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Blockchain is no longer just about cryptocurrency. In any case, it shows its true potential. Blockchain has become a catalyst for change in countless ways and has had a significant impact on SMB (small and medium-sized enterprises) operations.
Blockchain technology No longer a mysterious or confusing concept. The organization is very knowledgeable about the application of this technology. However, it is not enough to understand how companies use blockchain. Companies must also consider the financial consequences of this technology. These data are vital to the thinking and budget of blockchain application solutions.
Blockchain: an overview
The key components of the global or national economy are financial transactions and trade activities. The Global Economic Plan controls transactions worth trillions of dollars while serving billions of customers. However, due to the beneficial intermediaries involved in the transaction, both parties need to pay transaction fees. In order to conduct such transactions without the need for an intermediary, the introduction of blockchain technology has proven to be beneficial. The blockchain provides a digital transaction ledger in which all digital transactions are recorded.
In short, the blockchain is a hybrid of shared ledger, high-security cryptography, and an accounting system that processes online transactions.
If deployed in the right direction, blockchain technology has prospects both qualitatively and quantitatively. In addition to proving its value in cryptocurrency, the technology has also benefited in multiple industries such as supply chain, real estate, banking, and finance.
Blockchain technology: cost savings
The driving factor behind exploring new technologies is to complete tasks faster and more economically. In addition, the current digital trend is pushing companies to accelerate and merge with the trend.
Let’s explore how blockchain applications can help companies save costs.
- Third party elimination and related costs
- Crowdfunding
- Minimize operating costs
- Technical customization
- Better compliance
Third-party elimination and related costs
The main goal of inventing blockchain technology is to eliminate third parties, that is, intermediaries. The traditional system of two organizations negotiating real estate transactions involves lawyers, banks, brokers and the government, so it consumes more time and increases transaction costs. The introduction of blockchain technology has made it possible for both parties to conduct transactions directly. Therefore, the direct participation of transaction parties minimizes operating costs and time consumption. In addition, the encryption, timestamp, and anti-tampering features of the blockchain make it highly secure. Anyone authorized on the blockchain network can verify information about transactions anywhere.
Crowdfunding
Crowdfunding is an activity to fund a project by raising funds from a group of people, each of whom usually contributes some funds through the Internet. The decentralized crowdfunding of STO (security token product), ICO (initial coin product) and now IEO (initial exchange product) helped the project bypass some investors. In addition, using innovative methods such as blockchain to raise funds for startups is faster and more economical, while the traditional fundraising process requires a lot of time and service fees.
Minimize operating costs
Deploying a blockchain system can help organizations minimize management expenses by reducing transaction costs. Cryptocurrency payments are made on a decentralized system and under the control of a peer-to-peer network, so there is no need for centralized identity verification. This allows companies to receive payments in cryptocurrency and pay less transaction costs.
Now, thanks to the peer-to-peer encryption system, companies can immediately and economically conduct transactions on a global scale without any obstacles. In addition, the use of smart contracts to automate transactions can help reduce the number of cases where claims are filed in the event of contract breaches. In addition, blockchain helps improve the efficiency of the supply chain industry because tracking products is more systematic and transparent.
Technical customization
One of the significant advantages of deploying blockchain is to provide optimized analysis tools. Companies can use optimization tools to better understand market trends and consumer needs. Blockchain is the backbone of customized analysis tools and artificial intelligence technology. These tools and artificial intelligence technology have made a significant contribution to improving business operations. This involves faster communication and data collection, global coverage, and transparent and reliable systems.
Companies can also upgrade their operations by tokenizing their services to gain consumer loyalty and praise their participation.
Better compliance
Some organizations need digital identification technology and KYC (Know Your Customer) to develop simple identity verification platforms for different companies. This helps to achieve better transparency, optimize data access, and manage IT costs while complying with certification agreements.
Blockchain provides encrypted data storage function, making data highly secure and immutable. Switching to a ledger-based ID system can protect the network from vulnerable attacks or decrypt user identities. Protecting operations and customer data is very important for companies, because any violations will seriously affect the corporate image.
Blockchain application: construction cost
Different factors affect the cost of building blockchain applications. Let us discuss some of these contributing factors.
- R & D expense
- Solution cost
- Migration, training and onboarding costs
- Storage and electricity costs
R & D expense
The popularity of blockchain and its applications has risen significantly, leading to an ever-increasing demand for blockchain developers. LinkedIn’s 2018 U.S. Emerging Jobs ranks blockchain developers as the first among the top five emerging jobs. This shows that these organizations are actively developing blockchain applications.
The development of blockchain applications requires professional blockchain developers.The cost of hiring one Blockchain developer Varies depending on location, skills, experience level and project scope. Developers also need to be proficient in web frameworks and programming languages, such as Golang, NodeJS, Javascript, Ruby on Nails, to develop mobile/web applications that provide accurate blockchain logic.
In addition, developers must have a good understanding of the work culture of blockchain frameworks such as Hyperledger and R3 Corda. Ethereum, And multi-chain. Developers should have some basic knowledge of specific blockchain programming languages, such as Solidity, Sophia, Serpent, Vyper.
Solution cost
Organizations have two options for deploying blockchain solutions, one is Decentralized application (DApp) or enterprise blockchain. Startups with blockchain use case ideas usually choose DApps based on public blockchain platforms such as Ethereum.
Established companies choose enterprise blockchain to improve efficiency, minimize costs, and optimize their business technology.enterprise Blockchain platform Usually private and authorized.
However, it is much more economical to develop DApp than to develop enterprise blockchain.
Migration, training and onboarding costs
When modifying the entire functional system and migrating the database from a centralized architecture to a decentralized architecture, a lot of expenditures are involved. From hardware to software, professionals all need to allocate new resources. Not only the IT team, but the entire company’s employees need proper induction training. Training company employees ensures that employees are well aware of and adapt to new resources and frameworks. All these factors will increase expenditures.
Storage and electricity costs
According to the deployed consensus algorithm, the use of blockchain will take advantage of excessive electricity costs. Agreeing algorithms, such as PoW (Proof of employment) Consume computing power to verify the authenticity of data intended to enter the blockchain. Need to adopt alternative consent algorithms and complex mining equipment to alleviate this. The cost of data storage is also affected by data redundancy. Increasing data load hinders the speed of the system, so more storage space is required and operating costs are increased.
How to learn blockchain
The introduction of blockchain has opened doors of many opportunities for organizations wishing to develop blockchain-based applications. Therefore, correspondingly, demand has also opened the door to new employment opportunities.
Newbies who want to learn blockchain can search for companies or institutions that offer blockchain courses.One of the well-known platforms for learning blockchain is Blockchain Committee. It provides certification courses for professionals and novices.
Several organizations even offer it online Blockchain authentication Training courses.Before signing up Blockchain course, You must conduct appropriate research on the institution. In addition, look for organizations that can provide field experience beyond theoretical knowledge. With blockchain certification, field experience will add extra stars to your resume.
in conclusion
According to a report by the freelance platform Upwork, the global demand for blockchain engineering continues to soar. In addition, various applications of blockchain in various fields such as healthcare, banking and finance, and supply chain have opened up a wide range of employment opportunities for new students and professionals.
Obviously, building blockchain applications will incur high development costs. However, in order to reduce costs, companies should not ignore the long-term benefits of exploring the blockchain.
The greater the impact of blockchain technology on a particular industry, the higher the cost of adoption.
It is undeniable that the blockchain has recently brought revolutionary changes to the technical field. It will become an important factor in the transformation of many industries.
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