The blockchain has created a buzz around the business industry for over a year now, but nobody seems to truly understand it. In laymen’s term, it is a digital platform for recording and verifying transactions. It allows transactions to be anonymous and secure at the same time. It distributes trust through mass collaboration. Its underlying framework can virtually record everything, making it a true medium for value.
Four main things drive the excitement about the blockchain in an enterprise:
- Proof of Authenticity
- Data Notarization
- Data Aggregation
- Asset Settlement
These four provide exciting opportunities around reorganization of the backend processes between and within enterprises.
How can the blokchain help start-up enterprises? As a digital ledger, it timestamps transactions by logging into an uninterrupted chain of records and providing proof of all transactions. It is unbreakable and un-hackable. Most of all, it is crowd-sourced. The technology streamlines costly and complex processes such as trade processing, clearing and settlement. Since it cannot be tampered and exploited in any way, it is the perfect solution for transparency issues.
Many start-up companies contract on the open market and create corporations due to high transaction costs. While the Internet reduced cost of search, communication and coordination, the blockchain makes it cheaper for companies to organize capability inside their boundaries. It is a global peer-to-peer platform of transactions, reputation, identity and trust, which promote innovation and shared value creation.
Start-ups should be immensely hopeful about the blockchain. The technology has opened a world of possibilities that enables economic empowerment. It allows them to own their identities and personal data, do transactions, and create and exchange value without intermediaries. It lets them protect their own identity and monetize their own information. It is a dream come true for the entire business industry, addressing transparency issues in one gracefully designed package.