In today’s hyper-competitive economy, startups seek efficiency, privacy, and protection. Essentially, these features are vital to ensure the utmost consumer experience.
And, it needs no argument that whoever has the customers; has the leverage in the economy.
Perhaps, entrepreneurs need technology that can offer them choice, privacy, and protection, while keeping the customers happy all the time.
This is where blockchain can especially be useful for startups and small businesses. It can help with transactions, raise capital, and ensure the safety of the users at all times.
Although, it may seem that such advanced technology is only suitable for large organizations. Note that the truth is slightly different from this perception.
Indeed, the cost of technology is lower than any other technology out there, in most cases. And perhaps, that is another reason to include this technology in your startup.
Fun Fact: Blockchain technology is helping every domain and sector, from finance to hospitality and more.
Here’s more for you:
Safer Payment Module
Of course, the first thing that small business owners and startup entrepreneurs can use blockchain for is payments.
The technology has a proven record for safe payments (the cryptocurrency case).
Besides, its immutable and irreversible nature further adds to the safety of the transactions.
Perhaps, small business owners can also promote the existing cryptocurrency market and earn more profits out of it.
Consider this situation: a customer pays you in Bitcoin. Now, since the bitcoin is highly volatile, it is possible that when the customer paid you in Bitcoin, it may have had a lower value.
Down the line, holding on to your bitcoins can help you reap the appreciation in its value and make you more profits.
However, entrepreneurs may need a lot of planning and testing before rolling out the idea. Note that the traditional merchant services are not equipped to accept crypto payments. And as such, entrepreneurs may need to either invest in an integration module or a separate merchant to accept cryptocurrencies.
Additionally, accepting payments in cryptocurrency can lower the cost of transactions since there is no intermediary involved. And this benefit will ultimately be passed on to the customers as additional discounts.
Cheaper Cloud Storage
According to reports, businesses and individuals spend over $20 billion on cloud storage every year. Currently, 30%-40% of the cloud service users actually use paid services.
Considering these numbers, the cost of cloud storage per user is quite high.
In contrast, blockchain storage is quite cheap per user. The reason is, there are no special data centers that need to be set up anywhere.
As already mentioned, blockchain technology is a form of a distributed ledger. It uses local storage on every users’ system to store data.
Now, the security part; the technology is immutable, and hence data once stored cannot be modified or altered. Besides, the information is encrypted so, it can only be downloaded by authorized users.
Leverage Smart Contracts
One of the best Information on Blockchain is that it can be used as smart contracts. As the name suggests, these contracts are self-verifying and self-enforcing.
Entrepreneurs come across contracts every day for outsourcing to buy new equipment and whatnot. And one of the biggest concerns with traditional contracts is the risk of losing money.
Of course, there are legal frameworks to protect both/all parties involved in a contract, but still, the time involved could be a huge concern for many.
Now consider smart contracts. The payments are only released as the contracts are fulfilled. Yes, you read that right.
Say you want the payment to be released after the shipment status of your goods turns delivered. It is possible with the help of smart contracts.
Perhaps, this is one of the reasons why the trade finance industry is already leveraging the technology and implementing smart contracts.
Besides, the best part about smart contracts is that they eliminate the need for any attorneys.
Raising Capital For Business
Traditionally speaking, startups used banks, lenders, private equity firms, and even crowdfunding to raise capital. However, blockchain offers an alternative to these methods; a far better alternative.
Entrepreneurs can now use ITOs (Initial Token Offerings) to raise capital for their business. The best part is, ITOS are available for trading in exchanges for free.
Yes, that’s correct.
Perhaps, you can compare ITOs with equity or revenue shares of the company. The only difference is, these ITOs are based on cryptocurrencies.
The ITOs are typically launched in the market and made available to interested buyers. This is the method that all cryptocurrencies, including Bitcoin and Ethereum, used initially to enter the market.
As the tokens are traded in the exchange, they generate more coins and increase in value.
Additionally, the entrepreneurs can also offer some utility for these ITOs to the buyers. For example, the buyers/investors can use these tokens to buy products or services from the company. Or it may also be used to represent a stake in the company.
It is noteworthy that ITOs already have a growing loyal investor base. Perhaps, this makes them a viable alternative for raising capital regardless of the company size.
Moreover, slowly and gradually, the crypto tokens are entering the realm of liquidity. A good example is, some governments have already legalized cryptocurrencies as legal tender.
The Bottomline
The blockchain has already ushered in a new era of technology ever since the first cryptocurrency was introduced. And now it is paving the path for other industries and trades too.
It is gradually coming out of its discreet image of being used in illegal trades and is now becoming a valued asset.
Perhaps, the business owners and entrepreneurs must see the opportunities in this growing technology. Or more, they may also use it to differentiate themselves from the competition in the market.
Be it to offer security or just a marketing stunt; blockchain technology is not staying behind the shadows anymore. And any business that rides on this new bandwagon is sure to benefit down the road.
Maybe, your company could be on the next fortune 500s list.