Blockchain can fuel business development and growth

Blockchain technology brought us new types of digital assets such as cryptocurrencies, stablecoins, NFTs, smart contracts and digital games.

Some of them provide the basis for introducing new payment solutions that allow companies to engage with audiences worldwide in real time and at affordable prices. Blockchain technology has also enabled the creation of exchange platforms such as Binance that allow investors to purchase Bitcoin and other digital currencies to add to their portfolios.

Blockchain was developed as a platform that offers digital services intended to bridge the gaps in the current financial system. Traditional databases keep track of individual entities, while blockchain enables data synchronization, connecting groups of entities and independent stakeholders. Blockchain technology is alluring to businesses of all sizes because it offers an efficient and affordable solution to process payments, save energy, access investments and build a credit history.

Blockchain and cryptocurrencies offer great growth potential for business because they facilitate market competition and support the development of new services. However, they have created a heated debate about the decision to integrate them into business processes. This article aims to help entrepreneurs determine whether blockchain can fuel the development and expansion of their ventures.

Blockchain offers various digital resources for SMEs

It may be surprising to some to learn that SMEs account for 50% of the total number of jobs and make up 90% of all businesses globally. According to statistics, they create 7 out of 10 jobs, which is crucial for economic growth. The World Bank predicts that the market will deliver around 600 million jobs by 2030 to integrate the future global workforce. However, SMEs need help accessing the necessary funds to grow because they struggle to join the informal economy. Unfortunately, this is a major obstacle to their growth because it directly affects their business. Developing economies will require AME financing for at least $8.9 trillion, but it is not easy to believe that it can reach that point in the current context, where the supply is $3.7 trillion. The funding gap is just one of the challenges SMEs deal with; they also deal with skills shortages and automation threats.

Blockchain can be the solution that enables SMEs to grow and adapt to the ever-changing needs of the market.

Blockchain allows businesses to save money and simply manage payments

Businesses can be paid in digital currencies such as Ethereum and Bitcoin by customers from all over the world without having to pay fees for cross-border payments. Most companies have stablecoin accounts to transfer their money regularly and store it in a digital wallet that is not subject to fluctuations in value. Business owners decide whether to keep the finances for investment purposes or use them for other reasons.

Efficient and affordable cross-border payments are a reality thanks to blockchain technology that supports all kinds of business models without requiring exchange fees. Traditional money transfer services always charge a fee when converting foreign to native currencies. Blockchain also enables companies to save resources and build a credit history they can use in case they need to borrow money in the future.

Blockchain enables businesses to expand into new markets faster, supporting business growth. The technology can also be used to track supplies and orders because the ecosystem allows no changes and offers full data transparency.

Blockchain connects small businesses to global enterprises

Small companies find it challenging to stand out in the market because they need more resources from large companies. But suppose they integrate blockchain technology, they can enter the market and compete with big names because they can connect with partners who will support their operations.

Small businesses struggled to survive during the pandemic, especially because they could no longer sell in person, so they had to invest funds in building online stores. Some companies struggled to adapt to online sales, especially because they had to manage online payments. Blockchain technology makes it easier to collect payments because it enables companies to create digital wallets and requires little or no fees for transactions.

Blockchain technology introduces the concept of smart contracts

When Bitcoin was first introduced to the market, the blockchain was limited to transferring cryptocurrencies. Unfortunately, the technology lacked use cases, and this is where Ethereum and smart contracts come into play. Ethereum was developed to offer an alternative to Bitcoin and give users the help cases they needed. It introduced the concept of smart contracts to the market, quickly became popular and revolutionized the blockchain sector. Smart contracts are often described as the evolution of blockchain because they eliminate the need for an intermediary. Smart contracts act as self-executing apps that transfer digital assets or something of value when a specific set of conditions are met.

Smart contracts have evolved over the past few years and have countless applications for companies, one of which is enabling the development of digital currencies using the ERC-20 protocol. This feature led to an increase in Ethereum’s price in 2017 and gave it the status of the second largest cryptocurrency by market capitalization.

Smart contracts also facilitate the implementation of non-fungible tokens, which can be used to tokenize valuable digital assets such as real estate, art, and other similar goods.

Tokenization offers businesses several benefits:

• Higher liquidity – businesses can use smart contracts to obtain loans after tokenizing their illiquid assets. This is a big advantage for companies that do not want to deal with traditional banks.
• Access to an inclusive market – blockchain allows all players to sit at the table, allowing companies of all sizes to interact and join a true open economy. The ecosystem facilitates direct contact between users, so that companies can get fair prices for supplies.
• Proof of Ownership – NFTs act as universal templates and give users ownership. The blockchain is transparent and immutable, so no one can change information.
• Increased transparency – all information recorded on the blockchain is traceable, so anyone can access it. This feature gives the public a high degree of trust because they know exactly where their products come from.