Using blockchain can streamline your business transactions.

While you may not accept Bitcoins at your place of business, you may find yourself relying on another product revolutionized by this decentralized cyptocurrency: blockchain. As a business owner, you may have heard references to this nascent technology as banks, stock exchanges and online marketplaces are developing their own blockchain programs in order to streamline transactions. This past May, Nasdaq introduced a blockchain service to clients across the world, promoting an "infrastructure hub" that could serve as a one-stop solution for business transactions.

While your company may not be ready to utilize the tools within Nasdaq's financial hub, there are ways in which the blockchain technology can be scaled to suit your business needs. For example, companies may use the public Bitcoin blockchain to streamline data transfer; however, the computer code can be designed to work for a closed network. Here are details on the program:

What is blockchain?

Blockchain is a decentralized system that stores and shares all steps taken in order to complete a transaction in a secure manner. Participants in this program have access to a digital ledger that is shared throughout authorized computers in its network. These participants are able to see what has been recorded on the ledger throughout the transaction process, ensuring transparency to all participants.

Programmers can tweak the code so that it works in a manner similar to Google Docs, a program that enables individuals to communicate on a single document as they are writing and gain access to that document throughout the world.

How does it work?

Blockchain consists of blocks of information that record transactions that are verified using an algorithm to check the value of the data. Each block is encrypted and transmitted to the next authorized user. This individual completes the assigned task that is then encoded and sent on its way until the entire transaction is complete.

How does it benefit companies?

The technology connects parties without requiring intermediaries. It has a consensus mechanism which requires all participants to agree on the validity of information documented, removing reliance on a central authority. Among its various applications, the blockchain program can help companies digitally track assets, sign contracts or issue stocks.

According to Overstock CEO Patrick Byrne, who oversaw the company's deployment of blockchain technology to issue stocks and bonds, this technology "can do for the capital market what the internet has done for customers."

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