Blockchain is spreading like wildfire, and its use cases are growing exponentially. Below you can see just a small portion of examples proving this statement:
- Blockchain has become so influential that Malta even proclaimed itself as a ‘Blockchain Island’. The small archipelago sees great potential in this technology and already devises a strategy to fuel innovation in the sector.
- Walmart is going to use blockchain to track leafy greens.
- IBM spends an estimated $160 million on blockchain projects per year.
- Facebook has an entire division dedicated to blockchain development and is supposedly developing own cryptocurrency.
- Bank of America has procured the most blockchain patents in the U.S.
So, we have Walmart, the world’s largest retailer; IBM, one of the biggest tech companies ever; Facebook, a social media giant with over two billion active users, and Bank of America, the second largest bank in the U.S. Starting to notice a trend?
However, these are the largest corporations in America. Where are all the little guys? The backbone of economies around the globe, the small businesses?
Is blockchain reserved for the largest enterprises only? Taking the list above into account, it might seem like it. However, blockchain can also be used by small businesses to save (or raise) money in various ways.
Funding a Startup Through an Initial Coin Offering
Initial Coin Offerings (ICOs) were all the rage in 2017 and 2018. At that time, it even seemed that cryptocurrency investors were throwing their money at anything with a pulse.
Eventually, this led to thousands of people getting scammed and millions of dollars lost in the process. Investors have become wary of new ICOs. However, when done right, these offerings tend to bring benefits for startups.
ICOs have become an excellent way for small businesses to raise funds for new projects. By offering services through the sale of tokens, companies now have an alternative to seeking loans from banks. Multiple startups have raised millions and at times even billions of dollars from investors.
Additionally, ICOs provide small businesses with the tools to create their own reward programs through the distribution of tokens which can be used for future services.
Utilizing Blockchain as a Notary Service
Blockchain made possible the development of applications which can be used to notarize proof of ownership for all varieties of documents. Stampd.io uses public blockchains to timestamp various forms of content, from legal contracts to digital creations. It is used in law, design, research, media, and engineering.
Companies that consistently need to notarize documents might find these applications extremely beneficial. Often, a mobile notary can cost up to hundreds of dollars, which might not seem much for a one-time thing. However, when stacked, these costs can add up to significant amounts.
Partnering with Big Businesses
As stated earlier, Walmart has required all of its suppliers of leafy greens to upload its data to its blockchain. It might seem like a headache for these small businesses at the moment, but it is exposing them to blockchain technology and its use cases.
The joining businesses mostly have all of the perks blockchain offers to them without extreme prices. With data organized through a blockchain, farms providing Walmart’s leafy greens will be able to analyze production data through the blockchain to streamline services that often take a significant amount of time when performed in a traditional manner.
Using Blockchain for Employee Payments
Blockchain can also be used by small businesses to expand their potential employee base. Through blockchain, money can be transferred in cryptocurrencies all over the world in a matter of minutes and for lower fees than more common money transfer services (such as wire transfers or PayPal).
This means businesses can target prospective employees from all around the world. Payroll services can also be automated with blockchain. Since transactions are recorded to a distributed ledger, all the information will be kept secure and documented.
Beating Large Organizations with Opporty
Opporty is currently building a blockchain protocol to give small businesses affordable access to blockchain technology. It utilizes the Ethereum blockchain to provide small businesses with Ethereum smart contracts, decentralized escrow, and lead generation opportunities. Although still in development, the product has sparked much interest from small businesses in the U.S., UK, China, Australia, and Canada.
Cryptocurrencies proved to be another way for small businesses to raise their profits. In the press release, Opporty founder Sergey Grybniak said, “Small business owners now realize that cryptocurrencies can give them a head start over their competition. I am proud that Opporty enables anyone to use cryptocurrency plus all the benefits of blockchain.”
Sharing Data via Blockchain
Andrew Ma, CEO of LemoChain, discussed how small businesses could utilize blockchain for data distribution. Blockchain allows sharing bits of information anonymously. The idea is that eventually companies that sell data, such as Facebook, will at some point no longer be able to do that due to the decentralized nature of blockchain.
Through blockchain, smaller companies will be able to access data on a broader scale. They will also be able to share it, which will propel their collaboration and help access different markets.
For example, if a small business has 1,000 customer transactions recorded on its blockchain, it can choose to take various portions of that information (such as the items purchased) and either share or sell them to other small businesses. With blockchain, data distribution will be easier and more prevalent for smaller companies.
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Managing Data on a Blockchain
Products like Amazon Web Services and Google Cloud are often too expensive for small businesses to afford. The reason why they tend to cost so much is that their data is centralized and stored in data centers, which cost vast amounts of money to maintain. Plus, these overpriced services are not nearly as secure as you would expect them to be.
Blockchain-based options are often cheaper and more protected. Storj is such blockchain-based cloud storage service expected to launch in early 2019. It is notably less expensive than centralized storage centers, easy to use, and secure thanks to the encryption function.
So, instead of using Amazon Web Services or Google Cloud, small businesses can now store data in a much more secure and affordable way.
The Future of Blockchain for Small Businesses
At the moment, the world’s largest corporations seem to be the only ones benefiting from blockchain because they have the money and data to spare. At the same time, blockchain appears to be still too new and expensive for small businesses which don’t have the data nor a supply chain long enough to even think about using the technology.
However, this all is bound to change. Like the internet and other major technologies, which required a substantial amount of money to work with in the first place, blockchain will eventually become much cheaper and thus more accessible.
So why not let IBM spend millions of dollars a year on blockchain, while smaller businesses can benefit from these findings in the future?