how blockchain can be used in business

How Blockchain Technology Works & How It Can Be Used in Business?

Blockchain is one of the most trending technology in tech town also becoming popular among various people across the world. Maybe you have also listened to this, and most probably in the cryptocurrency world. But now it’s being used in other areas helping business owners utilize its advantages.

In the cryptocurrency trading world, transactions are done on Blockchain technology. And, you need to understand this, how it works and how it can be used in business. Hence, we brought here how Blockchain technology works with an example to make it easier to understand for you. You can also find here how other businesses can use or integrate this technology into their trade.     

What is Blockchain Technology?

Blockchain is a chain of blocks created for every action or transaction that taken place in that particular system. It is also known as a Digital Ledger in which transactions & other activities are recorded and stored across multiple nodes or a peer-to-peer network.

These records can then be accessed securely without the risk of data corruption or privacy concerns. Mining, validation of every transaction in cryptocurrency trading is done on the Blockchain making one of the best use of this technology. 

Also Read: Top 10 Cryptocurrency by Market Cap You Can Invest in 2021

How Blockchain Technology Works?

Blockchain is mainly a decentralized public network allowing its users to store and securely transfer information and currency instantly.

The term Blockchain is derived from – how the data is stored in ”blocks” of information and then linked together in a permanent “chain.” When a new block is added to the chain, it makes the previous blocks even harder to modify, which helps each block become more and more secure over time.

And because of this feature Blockchain technology is considered unique and valuable for many different types of business applications especially in terms of security and transparency to users.

Understanding Blockchain Technology with Example

To better under how Blockchain works let’s take an example – Suppose you (ABC) want to transfer money to your friend (XYZ), this online transaction will be recorded in a block and this block will be distributed across the network in an encrypted manner which is known as Decentralization of Data.  

Now the entire network makes sure that the transaction is valid by cross-referencing the data. Which is later connected to a chain of blocks which themselves have data in it and created a permanent block. 

When you transfer the money through Blockchain supported system, the ownership of this money will be given only to your friend (XYZ) when this transaction is completed and validated by the members.  

How Blockchain Can Be Used in Business?

Big business owners, especially small business enterprises or tech startups can develop Blockchain technology for themselves. While small business owners may use Blockchain technology which has been already developed for border markets. 

Blockchain technology has the potential to make your business process easier and below brought two ways how Blockchain can be used in businessby implementing the following systems.

1. Digital Payments

Cryptocurrency users are using Blockchain technology to make online payments. Yes, maybe you have listened in many countries people are now accepting Bitcoin as payment. Even recently El Salvador a First Country in the World declared Bitcoin as Legal Tender to accept as a currency for payments. 

The trading and transactions cryptocurrency market is done the Blockchain technology. And now there are many cryptocurrencies in the market people are heavily investing with lucrative gains.

Also Read: Should You Invest in Bitcoin and Cryptocurrency: 5 Things to Know

Since the Blockchain is used in cryptocurrency, it became popular due to its transparency, authentication, and validation of transactions to avoid any risk.

3. Smart Contracts

Blockchain technology can be used to create, verify, and enforce the contracts executed between the users. Business organizations can use it to pay bills and employees, create insurance policies, invoice customers or clients, handle inventory fulfillment, or any other transaction-related activity.

2. Data Compliance

To protect and keep the business data secured Blockchain technology can be used. And while complying with the new rules and regulations to keep users’ data secured, Blockchain offers the facility to verify transactions without knowing the identity of the user. This can offer a user-friendly experience that is more secure and less prone to hacking.

Web development companies providing the Blockchain development services are using this technology to create the Blockchain application, enterprise-grade dApp, asset exchange, Hyperledger, smart contract, and custom token development for different business owners.

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