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Blockchain Opens Doors

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Blockchain is an emerging technology that aims to facilitate business process efficiencies through utilization of a decentralized, distributed ledger. A distributed ledger operates through a peer-to-peer network instead of conventional, centralized systems and has been used successfully for cryptocurrencies such as Bitcoin. Decentralized systems strive to decrease risks, including fraud, while increasing efficiency in business operations and risk management.

Blockchain has many advantages such as data security, business transparency, and automation. These are some of the reasons private industry and governments worldwide have begun to explore and develop blockchain technology, and its usage is likely to increase in the future.  Companies that take advantage of this technology may begin to experience a competitive advantage over their peers and reduce costs through their operations.

Benefits

One of blockchain’s greatest strengths is its ability to secure data as there is no single point of failure. Data breaches are a significant concern for companies, and although blockchain will not solve every data security concern, it is viewed as a positive step forward.

Blockchain will also help break down traditional business silos and bring value to companies and their customers. Businesses rely on the interaction of many departments and it is common for information to become altered or lost during the process; usage of blockchain can potentially eliminate these pitfalls.  Furthermore, company leaders can have greater confidence that the information they are reviewing and using to make business decisions is unaltered as blockchain technology creates an immutable ledger.

Another exciting usage of blockchain is the development of smart contracts, whereby companies can automate and execute certain types of business transactions via code stored in the blockchain. Smart contracts aim to eliminate steps including tasks completed by intermediaries resulting in greater control and efficiency.

Conclusion

Blockchain has the potential to revolutionize the standards of business with its ability to decrease risks while increasing efficiency. Challenges have emerged -- and will continue to do so -- as companies begin to utilize blockchain technology, but the future looks bright for the continued development and application of this exciting technology.  Businesses should give consideration as to how they could utilize blockchain technology in their day-to-day operations. 


PRTS Intelligence Newsletter - Q3

Derek Notta specializes in Process, Risk, and Technology Solutions (PRTS) with an integral role in numerous Sarbanes-Oxley Section 404 compliance, and internal audit engagements including evaluating the design and operating effectiveness of controls.

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