In early September of last year the World Economic Forum, along with global management consulting firm Bain & Company, issued a report  that confirmed what many had believed all along.
Blockchain is good for business.
Distributed Ledger Technologies have been touted as potentially playing a significant role in expanding the horizon for worldwide trade to include enterprise that would otherwise be difficult to carry out.
Blockchain technology is spearheading this movement, with a large percentage of Fortune 500 companies, ranging from retail, finance, and automobiles to airlines already recognizing the potential.
According to the WEF report from last year, the Asian Development Bank calculates the global trade finance gap to be currently at around $1.5 trillion, with growth to $2.4 trillion expected by 2025.
This figure is calculated without taking into account the increasing popularity of blockchain technology, which is believed to be able to reduce the global financial trade gap by a not inconsiderable $1 trillion if more commonly used in the coming five years or so.
The answer is everyone. A reduction in trade deficit by $1 trillion has to be considered a good thing in general, but if we see the technology implemented as it could be over the timeframe as mentioned earlier, the main benefactors will be SME’s along with emerging markets  including the likes of Korea, Brazil, and India.
It’s generally believed that emerging market development is vital to the global economy because they drive growth, and blockchain technology could be the spark that ignites much of the increase over the next few years.
Gerry Mattios, Expert Vice-President at Bain & Company, and a principal contributor to the study commented that “the benefits of adopting DLT in trade will affect everyone from banks to companies to governments to consumers.
“But action has to be taken in a collaborative way and with an ecosystem approach in mind. Individual actions won’t bring the expected results.”
We’ve seen some pretty big name players announce interest in researching blockchain technology, including the likes of Airbnb, Rakuten, JetBlue, and Daimler. The interest shown by these companies differs significantly, with some still being at the research stage, while others have actively acquired blockchain startups or have made blockchain-related strategic investments.
At this stage, many of these companies are playing their cards relatively close to their chests, but that could change once we see blockchain technology-led projects move into the mainstream.
Okay, so we know that blockchain technology is a big deal, and we know it’s of enormous benefit to businesses across a whole host of industries.
How does it work though? What can it do for your business?
Most small businesses look to data for essential insights into industry trends, and in the past, it was commonplace for those SME’s to purchase the information they needed from larger companies.
In today’s world Facebook is one of, if not the biggest owner of customer data. Many see large companies like Facebook and Amazon as something of a monopoly.
Blockchain technology could be the key to disrupting this hold that a small number of large entities have over specific industries.
The advent of this new technology opens the door for SME’s to find their information from other sources other than the industry giants by purchasing blockchain-verified data sets from smaller sellers.
In the past, there was always an issue with exactly how reliable information from smaller sources could be. Corruption and manipulation was a fear that many SME’s had in purchasing information in this manner.
With an immutable ledger attached to each set of data that an SME chooses to purchase any changes to the data contained within will be transparent and verifiable.
An example of blockchain technology at work in the data industry would be a marketing agency who intends to target male consumers aged 25-35 years old and who live in New York.
At the moment such a company would traditionally only have a small number of resources it could do business with, but in the future, we may see them able to directly contact and purchase from companies who specialize in data from a given geographical region, age group or other determining factors.
Essentially, it would mean cutting out the often-expensive middleman altogether.
A smart contract  is a self-enforcing and self-verifying contract contained within a blockchain ledger.
More traditional forms of contract involve a number of parties and also involve manually filling out and signing a lot of forms.
Often this can lead to mistakes, and even omissions, which could end up costing one of the parties involved dearly.
Smart contracts remove much of the time-consuming process altogether, as they are self-executing and self-enforcing.
SME’s can take advantage of smart contracts in many ways, including facilitating agreements pertaining to finances, content, and property.
Anything of value.
The benefits of smart contracts include transparency, clearer communications, accuracy, efficiency, trust, and security.
The days of SME’s having to fork out substantial sums of money for banks, lawyers, witnesses, and various other intermediaries when it comes to contract execution are almost over.
In the coming years, we can expect to see even more investment in blockchain technology, including acquisitions and strategic investment that will see the technology become more mainstream than ever before.
The more use cases we see, the more the technology will come to be understood by the management teams who would be looking to implement these solutions in their businesses.
The technology to even out the playing field between SME’s and their larger competitors is here, but for many companies, the task of implementing this new system can seem daunting.
Having a highly qualified company who can help you make a smooth transition to a system that will change the way you work for the better, saving both hours and money, is the answer.
At DLT Software, we provide solutions for a number of industries, including FinTech, banking, retail, e-commerce, and SaaS products.
Get in touch today to see how we can help your company prepare for the technology that will change the way the business world operates.