The majority of media headlines focusing on blockchain technology revolve around the performance of something known as cryptocurrency. The extreme volatility of this type of currency closely resembles a rollercoaster as bitcoin gained a $19,390 high in 2017, only to plummet to a low of $5,900 in the beginning of 2018. Based on this information, the consensus among various entrepreneurs is that the future of blockchain technology extends beyond bitcoin. In fact, the consensus is that blockchain will influence all areas of business ranging from operations to accounting.
The question remains, what is blockchain technology and why is it such a vital element in the future of online business? Blockchain is a form of digitally distributed ledger or lists of entries, similar to a stock ledger, where various participants maintain networks of computers. The technology utilizes cryptocurrency to process and verify any interactions on these ledgers as the ledger is protected using encryption and coding. This article will provide information on how blockchain technology can be used to change the way we do business in the 21st century.
Area #1: Accounting
Accounting is one of the textbook case studies for a business area where blockchain technology can be highly beneficial. The tax code is an overwhelmingly complex factor varying from state to state, and the need for accuracy in this area is paramount. Blockchain technology can effectively manage all of the above and more.
According to a recent edition of the Journal of Accounting, Ken Tysiac wrote that the transparency of blockchain ledgers offers visibility of all transactions approved by users; thereby, decreasing the auditors’ work with validation of transactions. Of course, this allows auditors to focus more on investigation of anomalies and controlling accounts. Moreover, the opportunities emerging for CPAs to utilize blockchain technology expand in the assurance services, such as sustainability and cybersecurity.
While some entrepreneurs are making millions by using cryptocurrency, winning the lottery, or inheriting large amounts, there is a chance for the rest of the population to increase their revenue using blockchain technology. Blockchain technology increases the potential of anonymity and confidentiality for users; thereby, reducing any likelihood of financial fraud or manipulation in one’s accounts. According to the Ethereum smart contractors, the managers of Prime Ball, this will be the first fully decentralized lottery platform and all winning results are publicly recorded and distributed without any third-party involvement – a true shift from the typical ‘scratch and win’ cards.
Area #2: Marketing And Advertising
According to Juniper Research predictions, advertisers will lose approximately $19 billion to fraud in 2018. This figure represents advertising on both mobile and online devices, and further predicts a loss of $44 billion to fraud by the year 2022. Fortunately, blockchain technology underlying cryptocurrency and bitcoin can reduce the chance of financial fraud in both the advertising and marketing arenas.
According to Amir Jan Malik, the digital marketing specialist at Accenture Interactive, companies view the principles of blockchain technology to be a fraud preventative measure that can be applied to programmatic media purchases. By utilizing this blockchain system to govern budget spending and monitor purchase, advertising departments can track their investments from the initial transfer of media budgets to the final publication by the media owner.
Area #3: Human Resources
Professionals in human resources departments are responsible for planning, directing, and coordination of recruiting new staff within a company. This department consults with top executives on strategic plans, and will often handle the employee-relation duties tied to compensation and training. Do not let the “human” terminology in human resources fool you as there is a large proportion of technology behind all of the HR procedures.
According to reports by the Society for Human Resource Management, blockchain technology will modernize hiring staff in the 21st century; thereby, allowing human resource departments to verify the credentials of candidates and current employees. The society predicts blockchain systems will reduce any chance of third-party businesses offering inaccurate data about employees or candidates as HR will have increased control over information being presented.
It should also be mentioned that blockchain technology will affect the payroll department in HR with its greatest impact being on multinational corporations with foreign staff. This technology can manage the back-end for simplification and standardizing payments in foreign currencies. According to the COO of IRA Bitcoin LLC, Travis Parker, blockchain technology is altering how companies are paying employees and how staff is saving for retirement. This means they are able to diversify their investment portfolios from dependency on US-dollar financial products.
Area #4: Cybersecurity And Information Technology
One of the most highly publicized breaches at Target, Equifax, and Yahoo is the issue of cybersecurity where user profile information was leaked to hackers. Nowadays, companies are increasing their security focusing on the protection of computers, networks, data, and programs from damage, unauthorized access, and cyber-attacks.
According to the managing director of Deloitte US, David Schatsky, blockchain technology has the potential to revolutionize global cybersecurity. He states that this type of technology is a means of recording transactions in a secure, highly resistant, and transparent way avoiding any outages or hacking. The features of blockchain are similar to cybersecurity systems, but the technology from www.path.network offers more advantages in that it protects critical information from a decentralized system with verified identification procedures. This means that the user needs to verify their identity before they are able to perform a transparent transaction on anonymous data.
Area #5: Management And Operations
Founded over one century ago, Kodak has struggled to compete with the 21st century’s smartphones. Using blockchain technology, the Kodak management platform has found a means of reinvention utilizing an encrypted ledger for rights ownership. Photographers are now able to register their work and license it within the Kodak platform. This ensures that professionals can take part in the new economy of professional photographer; thereby, securing payment for licensed work.
In conclusion, blockchain technology is altering the methods whereby companies are conducting business in various industries. The technology forms operational efficiencies presenting new opportunities to the businesses. Using the information above, you can determine if blockchain technology is the most suitable option for your company’s needs.