In a rapidly-evolving, technology-empowered, business environment, trends come and go. Some stick, changing the way we work for the better, while others quickly evaporate. For small businesses, it’s not easy to determine which are temporary and which should be taken seriously.
Blockchain in 2021 is resurgent, but it’s more than mere hype; today fulfilling its potential and creating practical solutions and innovative ways of working across industries. But what about for Australia’s 2.3 million small businesses? Is it just hype or a genuine help, can small businesses benefit, and what is its long-term potential?
Believe the hype
Blockchain is an incorruptible digital ledger used to record transactions. Traditionally financial transactions, but today of almost anything digitally. It reached peak hype in 2017, but while the noise died down, the innovations blossomed and the industry continues to create new use cases that evolve beyond its traditional association with Bitcoin.
Blockchain’s benefits are already numerous, and potentially limitless when considering the scope it has to provide unique yet practical solutions across so many sectors. Chief among these benefits are security, transparency and productivity; all crucial for small businesses.
Spending is forecast to grow substantially across banking and finance, retail, the creative industries, manufacturing, and advertising and marketing. Furthermore, Prime Minister Scott Morrison pledged funds for a blockchain pilot initiative aimed to cut business compliance costs. Blockchain itself is in its infancy, but as use cases increase and policymakers take note, it could come to define innovation for businesses of all sizes for decades.
Blockchain solutions for SMEs today
Blockchain has the ability to reduce costs, increase trust and transparency and safeguard data. But, perhaps, the most tangible benefit for small businesses now is conducting transactions. Not just locally, but opening up new markets by eliminating exchange rates and international transaction processing times.
Through blockchain, there is no ‘middleman’ – like a bank or payments platform – so there are no merchant fees. For businesses, think of all the benefits of tap and go without any fees going to Mastercard or Visa whilst also eliminating the risk of credit card chargebacks. For the consumer it’s all about flexibility. Whether it’s virtual wallets, Buy Now, Pay Later, stablecoin cryptocurrencies, or even Bitcoin, customers want to pay in ways that are convenient for them. Offering every means of payment, from traditional to trail-blazing, is evidence of an evolving, modern business.
Looking to the future
For small businesses, there is a very real, and fast approaching future in which blockchain technology can help them improve multiple business processes. Through it, businesses will be able to access safer, cheaper cloud storage, leverage smart contracts, deploy experiential customer experiences, deliver highly-targeted marketing campaigns, and even use it as an alternative source for raising capital. And because transparency is so fundamental, consumers can trace digital products or services back to the source; a key advantage when the “support local” sentiment is so strong.
As use cases and trust in blockchain increase, there might even come a time when blockchain becomes mandatory in certain engagements. In the US, for example, Walmart has been using it to improve supply chains, requiring – as mandatory – small suppliers to upload data to a blockchain. Walmart and these small suppliers can then analyse production data through the blockchain to streamline the entire process.
Contrary to popular belief, the benefits aren’t restricted to the biggest businesses with the deepest pockets. As the technology evolves, it’s creating unique solutions and tangible benefits for businesses, irrespective of sector and size. As the blockchain industry continues to add substance to the style, the potential could become limitless – small businesses should take note.