Should African firms adopt blockchain technology? Well, this particular technology is a distributed ledger system that allows its users to perform financial transactions online. This technology has the potential to transform how the entire trade process takes place.
These days, most businesses are focusing on providing value to their customers. The success of any business depends on how it serves its customers. Customers want instant access to transaction details. Blockchain systems are designed to provide this to them.
To compete in today’s highly competitive market, companies must offer value to their customers. Otherwise, no matter how hard you work, there will be no money to be made. The problem is that traditional ledgers do not allow this because they are controlled by major financial institutions. The result is that the information entered into the system is not secure.
Fortunately, the ledger being used by the average business is very insecure. It can be hacked quickly and easily. As a result, information about a particular firm might be misused. The best way to prevent this from happening is to make use of a distributed ledger, such as the blockchain. It ensures that all transactions are secured and confidential.
The African market is highly fragmented. Each region has its own culture, language, and financial system. Most business deals are still conducted through local intermediaries. To make transactions easier, the blockchain was developed. This way, all firms in an African region can have access to the same ledger at the same time.
This feature provides instant access to financial data. Because of this, it greatly reduces transaction costs. Financial institutions can save money on operating expenses once they make use of it. This will ultimately lead to more profits for the firms involved.
Since a ledger records all transaction information, it provides an efficient way of tracking payments. Once an investor or lender confirms that a transaction took place, he/she will receive a receipt. This receipt can then be verified by other parties in the future. Financial firms can thus increase their level of efficiency without affecting their bottom line.
Finally, the technology offers a way for African firms to protect their intellectual property. Since the transactions are encrypted, it can be difficult for hackers to intercept them. Once private information is protected, a firm can better protect its intellectual property from competitors. This will ultimately increase productivity and profits in the long run. Such benefits are well worth the investment.
The costs of running an enterprise are constantly rising. Most businesses cannot afford to do so. In addition, about the supply chain, there is a great deal of unutilized capacity. These factors will only compound the problem. If a firm wishes to stay ahead of the competition, it must find a way to bring down costs while improving efficiency.
As an example, the traditional method of keeping tabs on stocks and shares involves a lot of manual work. Manual tasks consume a lot of time and therefore add to the overall operational cost of a firm. This is why a great majority of businesses do not have employees who are tasked with stock tracking. On the other hand, a ledger can be immediately updated.
It is also easy to use. A user does not have to understand any complicated computer code. He/she simply needs to connect his/her computer to the Internet. After that, all that the firm has to do is operate the software.
It is secured. A user will never have his/her details released to third parties. Also, an individual will always know exactly where his/her money is going. Again, this adds to the overall operational cost of the firm.
Once a user gains access to the ledger, all that he/she has to do is send transactions from his/her account to other users within the network. In effect, it becomes possible for firms to conduct their business in the online mode from anywhere in the world. Therefore, African firms can now go global by leveraging the potential that a ledger provides them. There is no reason why businesses in sub-Saharan Africa should not use this cutting-edge technology to strengthen their business model.