then shared through blockchain. Tockenizationhas gained popularity with virtual assets such as digital art but it has way broader applications that can smoothen the transactions in a business. For example, utilities can use tokenization for trading allowances for carbon emission under carbon-cap programs.
Innovation: Business leaders across industries, globally, are implementing and exploring blockchain based systems for solving intractable issues and for improving longstanding inept practices. Multiple studies in this regard have proved that a large number of peoplemisrepresent their resumes, leaving recruiters and hiring managers with a lot of tedious and cumbersome tasks of verifying each piece of information manually. However,if the data is already on the blockchain, managers can get the truth behind the fake resumes efficiently and quickly.
Industries that benefit directly from blockchain
Benefits of blockchain span across industries but there are a few industries and enterprises that stand to gain immensely from this technology compared to the rest. Decentralized businesses that have multiple parties in need of data sharing and look for better & reliable ways to ensure data safety and that data is temper-proof are piloting programs and/or brought test-case to total protection. Some of the examples of blockchain beneficiaries include:
- Financial firms (as well as their customers): Clearing & settlement becomes less expensive and faster with the help of blockchain solutions.
- Healthcare: Blockchain can help healthcare organizations in ensuring the security of patient records and in maintaining privacy of patients while making it possible to share the data of a patient only as allowed by the patient.
- Government agencies and nonprofit organizations have blockchain based applications such as smart contacts for creating immutable records for enforcing stipulated terms.
Blockchain has some disadvantages & challenges too!
Blockchain's early implementations have brought out some challenges and disadvantages of technology as well, according to the experts.To begin with, applications based on blockchain require all within the ecosystem of the processes to be a part of the system and use it. Hence, everyone must invest in the technology implementation as well as process changes as they move to the new application based on blockchain. Furthermore, experts say that a lot of companies don't yet believe in blockchain and that it can delivery decent returns to cover the cost of replacing their existing systems at this point.
In addition to this, a lot of blockchain based solutions require support from other processes and systems for verifying that the data that is being added on the system is accurate. For example, consider using blockchain for the management of supply chain. Companies can make use of such a system for verifying whether the suppliers and vendors have paid applicable taxes or not. However, if they are not dependent on suppliers for confirming that with no external confirmation, it is quite possible that the entire blockchain solution's value is weakened.
One big weakness that exists in blockchain today is that this system assumes that all the parties that are involved in it adhere to the standards but still some of them could lie. Hence, it is important to cross-check the information to confirm it. There must be some strong mechanism to confirm the information being spread through the system.
The true value of blockchain comes in situations where currently no central trust or control is present and where a traditional database system will not work. Blockchain is of little use for such businesses where there is already a high level of trust. However, if there is poor visibility and chances of corruption, you stand to gain immensely from a blockchain enabled system. Blockchain application development is highly beneficial when it is paired with machine learning, artificial intelligence or machine learning or other layer of decision-making.
Despite all, experts believe that blockchain enabled systems will help bring business transformation and disruption, even if there is still enough time for this revolution to happen.
Since its launch a lot of hype has been there around blockchain and it appears revolutionary (theoretically), it will not trigger overnight transformation of the society. Maybe there are still many years we need to wait but one thing is for sure that blockchain is not a short-term technology.
As a business, you can boost your trust among vendors, suppliers, and customers with blockchain while keeping data of all involved parties fully secure and safe. You will need the help of a cross platform app development or blockchain app development company to help you empower your business with blockchain.
What is Blockchain as a Service?
Can Blockchain as a Service help you make this technology accessible to the audiences? What is blockchain as a Service all about? To offer blockchain-based services' benefits to a broader set of audiences, the technology is now being offered through the cloud as a service-business model. If we look at the operational front, Blockchain as a Service is somewhat similar to Paas, IaaS, and SaaS models that enable the use of cloud based storage and apps.
Blockchain as a Services allows all types and sizes of businesses to access the technologies based on blockchain with no need to invest in the in-house development. The Blockchain as a Service model allows companies to access the service of blockchain provider with which they can build blockchain based enterprise mobility solutions at minimum cost. This turns out to be among the key benefits and reasons that motivate businesses to consider blockchain and that makes blockchain an important part of the technology trends.
The only constraint that BaaS solutions for businesses have is that it requires centralization to some extent because the transactions need to be funneled via the blockchain services of the host. Furthermore, since the answer to using blockchain in business lies in decentralization, a lot of companies tend to be cautious in its adoption. Your blockchain mobile app development company can help you make the most of private blockchain system of Blockchain as a Service, as you need it.
Blockchain as a Service is a 3rd party cloud infrastructure & management businesses make use of for blockchain application developmentand management. BaaS works as a web host that runs the backend of an app. BaaS acts as anaccelerator that leads to the blockchain technology's widespread adoption.
How does the BaaS model work?
If you are willing to adopt the blockchain but don't want to go for complete blockchain application developmentand management, Blockchain as a Service can be highly rewarding for you. BaaS model explains the process through which 3rd parties maintain, host, and install a blockchain network on the organizations' behalf. The service providers facilitate blockchain technology and infrastructure set up in exchange for a fee.
Blockchain as a service, in many ways, plays a role for businesses that is quite similar to what the web hosting service providers offer. The service allows customers to utilize the cloud-based blockchain solutions for hosting and developing blockchain applications as well as smart contracts in the blockchain ecosystem that the providers manage.
Let's us have a quick overview of how Blockchain as a Service actually works.
The integration of BaaSin traditional business processes offers support around resources allocation, data security features, bandwidth management, hosting requirements, etc. Thegreatest impact BaaS has on businesses is that that they can focus on their core business without having to think about the complexities involved in blockchain operation.
How is BaaSshaping businesses?
Consumers as well as businesses are keep to adapt and integrate blockchain technology. However, the costs of operational overheads related to blockchain development, operation, maintenance, and configuration of the infrastructure as well as with the technological issues posing as a barrier. The benefits of blockchain for small to mid-sized enterprises, irrespective of their size, are highly energy consuming and resource intensive - hence, preventing the mass adoption of blockchain technology.
Businesses can acquire and get access the skillset required for blockchain infrastructure operations through BaaS. In addition to this, the investment required for venturing into the blockchain technology sector is also quite low because the BaaS agreement is easy to scale and even terminate at short notice. BaaS provides a way for SMEs to stay on top of the technology without having to take unnecessary risks.
Blockchain as a Service for startups
The opportunities offered by BaaS for businesses, and particularly small businesses, are highly suitable for organizations that outsource their technological aspects anddon't have expertise with the working mechanism of blockchain. Furthermore, it is recommended for businesses that don't have enough budget to invest in blockchain application development.BaaS enables these organizations to get the knowledge and understanding of the blockchain technology with no need to develop their own proprietary blockchain.
A lot of industries are now opting for BaaS solutions'integration for things such as identity management, payments, and supply chain management. Blockchain development and integration services are fast emerging as the chosen solution challenges faced by countless small to mid-sized organizations, including lack of transparency, middlemen elimination, etc.
Use cases of BaaSfor business include:
Tracking of documents - Blockchain technology provides a distributed, decentralized, and immutable system for documents tracking. By moving their documents on the blockchain, most participants are provided equal access to relevant information. Furthermore, blockchain is immutable which helps ensure the safety and security of documents.
Storage of data - Data stored on blockchain is fully secure and the risk of data loss is minimum due to thedecentralized system. The regulated sectors such as real estate, healthcare, etc. offer immense benefit to these organizations due to this immutability - fully secure data storage facility on blockchain.
Execution of contract -Under blockchain's smart-contracts service, organizations can execute contracts and be sure that high transparency is maintained at all levels. The distributed nature of blockchain means that all the entities must receive equal amount of information.
Summing up
The benefits of BaaS lie in raveling out various use cases of the service that are still not available. It provides the organizations with an opportunity for working on these use-cases with no need to make any long-term commitments. All that's required to be done is partner with the BaaS company and fully embrace the amazing capabilities of blockchain.
Now that we've understood and discussed how valuable is the BaaSfor enterprises, especially small to mid-sized organizations, let us understand the regional adoption of this technology.
The impact of Blockchain as a Service on various organizations has resulted in massive demand for the service - a clear indication of this is evident in the amazing growth that BaaS has witnessed so far and is expected to see in the years to come. The global BaaS market is huge across the US, Canada, and Mexico. Amongst the top reasons behind the growing adoption of the technology is the presence of small to mid-sized firms and large-sized organizations operating in the United States location and a willingness to integrate the technology with public utility services.
The growth of BaaS has been quite commendable in Europe as well. Government support offered by different countries is one of the key driversof BaaS and blockchain adoption. The APAC (Asia Pacific) region is the 3rd largest market for the integration of BaaS. The technology is expected to grow further here, thanks to the BaaS integration in conventional businesses and increasing investment in China, South Korea, and Japan.
To take BaaS' adoption for business further, several technology companies have now come up as the providers of BaaS.
Till now, we have been discussing the ecosystem of Blockchain as a Service and how BaaS is positively influencing SMEs, along with the top providers' list. While it indicates that BaaS is an ideal solution to proceed with this fast-growing approach, a lot of businesses can still lose out on the decentralization, which is the foundation of the fundamentals of blockchain.
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Is self-hosted-blockchain a better alternative? Let's understand.
When talking about the cost of self-hosted-blockchain app, the amount of ownership tends to be way higher due to the startup costs, operational costs, and retirement costs. Furthermore, the amount of smart contract development and deployment under this model can lead to hundreds of dollar and more. In comparison, the blockchain application hosted on cloud as a Blockchain as a Service offering can be roughly 0.29 dollars per allocated-CPU-hour. In other words, business needs to pay only as they go and for the service units that are used.
The cost of BaaS model may various on various factors like the concurrent transactions' number, transactions' payload size, transaction rate, etc.
