Enterprise Blockchain: How Does It Help Businesses?
With the development of blockchain technology, businesses of all sizes are examining the possibilities of the technology. Blockchain startups mostly use public, or permissionless blockchains, while enterprises turn to private or permissioned ones. The main difference between public and private blockchains is that within a public one, the network’s participants are not known, whereas, in a private blockchain, they are.
More and more businesses from various industries want to join the digital revolution and use blockchain as it advances. Thus, there is demand for enterprise-grade blockchain solutions since banks, healthcare providers, and even governments are experimenting with the technology.
This article will give you a comprehensible overview of the enterprise blockchain, its essential features, and how the technology can help your business resolve complicated issues.
What Is Enterprise Blockchain?
An enterprise blockchain is a kind of permissioned blockchain that is used to expand business processes such as tracking supplies, sharing data inside the company and with business partners, and making international deals.
An enterprise blockchain technology is a ledger that consists of encrypted entities, or blocks, that are stored in chronological order and used as a single data source across a scattered network. This ledger is often accessible to a small group of users, and the enterprise has complete control over the users. As it is possible to set limitations on who can see the company’s data, businesses prefer to use this type of blockchain network rather than a public one.
They also use cryptography to prevent malicious parties from altering earlier transactions and their history. World’s biggest companies, including IBM, JPMorgan, and Walmart, are already adopting enterprise-grade blockchain solutions.
Enterprise Blockchain Features
Businesses strive to solve routine issues, streamline workflows, and start working more efficiently. They are willing to deal with it utilizing essential blockchain features. Let’s explore what those features are.
- Accountability. Every node in the network that has a copy of the transaction history is identified and in charge of its activities.
- Distribution. Enterprise blockchain ledger can be copied and stored on several nodes which enables the distribution of data across the network.
- Immutability. Any verified record on a blockchain network cannot be changed or tampered with by network participants.
- Permissions. The enterprise blockchain is only accessible to authorized users. The network’s owners decide on who to provide access to the network. Thus, there is more flexibility and efficiency in validating transactions.
- Scalability. Enterprise blockchains can hold more transactions at the base layer since they are often less decentralized than public ones.
- Security. The data is protected using cryptography encryption and other security measures to prevent the system from being attacked.
- Token-drivenness. Tokens are used for making interactions on the network and as a medium of exchange in decentralized environments.
Blockchain Applications in Business
Blockchain facilitates rapid, safe, and secure international payments, avoiding the challenges that traditional payment systems face. For instance, when both parties use blockchain, they share payment data through the encrypted ledger in real-time. So, the payment is verified without third parties like banks and processed almost instantly with lower transaction costs.
Document management is one of the greatest issues for companies, especially large ones. Businesses try to manage documents effectively, but it leads to information duplication, massive disorganization, confusion, and multiple errors. Thus, employees waste time searching for the necessary files and distributing them rather than focusing on value-added tasks.
Blockchain allows businesses to have complete control over all the documents that go through the enterprise and instantly verify the essential data about any file in the network, including the file creator, its location, and when it was last edited. All this information is available to all network participants, helping to avoid file duplication.
Regulatory Compliance and Audit
Enterprises around the world find it hard to keep up with constantly changing regulations and compliances. Blockchain provides substantial benefits to all parties involved in the regulatory compliance process.
For instance, blockchain technology can help follow AML and KYC rules for banks. Financial enterprises need to onboard their clients, which is a time-consuming process. They have to collect data and stick to numerous verification rules. Blockchain allows for eliminating these steps and reducing maintenance costs as all the information will be available to network participants in real-time and all changes will be shared across all the connected nodes.
Smart contracts may automate numerous processes such as digital identity verification, content access, money exchange, etc. since they have predefined conditions that trigger certain actions once they are met.
For example, smart contracts may streamline the loan and mortgage management process. The contract can be built to follow the mortgage agreement and handle a mortgage by tracking the frequency of payments. Also, a breach of contract can start the process of a mortgage penalty or any other response as per the agreement.
Internet of Things (IoT)
Organizations tend to optimize their infrastructures by building IoT ecosystems. However, the higher the number of connected devices, the higher the security risks. Integrating blockchain with IoT allows companies to tackle security issues as the IoT smart device can work autonomously without a centralized authority. The network will be creating immutable and chronological records, so it will enable checking how assets interact with each other.
Enterprise-grade blockchain solutions may also reduce costs related to managing and storing data since it will be held on a scattered ledger. In addition to this, blockchain’s distributed nature mitigates the risks of IoT downtime.