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Blockchain technology is behind some of the most exciting and widely-discussed assets of the last two years. Many cryptocurrencies that rely on blockchain technology have been making headlines in recent months, with Bitcoin and Ethereum dominating one financial news cycle after another.

The being said, investors aren’t the only ones who should be excited about the potential blockchain technology carries. There may also be considerable potential for small businesses to use it in certain niches.

I spoke with former MIT blockchain instructor Anders Brownworth about how entrepreneurs and small businesses might begin using blockchain in the near future. In his view, blockchain is a profoundly interesting technology—though it may also be a limited one.

“You don’t want to identify a hammer and then go looking for nails,” says Brownworth. He cautions that trying to leverage blockchain into a tool that works with their market may be more effort than it is worth. At this point, he believes that the most viable way to become involved with blockchain is in the “transaction sphere,” using services that transfer various blockchain-using cryptos into FIAT currencies. However, he also identifies several areas in which relatively small businesses in other sectors could make use of blockchain technology to varying degrees.

Decentralization: An Effective Anti-Corruption Measure

According to Brownworth, one of the largest benefits blockchain technology offers is its ability to verify a transaction without having to trust a single, centralized third party. Most non-cash transactions require an outside party to oversee them—the most obvious example being that of a credit card company. However, blockchain’s ability to cut out the middleman could be of particular use to companies that deal with sensitive information, where corruption or data leakage could be a concern.

Brownworth uses tracking shipments between companies with conflicts of interest as an example. “A centralized private system could cause concerns,” says Brownworth, “because there would be no way to make sure the shipment numbers aren’t changed.” Since blockchain technology would be able to verify or refute these numbers thousands of times over, companies that use it could gain an edge by reducing the risk of fraud in these areas.

User Authentication: Making Peer-to-Peer Services Safer

Brownworth also identifies the potential for blockchain technology to be used in services that have a need to authenticate users. One example would be a dating service, where users want to know that the people they connect with are who they claim to be. Blockchain technology could be used to create a superior authentication system, where users would have to be verified along a chain by different platforms such as their email or social media accounts. However, he suggests that this would be “much more valuable” to credit rating agencies and medical providers, who need to protect their clients from identity theft.

While these innovations could take time and be difficult to implement, the potential they offer to applicable businesses could be well worth the wait. In the meantime, businesses in these sectors should continue researching blockchain and keep their eyes peeled for new developments. Doing so could be the thing that keeps your company ahead of the curve in the future.

To explore the results of an Aberdeen study on blockchain in manufacturing, download this comprehensive report: Blockchain in Manufacturing: The Savvy Answer the Clarion Call for Better Traceability

 

Nick Rojas is a self-taught, serial entrepreneur who’s enjoyed success working with and consulting for startups. He concentrates on teaching small and medium sized enterprises how best to manage their social media marketing and define their branding objectives.

 

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