As the hype around blockchain technology cools down, maturing use cases are now crossing the line from niche applications to propellers of growth for startups. Distributed ledger technology is not a buzzword anymore, and some of its applications are well past the barrier of proof-of-concept testing. The University of California at Santa Barbara has recently finished its first curriculum on blockchain technology.
How Startups Can Use Blockchain Technology
As a testament to its growing prominence, more than half of the world’s top 50 universities offer similar programs. However, the clear benefactors of this emerging technology’s applications are startups. Businesses and new ventures are starting to harness the potential of technology in myriad ways. Here are some of the most prominent ones:
It’s no secret that getting access to capital is one of the most formidable problems startups face. Initial Coin Offerings, or ICOs, are now among the most popular ways startups gain access to investors’ money. Selling digital currency has helped launch some of the biggest names in the startup space today. Data collected by CoinDesk shows ICO funding peaking at $6.3 billion in 2018, illustrating how ICOs today have become more complex, robust, and structured. Unlike traditional channels, ICOs have fewer restrictions on the blockchain, as anyone from around the world can invest in your company without paying fees or going through any middlemen.
Smart contracts are the most stable and widely adopted blockchain application today. These contracts reduce unwanted delays in most legal paperwork, as they are automatically executed when the conditions stipulated are met. The applications are endless: from automated payments upon delivery of goods to more complex actions such as payments across a supply chain. While its legally binding nature depends on the jurisdiction, it’s more enforceable than regular contracts as these papers are immutable within the blockchain. Not only that, but smart contracts are also transparent and visible to stakeholders.
Hacking and data breaches have become a trillion-dollar problem today, and startups are not immune to this. In the US alone, these ransomware attacks have cost companies and institutions over $7.5 billion in potential damages in just a year. Maryville University reveals that the demand for cybersecurity experts in the country nearly doubled from 2013 to 2019 – signaling the increased competition over tools and talents specializing in the field. Unauthorized and illegal access to consumer data has plagued many businesses in the past few years, and customer trust is a commodity that startups can’t afford to lose. Blockchain applications that anonymize personally identifiable data are great for startups. The decentralized nature of the blockchain can render hacking a thing of the past.
As small and scaling businesses, startups often struggle with having the right tools to appraise and hire the appropriate talent. Blockchain solutions offer wide applications in talent acquisition today. Relevant parties can now verify claims that a candidate may have in their resume – a tedious yet necessary process – thereby saving the employer much time and resources. This is especially true for startups hiring from other states or abroad, as this will take the guesswork out of hiring and leave less room for taking applicants at their word.
Team member Compensation
The Startup notes blockchain technologies can reduce transfer costs for team member compensation and bonuses abroad. Eliminating the intermediary means faster processing and no traditional transfer fees. Going further, smart contracts can automate team member remuneration and incentives. There’s no denying that blockchain technologies are starting to disrupt almost every industry today. Startups, especially those which are agile and nimble, have the potential to benefit from integrating these technologies into their ecosystem to gain a first-mover advantage.