Blockchain Applications for Startups and Entrepreneurs

There are so many stock phrases thrown out by bitcoin fans that it’s hard to know where to begin. One of the more interesting ones is “It’s the blockchain that’s really valuable, you know.” And that is probably true.

It’s also much easier to explain than bitcoin. Essentially, blockchain is a sort of record of every transaction that took place involving a single bitcoin. Money moves around in a similar fashion. For example, you put a dollar in a tip jar when you buy your morning coffee. When the barista’s shift ends, he goes for a haircut and pays in cash. That’s two transactions involving that same dollar bill.

Each time a bitcoin is used, a bit of code (called a block) is added to its identification code. The number of blocks is called the height of the blockchain. One can then follow the chain of transactions along the way, and the act of the transaction creates a record. This is unlike cash, where there is no proof that it was you who put the money in the tip jar and no proof that it was your specific bill that was then handed over to the barber.

Real-World Examples of Blockchain Technology Use in Business

With cash, creating a record of transactions (a ledger) is often required by law, but that doesn’t mean all parties involved do so. The barista and the barber both have taxable income from that buck you send out into the world, but that doesn’t mean that they will report it.

Electronic transactions are usually recorded, so if you use your phone’s app to send a tip from your spending account to the coffee shop’s, the bank will have an automatic record of what happened. Of course, one could imagine the sorts of catastrophic events that might lead to the bank losing all of its records. Also, the bank’s records include the names of the parties involved, and there may be situations where records should be kept anonymously.

Blockchain was first introduced in the same paper that introduced bitcoin to the world, but beyond that, there is no need to use bitcoin in order to use a blockchain. And, as the person or persons who developed bitcoin have never been publicly identified, there is no intellectual property issue with using blockchain. As a result, there has been a lot of investigation of its uses by such serious businesses as IBM and McKinsey & Company.

11 Benefits of Blockchain Technology for Small Businesses

Unless your business is using cryptocurrencies, it probably has no use for blockchain – at least not yet. The first time you run into it will probably involve intellectual property or inventory management. For example, blockchain could be used to track who uses a picture, helping a freelance photographer control the usage rights.

Or, it could form a strong chain of custody for the transfer of hazardous materials rather than relying on the signatures (and honesty) of all the people who handle it.

Most startups and entrepreneurs likely won’t deal with blockchain any time soon, unless they are working on a project that involves a much larger company. However, as it diffuses through supply chains, your likelihood of coming across it increases. There are likely to be different asset management and accounting applications used long after cryptocurrency fades from popular memory.

Originally published March 21, 2018.

StartupNation exclusive discounts and savings on Dell products and accessories: Learn more here.

Previous Article
remote work compliance

Tips to Help Employers Resolve Remote Work Compliance Challenges

Next Article

Top 5 Tips to Start a Business With Less Than $1,000

Related Posts
virtual assistant
Read More

How Virtual Assistants Can Benefit Startup Leaders

According to venture capitalist Bill Trenchard of First Round Capital, the average startup founder "works about 300 days a year, 14 hours a day." He should know. Trenchard cofounded and led three companies and, as a VC, advises hundreds of startups. "Looking at the schedule of a typical CEO, a full 70 percent of that...
find a new accountant
Read More

5 Signs It’s Time to Find a New Accountant

As a business owner, you likely want to do whatever you can to keep your company’s finances in check. This is why it’s imperative to work with an accountant that you can trust and count on to maximize your enterprise’s financial health. Whether you have an in-house bookkeeper or you outsourced all of your bookkeeping...
Read More

9 Signs Your Business Needs Rebranding

When you've run a business for quite some time, it can be tempting to update the look and feel of your visual brand identity because you believe it’s the same-old-same-old. By rebranding, you might think that it can freshen your business and even give it a new life. But rebranding isn’t for always necessary. It’s...
succession planning
Read More

Your Business Legacy: Why Succession Planning Is a Crucial Step in Estate Planning

Running your own business is a mammoth task and a considerable investment. Statistics have consistently shown that small business owners have to work longer and harder than the average employee. So, after dedicating so much time and energy to building up a company, it’s crucial to protect it should the worst happen. Almost all of...