Blockchain in a B2B setting
Blockchain in B2B settings
In its essence, blockchain stands for decentralized ledger technology. Unlike most types of modern solutions, blockchain systems do not require centralized servers, the cloud, or middlemen to record and store transactions.
Although cryptocurrencies are the most prominent type of blockchain network today, the uses of this technology go well beyond digital currencies and financial transactions. Blockchain can be successfully applied to any business setting where products or services are exchanged by distant parties who require an extra layer of assurance to conduct business.
Key advantages of blockchain tech in B2B
The main benefits to adopting blockchain technology in your business certainly include the unprecedented levels of security, privacy, and reliability that it offers. As all business and financial transactions that take place must be recorded and stored in a decentralized manner by all participants in the network, the risk of data fabrication nears null. In a fast-paced, global business environment where transaction participants rarely know or fully trust each other, the ability to safely and reliably transact cannot be overestimated.
Blockchain B2B use cases
Legal transactions and contracts
Also known as ‘smart contract tech,’ blockchain allows parties to a business deal the desired level of assurance and follow-through. Whereas this role was previously fulfilled by escrow accounts and third-party intermediaries in B2B, blockchain has eliminated the need for those devices by providing a permanent, infallible and unalterable digital footprint of all transactions leading up to a deal’s completion (financial, logistical, or others). In addition to making B2B transactions more convenient and reliable, this way of working also increases the speed and efficiency of completing deals – a key advantage in the global economy.
Similar to legal transaction use cases, decentralized ledger tech can be successfully and efficiently applied to sales, payments, transport, logistics and supply chain operations, to name a few.
3 types of blockchains
Contrary to popular belief, not all blockchain data must be made public and the levels of access and privacy on the network depend largely on an organization’s goals and the consequent setup. The primary types of blockchain networks include:
- Public / open / decentralized blockchains: Here, any user who wishes to participate in this fully decentralized network has equal access and rights to write, send and receive data using a dedicated piece of software. Cryptocurrencies are the most popular type of public blockchain networks.
- Private / corporate / proprietary / closed blockchains: Unlike public blockchains, in private networks access to the ledger is limited to a select number of users who have the permission to write, send and receive data. Private blockchains are typically used in organizations which want to make use of decentralized ledgers in their operations without exposing proprietary data to the world.
- Permissioned / hybrid / consortium blockchains: This type of setup is like the private blockchain, although read and write access is open to a larger network of pre-approved participants. This model works well in marketplaces where participation is limited to a network of organizations (members) who need to transact without compromising on security and privacy.
The technology behind B2B blockchains
For most business leaders, blockchain is the equivalent of an airplane’s black box – a mysterious and elusive technology that few non-technical people comprehend. While you do not need to know the in’s and out’s of it to reap the benefits for your business, it’s important to understand the basics.
Main components of blockchain B2B tech
Software: The means to participating in the decentralized ledger that is blockchain, software apps and tools are an essential part of the ecosystem. There are various programming languages that can be used to develop blockchain solutions – for example, Ethereum-based blockchains are created using the code base of Solidity.
Hardware: As blockchain technology is decentralized, the ledger of recorded and universally valid transactions is independently verified and replicated on each participant’s computer with its respective time stamp. Copies of the entire blockchain are stored by each member and built-in protocols discourage the existence of differing blockchains. This makes records impossible to falsify or alter, rendering blockchain technology reliable and secure.
Implementing blockchain in your B2B network
As we have demonstrated in this post, blockchain technology can be built and set up to meet the needs of your company and your B2B partners. Experienced technology providers like Pegus Digital can advise you on the solutions that are most suitable for your needs and goals.
Don’t hesitate to get in touch for a complimentary consultation.