Blockchain is starting to become a concept and technology that is commonly occurring in the media and in business news, yet many people still do not fully understand what it is and how it can transform organisations. Blockchain is the development of a means by which data can be structured. It is considered a coding advance that allows transactions to be linked together in blocks, through which a digital ledger can be shared between different organisations or entities. The information is maintained in a decentralized manner, and no one individual party can alter the records. Instead, the mathematics behind the system prevents this, limiting opportunities for fraud. Blockchain is the technology on which Bitcoin, a cryptocurrency was built. However, it is increasingly understood that the applications of Blockchain go way beyond this.

One of the more obvious applications of Blockchain has been in the financial sector, and most large companies have already been investigating options in this area. The strong resistance to fraud makes Blockchain compatible for use in this area, given the lack of a need for centralised supervision. There is also interest in this area given the ability for automatically recording of, and verifying a massive amount of digital transactions, no matter where the transaction was carried out. This does not just apply to banks but also to any organisation that performs transactions such as money transferring – leading to the ability to cut out the middle man and reduce the costs of such services.

Blockchain also has important ramifications for businesses that rely on international trade and logistics. Blockchain technology can be harnessed to track products and components in an automatic manner throughout the process of their transportation through different organisations. The data that is kept is secure and comprehensive – and of course, not subject to manual intervention that could lead to errors. The blockchain system’s built in consensus mechanism between different computers (“nodes”) worldwide prevent this from occurring and allow robust checking of issues. SMEs with a need for transporting items across supply chains might do well to consider incorporating this type of technology.

Another major area where blockchain can have important benefits, which SMEs can take advantage of is in the area of online identity verification. Blockchain allows a more effective and reliable form of identification of a person without the requirement for third party involvement. As well as the benefits in terms of the reliability of the verification, the speed at which checks can be performed is much faster. This can help businesses speed up processes and make them more reliable. There are implications here for a variety of different types of businesses, including those in real estate and insurance, among many others.

Savvy entrepreneurs should consider the opportunities that blockchain could offer for their businesses to get ahead of the curve. This may involve undertaking research and development activities to do so. If funding of such activities is a concern, Fundsquire may be able to help, as we specialize in financing based on government R&D tax relief and credits. Why not contact us today to find out more?