The Benefits and Limitations of Integrating Your Business With Blockchain

Blockchain technology has the potential to revolutionize the way that businesses operate and interact with their customers, suppliers, and partners. By providing a secure, decentralized, and transparent platform for storing and exchanging data and value, blockchain has the potential to streamline processes, reduce costs, and increase trust and accountability in a wide range of industries. However, it is important to understand the benefits and limitations of using blockchain in order to determine whether it is the right fit for your business. In this article, we will explore the various advantages and disadvantages of using blockchain technology in the business world, including considerations around security, scalability, and cost.

First of all, let us look how blockchain benefits your Web-2 business and how it can help improve usability, security and efficiency.

• Integrating blockchain makes your business more secure in different ways. First of all, if you offer an authentication system, integrating blockchain wallets as a mean to connect will prevent any attack or unauthorized access and secure user data as a wallet connection is one of the most secure ways to establish a connection between a website and a user. There is an issue where all data on the blockchain is public and therefor it would be harder to store user data privately. This can be solved with the help of cryptographic algorithms such as ECDH, that can store hashed data in centralized databases that can only be accessed and decrypted using the private key of the wallet connected and therefor creating a secure connection for a wallet from the client side without storing any sensitive data on the server side.

• Using a private blockchain for accounting can make the whole process more transparent and create accountability. All funds being transferred to the website are immutable and final and therefor it creates a final answer that can be trusted by all parties that are involved with the business. This process can also be streamlined and automated in order to create an accounting bot that can help store and arrange all transactions in an efficient and well-ordered manner.

• Increases efficiency and reduces costs of the business by removing intermediaries involved in the flow of funds or information. For example, rather than using SWIFT or Visa to process payments that take a good percentage of that transaction, users can directly pay the website and store data using the blockchain by sending some sort of stable coin that is directly redirected to owner (or more than one) wallet. Blockchain also reduces the need for database managers to keep track and arrange databases since the blockchain inherently replaces that role efficiently.

  There are far more benefits that we cannot cover here and are dependent on the industry and type of business we are talking about, and needs further investigation to find the full potential of blockchain for that certain business.

Now, let us address the cons of moving your Web-2 business into Web 3 and some cases where you would not want to go through that path:

• Companies and startups with limited budgets may see a difficulty in integrating blockchain into their business due to the upfront cost of developing and maintaining the technology, smart contracts and backend integrations. Therefor, companies could try to go all in and give it a try or wait until they are able to raise more funds before they can look for a conversion into Web-3. We help with looking into your budget and how you can make it work gradually in order to see if your business is fit to take such a huge step towards the future.

• If your company is a financial company that is located in a country or works with a government that has strict regulations with cryptocurrencies, then you might face some issues with regulation if you try to integrate the blockchain and cryptocurrencies. Our advice would be to talk with a lawyer as each case is different and some may have a solution and some might not.

• Blockchain may be still too complex for some user and audiences and therefor more traditional businesses who do not want to lose their customer base should avoid taking such a large step directly. It is better to gradually start implementing changes or stick with Web-2 until barriers to adoption reduce and their users get more comfortable with using the blockchain.

Finally, I would like to finish with a small checklist I have created for owners to understand if their startup or business would be better off with integrating blockchain technology into their tech stack:

1. Does your business have digital assets, such as data or intellectual property, that is stored in a database and managed by a database manager?

2. Does your business receive and send payments on a consistent basis?

3. Is your business decentralized or distributed in some way, such as having multiple locations or partners?

4. Is there trust needed in order for the business to run efficiently and would be better off working in a trustless manner?

5. Does your business handle data that should be secured and works on avoiding any type of data breaches?

6. Does your business rely too much on processes that could be automated and governed by lines of code?

If you answered yes to most of these questions, then your business would fare way better if integrated with blockchain.

Here at Athena Consulting, we can help with moving your business into the Web-3 ecosystem in the cheapest and most efficient manner possible.

Send us an email now to book your consultation:

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