How Blockchain Technology is Contributing to Digital Transformation?
Impact of blockchain on Digital Transformation
New technologies are revolutionizing businesses like never before. One such emerging technology is blockchain which is certainly setting the course for digital transformation. Invented as a technological architecture for Bitcoin in 2008, blockchain solves some of the biggest issues of digital economies. With security, networking capabilities, and data protection features, blockchain can dodge traditional cybersecurity threats and enable the information-sharing requirements of contemporary businesses.
Companies serious about using digital transformation to their advantage should consider using blockchain in their digital processes. Although it’s not as flashy as other technologies, blockchain applications have the potential to transform industries more than any other solution. As per reports, by 2022, worldwide spending on blockchain solutions will reach $11.7 billion. While the global blockchain technology market is estimated to reach $20 billion revenue by 2024. These stats are more than enough to understand the potential of blockchain in the coming years.
Moving further, we will discuss the benefits of blockchain and how to embrace blockchain for digital transformation.
How is blockchain driving digital transformation?
With ever-increasing consumer and market demands, the best way to future-proof a business is digital transformation. Blockchain technology can help build a foundation for this digital transformation and be a perfect tool to keep up with the world. Here are the numerous benefits that this technology can present to different industries and drive digital transformation, through its distributed and decentralized nature:
- Greater transparency: As blockchain uses a distributed ledger, transactions and data are recorded identically in multiple locations. All network participants with access can see the same information at the same time, providing full transparency.
- Better security: Blockchain offers high security as each new transaction is linked and encrypted to previous transactions. It is formed by a string of complicated mathematical numbers and is impossible to be altered once formed. This immutable nature of blockchain makes it safe from falsified information and hacks.
- Increased efficiency and speed: Blockchain removes the need for middlemen in many processes. This allows transactions to be completed faster and more efficiently. You can store the documentation on the blockchain with transaction details, thereby eliminating the need to exchange paper. Clearing and settlement can be much faster as there’s no need to reconcile multiple ledgers.
- Improved traceability: Blockchain creates an audit trail whenever an exchange of goods is recorded to trace the origin of goods. This not only enhances security and prevents fraud, but also helps verify the authenticity of the traded assets.
Applications of blockchain for digital transformation
Smart Contracts: As of today, smart contracts are used in multiple business processes. These are self-executing contracts where all the terms and conditions from both the parties are written in codes. These codes are then stored on a blockchain network, making them immutable. So, whenever the codes written are fulfilled, the associated conditions are executed. The services/products are returned back to the other party if any of the parties overrules the conditions. Thus, the use of smart contracts encourages the businesses to execute legal actions without involving any middlemen or attorney.
Internet of Things (IoT): The Internet of Things (IoT) is the next logical boom in blockchain applications. An increase in IoT products means greater chances of hackers stealing your data. However, blockchain infused IoT adds a higher level of security to prevent data breaches by utilizing transparency and virtual incorruptibility of the technology.
Healthcare: Utilizing blockchain in the healthcare sector has shown the potential to reduce healthcare costs and streamline business processes. As per reports, over 176 million data breaches occurred with respect to healthcare records from 2009 to 2017. The security features associated with the blockchain can help protect health information much better. The unique capabilities of blockchain can also help real-time disease reporting and the exploration of disease patterns to identify its origin and transmission parameters.
Logistics: According to a joint study by Accenture and DHL, there are more than 500,000 shipping companies in the US alone, causing data siloing and transparency issues. The report further states that blockchain is the solution for solving many of the problems arising in logistics and supply chain management.
Blockchain can enable companies to track their products/services throughout the process – right from manufacturing to transportation, and delivery at the consumer end. It also introduces the power of transparency and immutability into the process. In a nutshell, blockchain is safe and a cost-effective solution for the logistics industry.
Personal identity security: By keeping social security numbers, birth certificates, birth dates and other sensitive information on a decentralized blockchain ledger, the government could see a drastic drop in personal identity theft claims.
Better recruitment process: Blockchain is playing a vital role in the recruitment process. This emerging technology prevents candidates from using tools such as photoshop to build fake documents. This also saves time for organizations as they are not required to verify all the documents before hiring the potential candidate.
To conclude, blockchain has the potential to change the face of businesses. It is the part and parcel of digital transformation. It can offer a number of benefits to both small and large enterprises. It will also take the consumer experience to a different level altogether. If you have any questions regarding blockchain technology, you can take help from top blockchain app development companies. They can help you better understand how the technology functions and how exactly your business will benefit from its adoption.