10 Critical Benefits of Applying Blockchain to any Industry

1. Reduction of the middle-man

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Maybe one of the most important blockchain applications is the reduction of middle-man or elimination of intermediaries. In any business process or supply chain, some gaps are filled by 3rd party companies specializing in a certain service.
These middle-man add a lot of complexity to any industry or business flow. They tend to slow down a process because they work on a different schedule. These tend to be separate companies that service many clients and cannot prioritize one above the others.

This is a great blockchain application area since a distributed ledger can directly connect the source with the final consumer. Middle-men are mostly local companies that record the transportation of goods. A blockchain can save these movements in an immutable network that does not need additional record keepers.

One of the blockchain application examples in this area is Walmart's use of this type of system. The company is using a blockchain network developed by IBM to follow its goods through the supply chain. It is improving traceability and food safety for many of its products.

2. Elimination of redundancies

Another one of the most important blockchain application examples is the elimination of redundancies. In any complex supply chain, manufacturing process, or quality control system, data is stored in many databases. Even if the entire process is done by a single company, different departments have to keep their own records.

The result is that the same data inputs are recorded multiple times on different systems. Over time, the data redundancy becomes expensive as each department needs to add storage capacity to keep up with the others. Additionally, discrepancies among the different databases develop over time, making it difficult to know which is the accurate record.

This is an excellent blockchain application case study. A blockchain network immediately records information in a trustless, immutable environment. Record sharing becomes far easier as every department is working with the same ledger and order of events.

Blockchain technology can immediately make any process more efficient and transparent. Its application reduces inefficiencies in the information management field for any company or any type of enterprise.

3. Automation of business logic

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Another powerful technology that is associated with blockchain is the smart contract. Smart contracts are the translation to a computer language of a particular business process. The business logic of a smart contract is recorded to the network. In it, every participant of the network can verify the information and execution of the smart contract.

This ability can automate many processes in any company. Not only making any business faster but also ensuring the security of a company. As the outputs of a smart contract are finite and anyone using them can be sure, its output will always be predictable.

4. Format unification

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Another problem enterprises face when dealing with middle-men or various independent departments are data formats. Different databases and data management systems use their own data format when recording information. This is a huge problem when the different parties have to exchange data and compare records.

The problem becomes bigger as time passes. As the amount of information recorded grows, it becomes more difficult to make each source compatible with the other. A blockchain hashes the information stored using a single hashing algorithm, and that means anyone can read the data regardless of the original format.

The power of this capability of the blockchain is immense. Finally, a single network can record data from different sources and make it readable to any party. There would no longer be conflicting formats or discrepancies in the record.

.Improved audibility

All the features mentioned above lead to a single result, better audibility. A blockchain network is making recording, reading, reducing, and improving the transmission of any information. This results in a unified record that can be audited by the company, government regulator, or investors in a matter of minutes.

Today, audits are among the most complex accounting processes out there. The auditor needs to access vast amounts of data divided among several databases and recorded in different formats.

A blockchain could rapidly give access to any auditor to the entire history of any business. For here, any company's health and efficiency can be ascertained, making sure no errors are compromising the data or unscrupulous actors hiding financial problems.

5. Drawbacks to public blockchains

All the above-mentioned advantages apply to public blockchains, but these also have disadvantages for businesses. Perhaps the main one is that data in a public blockchain is visible to anyone. The wallet address hides identity, but transactions, smart contract code, dates, and geographic locations would be accessible to anyone.

For example, anyone can see the code of the Uniswap exchange using an Ethereum blockchain explorer. Not only that, but anyone can clone the code and launch their own exchange with very little work. This won't do for private businesses.

Any business on the planet wants to protect its proprietary data. So, using a public blockchain would be out of the question. But there is already a solution in the form of enterprise blockchains.

6. Enterprise blockchain

An enterprise blockchain is a network that connects a limited number of nodes. Each node has an identity that is shared with the network, and after the blockchain has been set up, no other nodes can join. In exchange for losing anonymity, an enterprise blockchain is far more customizable than a public one.

Some examples are, there is no need for a block production time because each participant is known to the others. Smart contract code can be hidden, but the output can be made public. There are no transaction costs in an enterprise network. There are no network rewards to the nodes.

Finally, there is no delay to transaction confirmation because blocks don't need to be mined by the network.

Some popular enterprise blockchains are:

Hyperledger Fabric

An open-source project created by the Linux Foundation in cooperation with IBM. Hyperledger Fabric is one of the most used enterprise blockchains out there and has been growing rapidly in recent years. It uses the Golang programming language, but it also supports Javascript, Java, Python, and many other computer languages.

It is actually what is powering Walmart’s blockchain, and other companies like Honeywell and Change Healthcare are developing networks based on Hyperledger Fabric. Anyone interested in working for the blockchain enterprise space should start here.

R3 Corda

Originally a private blockchain network developed by financial institutions such as JP Morgan, Barclays, BBVA, CIBC, Commerzbank, DNB, and HSBC. It was designed to work as the infrastructure to a future international payment system. It has not become an open-source project for financial institutions across the world.

Now, more than 100 banks are actively developing using R3 Corda, and many more join every year. It is one of the most dynamic enterprise blockchains in the private sector, specially dedicated to financial institutions.

Conclusion

Blockchain is growing as a technology not only at the retail level but also for enterprises. Blockchain adoption will only speed up during 2021, and soon every aspect of modern life will rely on blockchains in some form. We are at the early stages of this technological revolution, so it is good to be early.

So, read Best Crypto Guides to Start the New Year in 2021 to begin your crypto journey. Right now is the time to start learning about the technology and be prepared for the upcoming blockchain revolution.