Many people think blockchain technology is only applicable to cryptocurrency. However, it is so much more than that. Cryptocurrencies are where blockchain originated, but as it has evolved, it has become a technology that simplifies transactions in many settings including B2B payment avenues.
By the use of encrypted distributed ledgers which offer trusted actual verification of exchanges without the need for intermediaries such as correspondent banks and clearing houses, blockchain technology guarantees to facilitate fast, secure, low-cost international transactions.
Here are some of the benefits of Blockchain;
- More Centralised Record Keeping — Manual payment methods can make it easy to lose track of records and proofs of payment, such as receipts and invoices. Even digital payments are subject to this. It’s simple to lose track of payment history if you don’t use a financial control software solution.
- Improved Security — Because blockchain coding is immutable, any changes made cannot be reversed. There will always be clear evidence established for every transaction, and neither side can change or alter that proof after the fact. It also prioritises safety. While other online payment methods are easy to steal, hackers will have a much harder time accessing blockchain payment processes. That is because it is on a shared system, and accessing it from outside of that system is quite impossible.
- Zero-Third Party Involvement — Cryptocurrency, among the most revolutionary payment systems to date, is powered by blockchain. The blockchain is essential to cryptocurrency because it provides a decentralised source of information. In other words, no third-party agency is engaged in monitoring and controlling cryptocurrency transactions. It allows online investors to trade digital currency on a worldwide scale by bypassing middlemen and authorities.
While this ensures cryptocurrency stays current, it also allows the two parties involved in a transaction to communicate directly. Because the transaction is no longer completed by a third party such as a bank or a loan operator, both parties to the transaction are aware of how the payment is just being processed.
- Data Transparency — On both sides of a B2B transaction, blockchain technology supports improved confidence. Two elements of blockchain help with this: its immutable past and file-sharing capabilities. Both the vendor and the buyer can know when their transaction is finished since blockchain has had an immutable record that updates for every transaction. There will be no more doubts or errors in bills since one party may hold the other accountable by referencing the blockchain.
- Faster Payments With Smart Contracts — Among the most practical applications of blockchain is the ability to employ smart contracts to speed up payment procedures. These contracts are implemented as “if/then” situations in the blockchain code.
Cryptocurrencies are digital assets designed to function like traditional currencies but with blockchain benefits such as decentralisation and a public ledger. Unlike traditional currencies, cryptocurrencies allow for fast, safe, and global transactions, which can be made use of through a fiat on-ramp services provider such as OpenPayd. Ultimately, cryptocurrencies have fueled the growth and development of blockchain, as crypto relies on its network to exist.