With the Blockchain technology so much in demand, it offers solutions to all small and medium-sized enterprises (SME) to grow and expand. This technology is not only affecting the finance sector but ramifying almost all industries like healthcare, asset management, media, telecom, and others.
According to the World Bank, “Formal SMEs contribute up to 40% of national income (GDP) in emerging economies”. But what’s making this possible? The blockchain technology is proved to be a governing factor in providing aid to SMEs by its network and applications.
How Blockchain Meet Growing SME Demand?
As blockchain technology is of the most exciting technologies of the future, most of us already aware of its essential characteristics, which make it unique. Let’s have a quick overview of the core properties.
- Distributed ledger
- No third party involvement
- Privacy and Security and
Coming back to our concern, how Blockchain meet growing SME demand?
Secured Cross Border Payments
As Blockchain is a distributed ledger technology, having no third-party involvement, this technology enables small organizations to perform secure transactions. Bitcoin is one of the most known and exciting applications of this technology whose aim was to make secure transactions, similarly by making use of blockchain technology; employees can send and receive money across the world with complete transparency and security at cheap rates. This technology acts as a secured bridge between the receiver and the sender, making the payment process faster and reliable.
Offering Cloud Data Storage
Cloud services is another useful application of this technology that offers free storage capacity to all small and medium scale businesses. It allows SME to scale indefinitely, ensuring trust and safety at the same time. Excessive cloud storage can also be rented out (keeping the whole thing encrypted) to the other business owners, thus bringing new income opportunities as well. Blockchain-as-a-Service (BaaS), based on SaaS(Software as a Service) model, allows SMEs to leverage cloud solutions to build, host, and operate their own blockchain applications, and this is giving rise to blockchain adoption globally.
Customized Distributed Ledger Network
The numerous reasons for adopting blockchain technology does not come to an end here. When it comes to blockchain infrastructure and protocols, Ethereum, Hyperledger, Openchain, to name a few, are the most well-known platforms that are taking SMEs to the next new level. Blockchain network and infrastructure allows small and mid-sized companies to construct their own customized distributed ledger network. DLT works on distributed databases, which leads to high throughput, low latency, and data transparency. Blockchain platform like Ethereum allows businesses to build their own decentralized applications, making Blockchain a global platform. This technology can be seen as a game-changing technology for all those who are ready to master it.
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Before understanding how smart contracts are useful for SME, let’s be very clear about what actually smart contracts are?
Smart Contract is a self-automated computer program build on this technology, a digital ledger which stores encrypted data in a decentralized location, enabling the user to exchange valuable information. Thus smart contracts are high in demand, many businesses have already adopted this methodology will few are yet to explore and learn. Using smart contracts in small and mid-size companies speed up the traditional process by eliminating all the intermediaries. Secondly, it is cost-effective for all businesses, and most importantly, it is secure and safe as information is encrypted and resistant to hacking.
Integration of Blockchain with smart devices
IoT is the most of the discussing technologies as it connects people, devices, and ties everything together, but its security and scalability are the prime concern. Blockchain enables smart devices to act as self-governing agents to perform secure transactions. Blockchain in the sector of IoT is useful in overcoming centralized bottleneck problems. Blockchain is a distributed ledger technology which is tamper-proof, thus eliminating trust issues between various parties. It enables fast transaction processing and coordination among billion of smart devices as well. SME can be benefited from the integration of blockchain technology with the smart devices to make all transactions secured and offering scalability and eliminating the need to pay to the miners.
IOTA, one of the first Blockchain IoT platform, and another ADEPT(Autonomous Decentralized Peer-to-Peer Telemetry, introduced by IBM and Samsung together for utilizing proof-of-work and proof-of-stake both to secure transactions.
There are plenty of ways in which Blockchain can transform and bring a new curve in the functionality of small and mid-sized businesses that can save time and effort to a great extent. Blockchain technology can meet the growing demands of businesses by offering better payment facilities with all the tools and services in almost all the core applications. Migrating to this technology will help SMEs with visibility and extraordinary opportunities to generate immediate results.
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