Cryptocurrencies And The Blockchain | Basic Guide
Cryptocurrencies And The Blockchain | Basic Guide
Do you remember the Bitcoin Bowl? I won’t be very surprised if you don’t. BitPay sponsored the St. Petersburg Bowl for one year, but then pulled out because it wasn’t as successful as BitPay had hoped. If anything, it gave football fans who attended the St. Petersburg Bowl a chance to use Bitcoin to pay for concessions and souvenirs at the stadium. However, entrepreneurs can use cryptocurrencies and the Blockchain as a more successful way to market their businesses. Install a Bitcoin ATM and run a promotion. “Triple points on your rewards card if you buy with Bitcoin!” Hand out a fact sheet explaining what Bitcoin is. When customers get used to the idea of paying for their purchases using this Internet funny money that so recently topped $600 in value, that’s when you can start introducing the concept of using Blockchain apps as part of everyday business.
Education is important here. At this point, they probably don’t care what kind of ledger you use as long as you aren’t fudging the numbers too much. However, they do care that they won’t be charged an early cancellation fee at a membership gym because a dishonest manager changed the signing date on their contract. It has been known to happen and customers are very sensitive about fraud on that level. They need to know that your business and its employees are never going to be given a chance to stoop that low. They like to know that they can trust you no matter what kind of business you run. So educating them about what the Blockchain can do for them can become a very effective part of a marketing drive. You may have seen those videos that were basically an introduction to Bitcoin 101. They can explain Bitcoin in plain English to people who’ve never heard of it, except maybe in the newspapers, and they think it’s this weird Internet funny money that seems to go hand in hand with the Dark Web. You can show them otherwise by running your own series of videos that explains that not only can Bitcoin and the Blockchain be used for legitimate purposes, but they can also be used to ensure that customers are dealing with completely honest and aboveboard businesses like yours.
“If our Internet service ever drops below the speed that we guaranteed, our Blockchainbased contract management system will automatically issue a credit on your bill or give you a refund. “We track our sources of seafood on a completely transparent Blockchain supply chain system so that you can see where your seafood purchases are coming from.” This is the kind of thing that can hook customers that are going to be around for the long haul. The gecko is cute, but “15 minutes can save you 15% on your car insurance” is what gets people to check out the Geico website. It’s information that the customer can use wrapped up in a format that’s easy to remember even when the customer doesn’t take action right away. If you can do something similar for the Blockchain, it tells people that you’re using a new kind of technology that can benefit them as much as it benefits you. Customers are pretty smart these days. They don’t fall for the jingle. Instead, they want to know what makes you different from all of your competitors. That’s why you should work the Blockchain apps you decide to use into your marketing campaign.
The Blockchain For Your Bottom Line
The bottom line here is that the Blockchain is good for your bottom line if you care about staying flexible enough to stay relevant. As we’ve seen with fads like Beanie Babies and Pokemon, these things can come and go before you can even blink and you want to make use of technologies that actually have some staying power even when today’s hot sellers become tomorrow’s garage sale offerings. The Blockchain could have that staying power among international businesses simply because it can make financial dealings much more efficient without even worrying about what the foreign exchange is going to do very much. It’s assumed that a Bitcoin is a Bitcoin regardless of whether you spend it in the U.S., France, or Japan.
Read Here: Basics of blockchain
With Blockchain technology, you can send money to or receive money from anywhere on Earth cheaply and quickly. You can form contracts with anyone, anywhere, at any time, with very few worries about whether the other party is going to actually follow through. You can quickly size up the reputation of any party you’re considering doing business with, track down any problems with your supply chain, and check the notary system to see who currently owns an asset. You can do all this with very few worries about a third party getting into the middle of a transaction and denying you permission to use what you own. The Blockchain can handle all this because it’s designed to store data in a transparent, foolproof and cryptographically secured way.
Bitcoin and Blockchain insiders like to use the term “trustless” to describe the idea that you technically don’t have to trust a third party to use the technology. If you have the choice between taking a chance on a third party vendor and coming off as a control freak who insists that everything be done inhouse, always be the control freak. That way, your customers know that you care about controlling as many factors as possible when they trust you with their information. It might sound peculiar that using trustless technology in this way can lead to greater trust from your customers. However, if a third party vendor you trusted to store data is found to be violating data privacy regulations, you will usually be found liable for fines and possible compensation of customers for financial losses they suffered because you chose the wrong vendor. The argument that a third party vendor failed you is unlikely to impress your customers or a jury. So, if you can, hire an expert who can set up your Blockchain applications and install nodes at each of your locations for you.
The coolest part? You can actually use Bitcoin to pay for part of your business expenses instead of simply dumping it on the exchanges. Gyft and eGifter both sell electronic gift cards that can be used to buy office supplies, pay for your next business trip, pick up the tab at a dinner meeting, or do a giveaway as part of an inexpensive social media promotion. Next time you hire a freelancer or contractor, ask them if they accept Bitcoin. These days, it’s increasingly likely that they’ll say yes and send you their Bitcoin address, simply because they care about not waiting days to get their money after the job is done because Western Union and Paypal are taking their own sweet time. That’s a good thing for you, especially if you can get the freelancer or contractor to digitally sign a Smart Contract as part of the process. Then cashing out becomes somebody else’s problem while you use the Blockchain to keep your business running smoothly.
Does The Blockchain Have Any Weaknesses, Though?
The simple answer to this is: Not very many, if you implement the Blockchain as part as an overall Information Technology strategy. The Blockchain is a nearly foolproof way to process and store data, but may be susceptible to fraudulent actors running fake nodes, such as Chainalysis did in 2015 in what was called a partial Sybil attack. It was caught running fake nodes that clients could connect to, but these nodes were not relaying data to other nodes on the Bitcoin network.
This is one of a few security concerns that users of Blockchain applications will have to watch out for. Which means having a way to authenticate that the nodes connecting to your network are valid ones that are transmitting valid data and that the clients connecting to them are valid, as well. While Bitcoin users are accustomed to the idea that anyone with a cheap Android tablet can download a wallet, business owners will prefer a way to ensure that only authorized employees and devices can create new records. Your IT staff may be able to work together with Blockchain developers to create a “Blockchain Active Directory” that manages access privileges for both employees and customers. For those who are not very familiar with Active Directory, it works by organizing users into groups and then assigning access privileges to certain resources to each group. The accounting department might have access to the monthly expense reports, but not the contracts with customers. Managers might have access to analyses of the workflow data so they can pin down bottlenecks. Customers may have the ability to view their contracts, get updates on the status of any orders they’ve placed, and request updates to their own information through a specialized client when appropriate. So Active Directory normally works by sorting access to resources by function. It might even be a good idea to make use of semi-independent sidechains for each function. Very few Blockchain experts are going to recommend using just one Blockchain for all your important data because then you’re running the risk of Blockchain bloat. This means that a Blockchain can require more storage capacity and more processing power than it absolutely has to because it’s trying to store too much data. This obviously becomes a concern when you do not wish to store your accounting ledgers, contracts and workflow logs in the same database.
Instead, Blockchain developers will recommend using separate Blockchains that are often called sidechains because they can run parallel to one another, interacting only as necessary to serve their functions. This can speed up the process of creating new records and searching through existing records, as well as simplify the process of managing the Bitcoin Active Directory. If keeping sensitive data from being stolen is a concern, you might hesitate to implement a technology that promises total transparency to anyone who is interested in inspecting records. On the one hand, such transparency can give you a competitive advantage with savvy consumers who care about doing business with someone who is trustworthy and uses responsible sourcing practices. On the other, a competitor might steal data from your R&D department and use that information to patent a possible future product before you can. That means managing the Blockchain’s transparency wisely.
There are only a limited number of ways to counter the Blockchain’s transparent nature except to implement a robust IT security protocol for servers on which the Blockchain applications are stored. However, Blockchains can be set up so that they don’t interact with one another at all and might not even know that another Blockchain exists, applications can be implemented in a way that allows them to read data on a chain but not write data to that chain, and it’s even possible for one Blockchain ledger to send “transactions” to another Blockchain ledger but not receive “transactions” from that other ledger in return.
Conclusion – Is The Blockchain Right For You?
Bitcoin is kind of hard to destroy. Disabling its network would require the destruction of the entire World Wide Web, and even then, there might still be a functional node in a bunker somewhere. Setting up your own Blockchain system can be as easy as hosting it on a server in your basement if your business is not yet at the point where you have multiple locations. If you can set up more than one server in multiple locations, this has the effect of automating the creation of backups in real-time and speeding up the process of recovering from a malfunction in one of the servers. However, this should not be used as an excuse for ignoring the fact that customers trust you with your credit card information. The real truth is that being a small business should not be used as an excuse for ignoring security. Regulations regarding the storage of credit card information apply to you as much as it applies to large retailers like Target – who, as far as hackers were concerned, had a big fat target painted on its back in the form of millions of credit card numbers. Hackers are even increasingly targeting small businesses because they know that small business owners will often put off implementing appropriate security. There’s just no workaround if you intend to accept credit card payments other than refusing to store that information any longer than you have to. What it really boils down to is the trust issue. Customers trust you with their credit card information. They trust you to be an honest vendor of the products and services you provide. They trust you to make it right if things don’t go as expected. One could argue that the Blockchain can take some of the headaches out of earning their repeat business.
When it’s stored in a way that can’t be altered in any way, it makes it easier for all parties involved to point to what really happened, which makes it easier to resolve any issues. This is an obvious reason to accept Bitcoin payments. While it probably won’t replace credit cards among customers who care about convenience, you’re taking advantage of the elements of Bitcoin that make it possible to accept payments without your customers’ personal information being involved in the transaction. Then you can just log that the payment was received without associating their numbers with their names. The Blockchain can help with management of your critical data when you care about making your IT staff look competent. Nobody’s emails are going to just vanish and, even if an email server has a meltdown, the data will still be recoverable in cases where the hard drive didn’t get shredded. The Blockchain provides decentralization, instant real-time backups, and an even lower risk of losing your valuable data to a hardware failure. If losing your valuable data like sensitive emails is going to lead to any kind of scandal and/or loss of trust, use the Blockchain and make sure all nodes stay up and running as much as possible. Some industries have to deal with customers who are understandably nervous about fraud.
Others have to deal with regulations that govern the handling of records. When implemented wisely, the use of technologies like the Blockchain can reassure customers and regulators that you’re willing to go “above and beyond” to make certain that records are handled appropriately and can’t be altered in any way once they’ve been added to the system. It might sound weird that a trustless technology might help generate trust. However, the most important thing to remember about the Blockchain is that you don’t necessarily have to trust a third party to even know what they’re doing. You can just make sure you have all your important data pinned down on a few Blockchain apps and then just make sure you have somebody around who can ensure that everything is running smoothly. That way, you won’t ever have to worry about things going wrong because your records got tampered with.