The blockchain movement is swinging at a very rapid pace. From Deloitte’s 2019 Global Blockchain Survey of 1386 senior executives from countries around the world, fifty-three percent of respondents identified that blockchain technology has become a critical priority for their organizations in 2019— a 10-point Increase over last year. This clearly indicates that blockchain is well worth the hype it receives.
Blockchain is gradually ascending to become an indispensable tool for business growth and improved productivity. However, as pivotal as blockchain is to the modern-day business, quite a number of business executives do not understand ways in which this powerful technology can help their businesses grow. The earlier businesses begin to understand and explore the possible use cases of blockchain for their operations, the better it is for them.
Possible Applications Of Blockchain For African Businesses
Blockchain can be applied in several ways to help businesses optimize their activities and achieve the growth they desire. Here are a few ways blockchain can help achieve this.
Use of Smart Contracts
The use of smart contracts can help African businesses overcome the many issues associated with trust and middle men in Africa. With the use of these self-executing contracts, African businesses no longer have to worry about being defrauded by other parties and are guaranteed of payment after their products or services are sold to a customer. This will happen without the need for lawyers or middlemen. Smart contracts can help businesses save the costs associated with intermediaries such as banks, legal services, etc. This will, in turn, lower operating cost, save the time and paperwork associated with traditional legal binding of transactions, enhance trust, and improve transparency of all business transactions.
Cryptocurrency for improved and more efficient payment systems
Since cryptocurrencies are decentralized, they eliminate the need for verification of transactions by financial institutions such as banks, thereby, saving a business the money associated with these services. Additionally, cryptocurrencies make it easier for a business to transact with customers all around the world without any extra exchange fee attached to foreign transactions. A cryptocurrency like Bitcoin, provides a universal payment currency for a business, thereby, making it easy for African businesses to accept payments from everywhere around the world, via a single currency. With cryptocurrencies, payment transactions can be processed at a much faster speed, occuring in near real-time. The high transaction speed that cryptocurrencies offer can help African businesses provide an improved overall experience for their customers.
Blockchain for efficient supply chain management
The application of blockchain in efficiently managing the supplychain of African businesses is very promising. Companies like Coronet have begun to leverage blockchain within the supply chain. Several African businesses involved with the manufacturing of products experience difficulty managing the complex supply chain. A single product may contain parts from multiple sources around different locations and can travel through several hands before getting into the hands of the manufacturer. This makes it difficult for manufacturers to verify the exact source of these components and track the movement along the supply chain. Blockchain can be used to solve this, as well as many other issues associated with the supply chain in Africa. Blockchain offers a decentralized ledger which can be used to record, track and manage activities along the supply chain. This simplifies the supply chain and also eradicates disputes between suppliers and producers in the event of an exception. With blockchain, businesses can enjoy a more transparent and efficient supply chain.
Blockchain for Data Security
https://decentralize.africa/how-blockchain-can-improve-data-security-in-africa/Data is the new oil in today’s business world and every business seeks to maximize the data they have to help them grow. However, the security of any company’s business data is threatened by hackers and other security breaches. Interestingly, the solution to this is one of the reasons why blockchain was created. Via blockchain, African companies can store their data on a decentralized ledger which is extremely secure and immune to security hacks and threats.
These businesses will not need to spend a fortune hiring cryptographers and data security experts to keep their data safe. In addition to providing a secure storage for business data, the use of blockchain also eliminates the cost that would have been spent on hiring experts to ensure the safety of their data.
Blockchain for fundraising
The availability of capital and sufficient funds is pivotal to the growth of every business venture. In Africa, a large percentage of startups fail due to insufficient funding. Blockchain can provide African businesses with access to more funds, thereby, ensuring their survival and growth. Instead of relying on bank loans or venture capital, which may not be easy to get, blockchain allows businesses to receive funding through an Initial Coin Offering (ICO), without equity commitment. This means that businesses do not have to share a portion of their company to receive investment funds. To raise funds via an ICO, companies simply need to create a digital token and sell it to investors from anywhere in the world, in exchange for cash or cryptocurrencies. Both the investors and the businesses have something to benefit from an ICO. Although an ICO has its own limitations, it still offers an innovative alternative for African businesses to raise funds.
In recent years, the African business scene has attracted a lot of global attention. Africa needs a lot of its budding innovative startups to take the continent to the next level of economic growth and development. However, all these cannot occur without the internal growth of these businesses. The various ways in which blockchain can help businesses achieve and sustain growth is worth exploring to unlock a massive and sustainable growth for local businesses and even the continent at large. To achieve this, African entrepreneurs must begin to embrace the application of blockchain in their businesses.