Blockchain technology has been one of the notable topics of discussion in the tech community for almost over a decade. The world witnessed the potential of blockchain with the use cases of cryptocurrencies, particularly with the Bitcoin phenomenon. Interestingly, smart contracts introduced better prospects to enable the use of blockchain for business in different ways.
For example, big companies such as IBM have utilized blockchain to create decentralized supply chain management solutions. At the same time, it is also important to think about the possibilities of using blockchain in the case of small businesses. According to a report by Gartner, the business value of blockchain might surpass $360 billion by 2026. How can small businesses tap into the blockchain hype? Let us find out the answers in the following discussion.
Impact of Blockchain on Small Businesses
Small and medium enterprises make up almost 90% of all businesses worldwide and 50% of all jobs. The review of blockchain technology impact on business highlights the role of blockchain in enabling accessibility of finance and digital resources. Small businesses operating in the formal sector are responsible for around 40% of the national income and generate around 7 out of 10 new job opportunities. The number of small businesses in the US alone was 31 million in 2022, which validates the scale of their influence on the global economy.
On the other hand, small businesses have to encounter formidable issues in setting up shop and running their operations due to a lack of flexible access to finance. For instance, SMEs have to apply for loans or seek investors through complicated processes. Banks or financial institutions, and investors might impose certain unfavorable conditions for providing finance to small businesses.
The emphasis on blockchain business ideas has been gaining momentum due to the need to resolve such issues. According to the World Bank Enterprise Survey, the limited sources of access to finance serve as one of the formidable setbacks for SMEs. As a matter of fact, the demand for financing by small businesses in developing economies is almost $8.9 trillion. However, the current credit supply stands at around $3.7 trillion, thereby implying a massive gap in financing. Blockchain technology could help small businesses in adapting to these challenges and grow in the future.
What Are the Benefits of Blockchain for Small Businesses?
Blockchain can serve a wide range of benefits for small businesses, including easier access to financing and better use experiences. Here is an outline of some of the notable advantages of blockchain for small businesses.
Cryptocurrencies as Payments
One of the most interesting blockchain business examples would point to the possibilities for using cryptocurrencies as payments. Small businesses in urban areas could attract tech-savvy customers who own cryptocurrencies encouraging customer retention.
Financing is the most challenging hurdle for every small business, especially with the existing centralized financial systems worldwide. Small businesses could use DeFi lending as a reliable source for obtaining the capital required to start a business. The interesting thing about DeFi loans for small businesses is the effective use of blockchain for removing the intervention of centralized financial institutions such as banks.
Another promising use case of blockchain for businesses points to the decentralization of supply chain management. For example, local grocery stores, farmer’s markets, and restaurants could utilize blockchain for tracing the origins of products. Small businesses could use blockchain technology in their supply chains to showcase the quality of products and ethical sourcing.
The list of interesting blockchain business ideas for SMEs also draws attention to the prospects for using NFTs in marketing. Small businesses could collaborate with local artists to create NFT collections that could be sold benefit to local charities. For instance, a coffee shop could hire an NFT artist to create an NFT collection based on local cityscapes. Such initiatives could help in increasing awareness about small businesses.
Final Words
The notable advantages of using blockchain in small businesses include easier access to finance and increased trust of customers. Interestingly, the answers to “How does blockchain benefit a business?” showcase the potential of blockchain for creating a fair playing ground for all types of businesses.
Blockchain could provide the benefits of automation while removing the unwarranted influence of centralized intermediaries. On top of it, the capabilities of blockchain for improving security of transactions could empower businesses in the future. Learn more about the use cases of blockchain for small businesses and explore practical examples by pursuing blockchain certification & training courses from platforms such as 101 Blockchains to upgrade your knowledge and skills in blockchain technology.
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