Suliman Mulhem is a Dubai-based blockchain consultant and the founder of Formula1News.co.uk.
While blockchain technology is primarily associated with cryptocurrencies due to them accounting for the lion’s share of the media coverage about this space, its potential applications reach far beyond digital coins and tokens. But as a consultant in this field, I have noticed that many businesses still haven’t even scratched the surface of how blockchain-based products and solutions can make them more efficient and profitable.
What is blockchain technology?
Before exploring how blockchain solutions have the power to improve businesses, it’s prudent to first outline what exactly a blockchain is: A blockchain is a unique type of shared database or digital ledger. It’s essentially a way of recording and storing information, and because all of the transactions are duplicated and distributed throughout all of the computer systems on the network, it’s very difficult (if not impossible) for a blockchain to be hacked or fraudulently altered.
Based on my experience, here are four ways blockchain technology can help businesses save money, minimize inefficiencies and offer innovative products and solutions.
1. Smart Contracts
A smart contract is a type of self-executing agreement, with the terms of the contract written across a distributed, decentralized blockchain network. Smart contracts are self-verifying, transparent and tamper-proof, as they’re maintained on the blockchain. These have real-world applications in virtually every industry. For instance, smart contracts can simplify real estate transactions—which are typically time-consuming, inefficient and expensive due to the numerous intermediaries and paperwork involved—by self-executing each stage of the transaction as the prior stage is completed. By cutting out intermediaries and streamlining the process, a material amount of money and time can be saved per transaction.
2. Artificial Intelligence
Artificial intelligence (AI) has been dominating the tech headlines in recent months, with ChatGPT in particular making waves as it makes AI more available to the masses. There is little doubt that AI is the future and will disrupt virtually every industry to varying degrees.
Blockchain AI is especially exciting for many business owners, as it is “more resilient and less exposed to cyber vulnerabilities,” according to Paul Farhi, the founder of Solidus AI Tech. In an interview with Crypto Intelligence, he pointed out that Blockchain AI systems offer more autonomy and noted that their applications include chatbots, medical software and autonomous vehicles.
Farhi also added that blockchain AI offers enterprise-level traceability, a native blockchain revenue stream, a stronger level of encryption, more autonomy and more resilience. Therefore, by incorporating blockchain AI, businesses can improve operational efficiency and widen their profit margins.
3. Payment Gateways
Blockchain-based crypto payment gateways can slash payment processing fees, as their charges are typically a fraction of the processing fees charged by major credit cards and digital payment platforms, such as PayPal and Stripe. For example, while PayPal charges around 3.5% in addition to a currency exchange fee (if applicable), NowPayments—a crypto payment solution and gateway that allows businesses to accept online payments in a vast number of cryptocurrencies—has fees as low as 0.5%.
With regard to business-to-business (B2B) payments, cryptocurrencies also offer significant cost savings. For instance, businesses can send a payment of any size—to another business or an employee—with a transfer fee of just around $1 (it varies depending on the crypto exchange used) if they remit payment in Tether USD (USDT) on the Tron network.
In addition to the significantly reduced fees, crypto payment solutions also offer much shorter settlement periods. I myself pay all of my employees in crypto, saving my businesses a few hundred dollars per month in transfer fees and allowing my staff to receive their salaries within a matter of minutes.
4. Security
Due to the inherent security of the blockchain, integrating blockchain-based solutions and infrastructure into your business can make it considerably more secure. In some cases, with the support of a cyber security consultant, this may even allow you to cut costs by scaling back your spending on more traditional cyber security measures. In fact, countless dedicated blockchain security companies have been launched to help businesses take advantage of these innovative cybersecurity solutions.
Challenges Of Utilizing Blockchain
While there’s evidently plenty of scope for entrepreneurs to utilize blockchain technology to improve various aspects of their company’s performance, there are also potential stumbling blocks that can deter business owners and senior managers from exploring and executing some of the aforementioned blockchain-based solutions.
For example, some applications, such as smart contracts and payment gateways, cannot be implemented unilaterally; they require the counterparty to also be willing to use them as part of the deal/transaction. Given the fact that most business leaders, in addition to consumers, only have a rudimentary understanding of blockchain technology and the associated products/solutions, it’s easy to see why counterparties might be reluctant to agree to migrate to a new platform or solution at this juncture. In fact, this lack of understanding is arguably the most significant barrier to businesses adopting any one of the blockchain-based solutions discussed in this article.
Another obstacle that is specific to blockchain AI is the ethical consideration of laying off employees—either directly or indirectly—as a result of utilizing artificial intelligence within a business’ operations.
The aforementioned obstacles will undoubtedly affect many businesses’ ability to adopt blockchain-based solutions, but they are not insurmountable. For example, businesses can help counterparties become more amenable to utilizing a smart contract or a crypto payment system by educating them about the benefits. Specifically, sharing case studies of how you or other companies in your industry have cut costs or improved efficiency by adopting such solutions can be especially effective at alleviating concerns about entering uncharted territory.
Final Thoughts
Although the blockchain space is still somewhat in its infancy, there are already several innovative blockchain-based products and solutions that business leaders can consider utilizing. And, given the emerging and fast-paced nature of this space, we can expect countless more blockchain-based solutions to hit the market in the coming years.
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