Businesses have a wide range of needs and requirements to function properly, depending on the industry and its domain and spanning various areas, from peer-to-peer networks to the average user.
One of the most critical elements enterprises need to manage carefully is handling sensitive data that must not be divulged, lost, destroyed, compromised, or suffer any modification that would jeopardize the business's stability and reputation.
From labeling products to issuing IDs and conducting trades, each internal or external process must be diligently carried out, which is where technological advances come into play.
Ethereum, just like any cryptocurrency available, makes use of blockchain technology to function and facilitate operations in businesses that embrace technological innovations with open arms.
Accepting Ethereum payments, for instance, enables enterprises to reap far-reaching benefits, like making them appeal to a broader client category and appearing better prepared to welcome development compared to enterprises choosing to sit on the fence in the face of innovation.
While the Ethereum price is known to climb and drop abruptly, there remain several advantages to using such a gateway, like reduced transaction costs and faster transactions due to the lack of third-party involvement.
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What is Ethereum?
There have been never-ending debates on how and whether Ethereum can improve a business' processes as intended when it entered the enterprise world. One indisputable thing, however, is its ability to secure digital technology thanks to its innate blockchain features. Blockchain technology enables participants to develop and maintain secure digital ledgers and allows anyone to build applications this way.
In layman's terms, Ethereum is widely recognized as the favorite blockchain of choice for developers and enterprises using this relatively new technology. It represents decentralized global software made possible by blockchain and created with security, programmability, and scalability in mind.
The project's co-founder, Vitalik Buterin, took Bitcoin's revolutionizing system to the next level as the investor realized its complete potential was far from being unlocked. Bitcoin was mainly intended as a payment solution, whereas Ethereum had bolder aspirations that would pave the path to more possibilities.
Now, enterprises can take advantage of the disruptive characteristics of Ethereum to streamline different processes, from agreements to payments to supply chain monitoring.
It is important to understand the difference between the platform and Ethereum's native cryptocurrency. Ethereum also powers the world-famous and second-largest cryptocurrency after Bitcoin, Ether, which can be sent everywhere in seconds from a digital wallet or included in the investment portfolio to reap the benefits when the asset's price sours.
What are Ethereum's benefits for enterprises?
Ethereum can benefit companies in several ways, considering the adoption strategy is carefully designed to meet enterprises' needs. Generally, the advantages are split between the following improvements.
Ethereum's smart contracts can reduce operational business costs
Smart contracts have taken the business world aback with the myriad opportunities they have introduced, readily available in almost any industry. Simply put, a smart contract is a program that encodes business logic and runs on a dedicated virtual machine baked into a blockchain or distributed ledger.
Their decentralized feature means no company or individual controls the contracts, but a predetermined logic rooted in their code. Business logic is executed when the pre- established conditions are met. Thus, they eliminate the implication of any intermediary, like insurance providers or banks, that would otherwise be essential in establishing a contract.
This solution is well-received by businesses looking for ways to bring automation into their financial transactions, facilitating insurance claims, loans, payments, and more. Besides cutting the costs that working with an intermediary would imply, these self-executing contracts also improve the settlement speed, saving businesses valuable time and money.
At a glance, the advantages of smart contracts are easily recognizable and hard to deny. The room left for human errors, corruption, and fraud shrinks when self-executing agreements are used, even more as the ownership record is immutable and transparent, meaning that no changes can be made once a transaction is conducted.
Additionally, data encryption is on top of the game as any chance for bias and manipulation is ruled out, thus reducing the likelihood of potential court proceedings that disputes may bring.
Automated contracts can be an excellent digital alternative to paper contracts. However, despite the proven real-world cases, not many enterprises are prepared to incorporate them, with some doubting whether they can provide any extra benefits, given that traditional contracts have worked well so far.
Decentralized applications strengthen business collaborations
Developers are turning to Ethereum to build decentralized applications (dApps), representing software applications using the blockchain to improve transaction transparency and security among users. They facilitate a new business cooperation model and can be implemented in a wide variety of areas, from document verification to supply chain management.
There are currently more than 12.000 decentralized apps in existence, but some of the most commonly used usually include the following:
- Wormhole
- Axie Infinity
- Uniswap
- MetaMask
- MakerDao
Ethereum improves businesses' efficiency
Business efficiency can take many forms, and in most cases, this attribute represents the key to long-term success and stability. The continuous efforts enterprises make to streamline their internal and external processes are all made to improve efficiency, which is why technologically-prepared businesses turn to Ethereum to overcome different limitations.
By welcoming automation, the distributed ledger can help improve efficiency, advancing operations like contract monitoring, payments, and confirmation of item legitimacy. As a result, the user enjoys better security and business-to-business transparency, delivers better information to clients, and grows customer satisfaction and loyalty.
Ethereum makes the supply chain smarter
With pressing issues like greenwashing being the talk of the town in the enterprise world, increasingly more customers want to know where their products and used materials come from. However, with the ever-developing nature of technology, offering the demanders the information they desire and reducing their concerns is now easier than ever.
Enterprises that use Ethereum can supply reliable information about the product's provenance as data tracking is streamlined along with all the needed documentation, like certifications or invoices.
Data traceability across an enterprise's network goes beyond identifying the genuineness of the supplier and providing customers with trustworthy information to establish healthy, long-term collaborations.
Ethereum is shaping the picture for the technologically-advanced and future-oriented companies across several industries, including healthcare, medicine, and entertainment. As it gains increased acceptance, more sectors are expected to join the list sooner or later.