How are businesses adapting to blockchain technology?

Ever since Bitcoin started to really hit the headlines back in 2018 when its value started to go through the roof much of the focus has been on trading cryptocurrency. With volatile price changes, plus news stories of investors becoming millionaires almost overnight, it’s no surprise that this was what was grabbing the attention.

But far more interesting for businesses is the blockchain technology that lies behind not just Bitcoin, but all cryptocurrencies. As it is a fixed, confirmed and irreversible process its potential uses go far beyond simply facilitating financial transactions, although it’s important for these too.

The principle behind all cryptocurrencies has always been simple: to create decentralised currencies that are beyond the control of governments and banks. While this deregulated environment may seem to pose certain financial risks, there are some distinct advantages for businesses who have decided to accept cryptocurrencies as methods of payment.

The first of these is the speed at which payments can be made. The blockchain technology means that what might take a bank a few days can be almost instantaneous. The unique method of confirmation, and the fact that transactions are irreversible, also means that it is a very secure method of payment. With any business that exports or imports there’s also always going to be the question of currency conversion, an issue that simply doesn’t exist if trading is done in a crypto currency. Then there’s the question of fees. These are likely to be low, so this is another obvious attraction.

But there are some drawbacks too. For example, as already mentioned, the value of cryptocurrencies can be far more volatile than fiat currencies like Sterling and US Dollars. So, business done at the wrong time when the value is falling is going to be a worry. This may be one of the main reasons why most companies, with a number of notable exceptions, are still holding off using the new currencies.

However, the blockchain technology is being adopted by some major businesses, and not simply for transactional purposes. This is because it is method of data exchange that shares the speed and security of financial transactions that can be used in several ways.

For example, Barclays Bank and the Royal Bank of Scotland have recently conducted a trial to see if the use of blockchain technology could accelerate property purchases. Normally a very slow and laborious process, using blockchain tech eliminated the need for a great deal of the standard paperwork and was found to speed up sales to such an extent that the property transaction company called IPN who oversaw the trial estimate that applying this technology globally could save $160 billion a year.

In the retail sector, the Co-operative Food Group have successfully started using the blockchain for a very different purpose – to confirm and record the provenance of all the fish it sells in its UK stores. By having a set ledger, it has helped the retailer to be able to stand firmly by its principles as an ethical operator and gain a distinct advantage over supermarket rivals.

So, in conclusion, it’s very likely that many other businesses are currently developing blockchain technology for their own purposes right now. And, even if it takes a while for cryptocurrencies to take off in the UK, the blockchain is undoubtedly well on its way already.