While being an entrepreneur in the technology industry is not the same as being an entrepreneur in another industry, there are a few things that remain constant, regardless of the business you’re in. Everyone wants to use the best techniques and technologies available to save time and money, secure their valuable business data and provide the best product or service possible. Disruptive innovations, such as blockchain and cryptocurrencies, are affecting the way entrepreneurs do business more and more, forcing traditional business models to adapt or be replaced. Jose Duarte, an entrepreneur and innovator from Costa Rica, offers insight into why integrating blockchain technology into business operations can be beneficial.
In recent years, more and more people are getting involved in cryptocurrency trading, many without even realizing how the underlying technology (blockchain) is changing our world. While this technology can sometimes be complex, the idea behind it is quite simple. Explains Duarte, “Blockchain is the technology that drives cryptocurrency. It functions as a distributed ledger that runs on millions of devices to record all of the transactions, establish identities, validate contracts and securely store technology.”
Initially launched with Bitcoin in 2009, the blockchain at the time offered an alternative monetary and financial system, one that did not require any centralized power to create money, nor any third party to approve transactions. Decentralization was a central concept in the creation of this peer-to-peer digital payment system and blockchain technology. Lack of confidence in financial institutions (especially U.S.-based institutions) led to a banking and financial crisis in 2007-2008. For Satoshi Nakamoto, the pseudonymous creator of Bitcoin, taking away the power of a few and putting it in the hands of many was, one can imagine, a key motivation.
Today, blockchain technology is used in many different industries and some of the those in which blockchain is most prominent have very little to do with the financial sector. These include industries such as health, music, food, education, fashion, human resources, accounting, supply chain management, legal services, marketing and the public sector, among others.
The main reason for its success in so many different sectors is that this technology can be used to transfer and store information and money quickly, securely and privately. But it can also deal with anything of value, whether that be money, titles, writings, music, art, scientific discoveries, intellectual property and even election results.
A report published in Harvard Business Review explains that blockchain is “solving the problem of intellectual property [intellectual property] in a digital age, creating a better-shared economy, opening manufacturing, and changing business collaboration.” Blockchain can help companies transact more efficiently, more transparently, faster, cheaper, and with a higher level of security.
This can definitely have a significant impact on how companies operate. Adds Duarte, “Blockchain can help businesses in any sector. From cross-border financial to physical business transactions, reducing processing, verification, monitoring, coordination and transport costs by streamlining and digitizing processes involving multiple stakeholders. It helps reduce fraud, improves the transparency of intellectual property rights, improves traceability and opens up new opportunities for small businesses.”
Another great feature of blockchains are smart contracts. These represent a set of rules set in advance and coded in a blockchain. They follow an agreement between two parties and are executed automatically once all conditions are met, all without the intervention of a third party.
End innovations based on blockchain technology offer many opportunities for today’s business models to evolve more transparently and digitally. Among the most important innovations being developed, are dynamic and distributed payment infrastructures, peer exchange economies, smart contracts, digital identities, property and intellectual property protection and more.
With the global economy changing at an accelerated pace, business models must be agile and adapt, using innovations and new technologies to save money. At the same time, they have to be able to build a stronger reputation and community in an increasingly digital world. Blockchain technology affords businesses those characteristics.