Whatever happens to controversial ‘virtual currency’ bitcoin - and some predict the worst -  the technology upon which it is built is unlikely to disappear. Blockchains are dispersed digital ledgers with no central control. Transactions are recorded in a network of identical ledgers, making them permanent and immutable. This creates the transparency and confidence that allow cryptocurrencies to work, but cryptocurrencies are only one of the potential applications of blockchain. Many of the others could directly affect business in years to come.

Here’s what you need to know…

Smart contracts

A blockchain agreement exists between all permitted parties in a decentralised ledger. That rather arcane sentence has a wealth of implications. Because it is permanent and immutable, blockchain allows for the creation of smart contracts, ensuring - for example - that you get paid by the company you are contracted to as soon as you provide the services stipulated in the contract. On the other side of the coin, it ensures that you only get paid when the agreed services are delivered. The whole process is transparent and automated, and while smart contracts might not end commercial disputes altogether, they have the potential to hugely reduce the time companies spend chasing either payments or undelivered goods or services. Quite simply, it’s very difficult to dodge the stipulations of a smart contract.

Streamlined management

In many companies, project management is a long and tedious process. Documents have to go back and forth between divisions and individuals, awaiting approval or improvement. The more to-ing and fro-ing there is, the more chance for errors and discrepancies to be introduced. A blockchain ledger automates the whole process, making it transparent and easily tracked, and notifying everyone of changes along the way. It could push a project to the next stage automatically when certain agreed stipulations are met. The result is a smoother and more efficient project management process.

Cheaper, faster payments

If you accept payments from abroad (or make them) blockchain can make the process easier, faster and cheaper. Blockchain payments are secure and transparent, and do not have to involve third parties. Which means that third party fees can be eliminated from the transaction. And because the blockchain ledger is almost impossible to tamper with, and payments only have to be authorised by the parties involved in the transaction, the cash should reach your company accounts much sooner. That last point is true for any payment, not just those from abroad. Imagine a world of near real-time payments for your products and services.

Indeed, the technology is so promising in this area that all the major credit card companies and financial institutions are rushing to get on board. Mastercard recently said: “MasterCard’s blockchain solution provides a new way for consumers, businesses and banks to transact and is key to the company’s strategy to provide payment solutions that meet every need of financial institutions and their end-customers.”

Supply chain success

Blockchain can provide tracking in almost real time, so you know for sure when a consignment of parts will arrive, or can assure a customer that a vital shipment will turn up exactly on time. More fundamentally, every time a product changes hands, it will be recorded in a blockchain ledger, creating a permanent and transparent history from manufacture to sale, however complex that journey is. That makes it easy to identify the source of a supply chain problem, and helps to eliminate the possibility of fraud. Everyone on the blockchain can see the chain of ownership, and nobody can change it without everybody else being made aware. Thus, blockchain technology allows businesses to easily identify weak links and streamline supply chain and distribution processes.