Blockchain technology is an innovative method that helps enterprises in creating, verifying and enforcing various transactions without a central authority. It can be termed as a decentralised ledger that can record multiple transactions in sequential form. Different transactions such as property and money that require authorised contract can be recorded on the blockchain.
Small-scale industries still consider blockchain technology to be used only for the cryptocurrency. But this is far from the truth. Blockchain is an essential technology for small businesses as it can change the way of negotiation, verification and execution of transactions in these industries.
SMEs face £3 trillion of debt due to late payment in a year. Blockchain technology can help in developing solutions that provide SME’s upfront payment and low cost of interest. The small business accessing the technology has more chances of growth. However, the primary challenge for SME’s is the lack of financial capital for adopting the new technology. Many financial institutions are providing low interest and quick business loans to enterprises for the adaptation of the blockchain technology.
Applications of Blockchain on SME
1. Smart Contracts
Smart contracts are computer programs which can automate different processes and operations. For various financial transactions, small business has to go through a chain of complexities. Smart contracts eliminate the need to rely on an intermediary.
The execution of smartcontracts is transparent, and it cannot be manipulated. These automated contracts are faster and cheaper. They also provide high accuracy as compared to the manual filling of different forms. As specific cryptography is used for encrypting the contracts, the documents remain safe and secure. Smart contracts help financial institutions to access the complete data of organisations applying for business loans. Smart contracts can:
• Remove the Need for Intermediaries
• Automates Bank Payments
• Provides Faultless Accounting
• Protects Copyright Content/Gets Rid of Piracy
• Secures Data
2. Decentralized Cloud Storage
Cloud storage enables remote maintenance and backs up data so that users can access information from any geographical location through the internet. There are multiple advantages of cloud storage like:
• Easy accessibility
• Usability
• Cost Savings
• Data Security
But as many cloud storage providers are centralised, it provides them with a grip over an enterprise’s digital assets. Large enterprises can afford to purchase expensive monthly plans for storage of their data. However, it is not possible for SME’s to do the same. Blockchain technology helps in solving these challenges by decentralising the cloud storage. As there is a redundant distribution of data blockchain offers a solution that is secure, speedy and cost-effective.
3. IoT Networking
IoT has the potential to deliver significant benefits to small-scale industries. It improves agility, collaboration and knowledge sharing in anorganisation. IoT can help small business owners in setting business at a location convenient to their liking and hire employees from distant locations. Thus, increasing the revenue generation. With the help of blockchain, the only glitch in IoT which is security can also be removed. Blockchain also creates a central location where IoT devices can communicate with each other and Update automatically.
4. Digital Identity
More than 43% of the cyber attacks target small-scale industries. Security has become a major concern for the SME’s. It is essential to gather information aboutthe person the company deals with during any communication. The business requires identity assurance for different commercial enterprises.
It may be online trading and banking, process automation, E-commerce and digital authorisation. Blockchain helps in managing digital identities efficiently and securely. The blockchain offers digital signatures that remove any chances of fraud identities.
Adopt Quickly
The industry is going through a paradigm shift right now. While the blockchain technology offers secure and cost-effective business transactions, the small-scale industries will need some gearing up to do before they can adapt to it. SME owners need to focus on acquiring necessary skills and infrastructure.
Early adapters will have an inevitable advantage over the competition with this technology, something which happened with the adoption of internet in the 90s.
Small scale business loans which you can avail online with few clicks can be helpful in starting the adaptation quickly.
