According to the U.S. Small Business Administration (SBA), small businesses represent 99.7 percent of all employer firms. It is the major contributor to the local economies. It is also imperative to mention the role of Digital Technology to process and execute such a big data. Small industries have embraced the Digital technology. On the other hand, Digital technology has also impacted the business operations and caused a tremendous growth in the industry.
Despite being the key player in GDP, Small businesses face several barriers in financing, scaling, transaction, strategy execution, systems and processes and another regulatory environment. Contrary to this, Big industries have a pool of resources including greater human resources, Engineering, and technology, an economy of scale, higher compensation package etc. Bridging this gap is not an easy task however technology like Blockchain has played a significant role to sustain and grow SMEs.
With a decentralized and distributed technology Blockchain is a public digital ledger uses the peer-to-peer network. Powered by the autonomous server it is more quick, safer and more cheaply than the traditional system. It has the ability to solve the double-spending problem without requiring a trusted authority. So Blockchain is a trusted source of information and it may remove the credibility of big internet giants.
Smart Contracts, SME and Blockchain
High security and reduced transaction cost- these are the prime characteristic of smart contracts. The benefit associated with this protocol is like we can track the payment; get an accurate detail of record, paper-free business, retrievable storage with backups and many more.
Today, SME are at greater risk to get cyber-attacked due lack of their knowledge about vulnerability. Then it comes to a need of highly secure and virtual platform like Blockchain.
With the help of Blockchain smart contract, paper-based business practice are things of past and it is taken the shape of the whole automated process either it is transactional activity, hiring new employees or new contracts. This would result in robust workflow, economical, safe and secure and consistence cash flow for SME.
Implemented by various cryptocurrencies, Blockchain can document all kinds of transaction and data. This may prove like a boon for small and medium-sized enterprises.
There is a wide range of application of smart contract including Cryptocurrency automated transactions. Bitcoin is one of the famous and early stage examples of it.
Based on Blockchain technology, Bitcoin can make a difference for SME
How it is beneficial?
- It is a virtual platform, so there is no any setup cost unlike banks or any other financial institution
- It is way faster, cheaper and secure than any other traditional transaction system
- It is digital currency so SME need not to rely on bank process for financial transaction
Improving Transparency and reducing Transaction cost
Transparency is the primary reason why small businesses rely on this technology. The blockchain is an open source makes it more accessible and developers have the option to modify the code. But what makes it majestic is that it can’t be altered having the secure Blockchain technology. The process such a large amount of data may be an expansive resource. Thus using this technology SME saves a big chunk of their investment.
We know that Blockchain technology does not rely on any anonymous nodes to validate the transaction. It allows peer-to-peer or person-to-person transaction without any middleman and thus saves the third-party cost. Every penny counts and this is a truth for SME struggling to get finance in comparison of resource-rich giant industries.
Safe and secure with privacy
Privacy and security is the biggest concern for the industries today. With the advancement of technology, it is a challenging task in its own to process and manage such a large volume of data. In addition to that to maintain the privacy and handle the consumer’s sensitive data is not an easy task.
With Blockchain based technology and tools, a lot of small levels industries are taking advantage of that. Decentralization feature of it has made it possible to collaborative creation and distribution using peer-to-peer network in a secure way.
A Penny Saved is a Penny Earned
Google, Facebook, and other tech giants spend billions of dollars on cloud infrastructure and this shows our shift to the cloud.
But when it comes to small and medium-size industry cloud may be a pain area for them. So with reliable, secure, fast and affordable technology, Blockchain has proved a boon to SME to take a leap against the giants.
In a nutshell, Blockchain is the new and innovative future generation technology for SMEs to disrupt the market and establish its own digital identity against big rivals.