How Can My Start-Up Use Blockchain Technology In The Real World?
Working out how to structure the digital portion of a new business is difficult enough already. Key questions, like what technology to use, how to design and implement your digital architecture, alongside the development to ensure data security, can become overwhelming when piled on top of everything else. One thing that has recently made its way into modern business development is blockchain technology. Here’s how your startup can use blockchain technology in the real world.
You may have heard of blockchain technology already. You’ve certainly heard of cryptocurrency like Bitcoin.
But the missed opportunity for many new business owners right now is not understanding that blockchain can solve far greater problems than providing alternative payment processing methods.
In fact, some start-ups are building their entire business infrastructure on blockchain technology, and for some incredibly important reasons. That’s why you should also start asking yourself about how your enterprise can benefit from blockchain technology.
So let’s explain why businesses are making this choice. In addition, we’ll look at why blockchain is more than cryptocurrency. We’ll also discuss ways how your startup can use blockchain technology in the real world.
Banging On About Blockchain
You only have to look at any news website to see the growing obsession with Bitcoin and cryptocurrency. But despite its widespread failure to gain mainstream traction, there has been a growing realization that the technology on which cryptocurrency operates is revolutionary.
Cryptocurrency has been the talk of the town for several years now, but the harsh truth is that nearly every single cryptocurrency in existence has failed.
There are multiple reasons for this. A lack of trust, a lack of support, the active hostility of the powerful banking institutions, plus of course government resistance. All of these have meant that cryptocurrency has struggled, and will continue.
That’s not to say the technology is flawed, or that cryptocurrency is doomed, far from it. But the path towards that decentralized financial system becoming mainstream is years away.
But alongside the general failure of most cryptocurrencies, there has arisen huge opportunity.
The opportunity is in the blockchain technology that runs it. Although blockchain technology was developed to run the first cryptocurrency, Bitcoin, the realization has been that this highly scalable technology can be used for a far wider range of purposes.
People may not trust cryptocurrency, but more and more businesses around the world acknowledge the platform underlining it as something that is incredibly trustworthy.
Blockchain Is Not Just Bitcoin & Financial Transactions
A growing number of new and existing businesses are realizing that blockchain has far more potential than simply being the code base which runs the major cryptocurrencies.
One pioneer of this potential is a project called Ethereum. Until recently, it’s been pretty complex to build applications using blockchain technology.
But that has changed with Ethereum. Certain things, like digital voting and media rights can use decentralized tools that the Ethereum platform provides.
Just like Bitcoin, Ethereum is basically a base of code which allows you to create a decentralized application. However, unlike Bitcoin, Ethereum is designed for the development of far more than currency transactions and digital wallets.
In layman’s terms, Bitcoin uses blockchain technology purely to keep track of digital financial transactions, whereas Ethereum’s structure allows the development of virtually any decentralized application.
How Ethereum Can Power Your Entire Business
Until the development of Ethereum, blockchain was about digital currency. Although the development of other applications was possible, they required significant knowledge, time, and resources.
The problem was that the blockchain platform underlining Bitcoin was not created with anything else in mind. That changed when Vitalik Buterin, the creator of Ethereum, looked at blockchain technology from a different angle.
Rather than trying to bolt individual applications onto the existing blockchain technology, he looked at it in a different way. His vision was for a flexible software platform that would allow the development of virtually any type of application.
At the heart of this is the Ethereum Virtual Machine (EVM). It allows any type of software or application to run on the software, regardless of its own programming language.
So rather than a developer having to create an original blockchain for every application, now they simply hook into the EVM, allowing unlimited programs to run from the same base.
So in terms of rapid business development, it means that almost any vision can be turned into a practical reality.
The Power Of The “Smart Contract”
At the heart of Ethereum lays the concept of the “smart contract”. It’s not really a contract, it’s basically a term that describes how computer code can facilitate an exchange, literally an exchange of anything of value.
Which means it doesn’t have to be currency. It can be content, shares, property, membership details, transactions of any type. Once agreed, these exchanges are immediate, irreproachable, and secure.
The smart contract executes as soon as the system validates certain criteria. Because of the blockchain technology, they execute in the same way every time, at the same moment, and with complete transparency. This eradicates the possibility of delays, interference, censorship, or human error.
Because of the decentralized nature of the application, it doesn’t matter what the data exchange consists of, everyone in the network has access to the data. This means that any application built to execute an Ethereum smart contract, has no centralized server, no godlike middleman.
This also minimizes the chances of a hack destroying the entire network, and therefore an entire business, as can happen now with centralized servers. To take down your business, someone would have to take down the Ethereum blockchain network.
Wrap Your Company Up In A Secure DApp
So Ethereum allows developers to quickly create an entire business that runs using a decentralized application, or DApp.
It doesn’t matter what your business model is, or what you need to achieve. If your business model involves digital transactions of any type, then decentralizing it through blockchain technology offers significant cost savings, security benefits and increased end-user trust.
Plus an additional, and often overlooked, benefit is that this is not just about new companies with new ideas.
Developers can transform any centralized network into a decentralized one. This means that existing companies in any area of business, who are concerned about security, scalability and the future, can reconfigure their services to run through a DApp on the Ethereum blockchain.
What Are The Benefits Of DApp
Before we move on to a real-world example, to give you an idea of how a new business can benefit, let’s look at the key positives of developing and Ethereum DApp:
1. Third parties, outsiders, cannot make changes to the data.
2. Because of its strong cryptography and decentralized nature, there is no easy point of failure, or attack.
3. The network is always active, so there is no downtime. It cannot crash, it cannot be compromised.
4. Because the principle of blockchain is consensus, required to trigger the smart contract, it makes corruption and hacking incredibly difficult to achieve.
5. There is also almost no human error because employees don’t have to intervene in any part of the mechanical business processes.
Building A Blockchain Business: A Real World Example
We have talked a lot about the potential of blockchain technology to develop applications that can automatically manage the mechanics of any type of business.
But to paint a picture of how this technology can be employed, let’s look at a new business built around a blockchain-based DApp.
Everyone has heard of stock photos sites like Shutterstock. Photographers and artists upload content for the public. Depending on the license, people can pay a fee and use the content.
However, it’s virtually impossible for people to keep track of how their work is being used. It’s impossible for the site selling this content to find out if people are ignoring the licensing.
On top of that, photographers have found that payouts are low. This makes it almost not worthwhile unless they can sell high volumes.
But a start-up called Photochain is aiming to change all that, by building a decentralized image purchasing DApp.
Because it uses blockchain, people can use cryptocurrency to pay for digital rights, alongside digital traditional payment methods. Moreover, the lower running costs of a decentralized network mean that payouts are much higher, up to 95%, the company claims.
Photochain hooks into CopyTrack. Once the system registers the purchase of an image, CopyTrack uses blockchain technology to continuously monitor usage. On top of that, it continually searches the Internet using decentralized search networks to look for unauthorized usage.
Owners can see when someone used their image without authorization. A member can then flag this illegal usage, and use tools to demand and track payment or removal.
So Photochain is a brilliant example of a “traditional” membership site that uses blockchain technology to disrupt an existing industry.
Ethereum Can Transform Any Business
The truth is that any type of business, old or new, traditional or cutting-edge, can benefit from transforming into a Ethereum DApp.
The benefits are incredible, from security to scalability, to lower initial and ongoing development costs being far lower than existing centralized code and hardware.
Whatever your vision, you really should consider how you can use blockchain technology to build your business. If you don’t, in the near future you may find yourself up against problems that other businesses in your niche who have embraced blockchain are not.