Table of Contents
Blockchain is categorized by many as the complex which is contrary to the actual simplicity. The evolution of the technology has resulted into the blockchain technology which is applied in the transaction like distributed ledgers, running databases, and other devices which can be integrated with the technology to bring the trust in mutual agreement and management of the binding agreement. This paper explains the significance of the blochchain and how has transformed the trust on various context. Additionally, the papers examines how the blochchain has aided in eradication of the cheating by deploying of ideals measures and sealing security loopholes hence ensuring proper management of the companies and firms globally.
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Information management is considered to be imperative due to its ability to utilize the resources that ensure the success of the firm (Pilkington, 2016). However, the blockchain technology has emerged as the ideal approach for management of the organization data and the transaction through the recording, storage, and the entire management of transactions. The blockchain act as information management technique which allows the recording of transactions in a technologically driven way and automates the updates of the information relevant to the organization. Therefore, the blockchain is classified as one of the holistic ways of improving the business model of any organization and there is a need for small and large enterprises to consider this ideal model as a way of improving the management of their transactions and operations.
Application of the blockchain
The company will have to rely on the blockchain technology in many aspects of its operations. The company will depend on the blockchain in the following ways:
Blockchain technology is considered an ideal approach for the company to use when creating the ledgers and other financial statements. Blockchain allows for the storage of financial transactions in a permanent way and thus guarantees the security of sensitive data from unintentional deletion. A financial transaction is very focal in making business decisions and tracking financial records. When there is a proper and an ideal way of record keeping, it will be easy to identify and rectify errors promptly. Furthermore, the evidence of financial records is intact when the blockchain technology is used to manage financial matters of the firm.
The blockchain technology is mainly used to record new company transactions. These transactions vary depending on the operations of a given form. In this case, the information is shared through decentralized databases after which the information is shared among the different departments and branches that are located in different geographical locations. With the use of blockchain technology, transactions are recorded with ease and shared through the organization network (Crosby, Pattanayak, Verma, & Kalyanaraman, 2016).
A smart contract is a software that is used in blockchain technology to facilitate, verify, and enforce an agreement between the transacting parties without the need for a third party. When this software is triggered and allows initialization and confirmation of the agreement. The smart contract reduces the effort and time used in documenting the legal agreement. Additionally, the software stores the legal agreement and there is no involvement of the intermediaries (Yli-Huumo, Ko, Choi, Park, & Smolander, 2016).
Intellectual Property Rights
The blockchain technology also provides the indispensable rights to own the property or legal rights. (Wright, & De Filippi, 2015). This functionality is applicable to scenarios like property, images, videos, audios, and other digital contents. Blockchain can be deployed to manage the patent right of these properties and also coming up with the secure payment for music and other digital contents.
The Chain Custody
The blockchain is a fundamental application in the chain custody that ensures the custody of the documents and files in the company are maintained. Due to the presence of many transactions conducted by the company, the custody of such documents become essential and the steps and chain of the documents are comprehensively protected. Apart from the protection, there is also the storage of such an important document which is considered vital to the organization. For instance, in the digital ledgers, there will be evidence indicating the chain of the transactions and this will act as evidence for the transactions. This eventually saves time when the organization requires to look for a certain transaction.
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Benefits of Blockchain in Transactions
The blockchain technology helps the company in different ways. The blockchain is an emerging technology and it is associated with many benefits. Some of the benefits of blockchain technology are discussed below:
Blockchain technology has greatly improved transaction transparency in organizations. This has been enabled by the distribution of transactions where documents are shared within the entire network unlike traditionally where the copies are kept in a central position. When changes are to be reinforced there should be a mutual agreement which enhances the transparency of the changes to be made to the system.
The alteration of any transaction will result in changes in the entire network and the transaction will be accurately recorded as per the initiated changes. The paperwork process is prone to errors and lack transparency as some of the changes are implemented by individuals without the consensus of all involved parties.
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Improvement of Security
From the scholars, the blockchain is considered to be more secure. The transactions need to undergo mutual agreement before it is implemented and recorded. However, after the agreement, the transaction security is the next concern. The transaction is encrypted and then linked to a particular transaction. It is clear the blockchain enhance the security of the transactions through security encryption techniques which ensure the integrity and confidentiality of the transactions and the shared documents (Biswas, & Muthukkumarasamy, 2016).
Increased Efficient and Speed
The traditional process of managing transactions is error prone. The deployment of the blockchain has streamlined the efficiency and the speed at which the transaction is performed. This is aided by the digital ledgers which don’t require the integration of several ledgers thus making the work tidier. As a result, this blockchain is salient because it catalyzes the transaction execution.
Reduces the Cost
Reducing the operating cost is the concern of every enterprise and the use of the blockchain reduces the cost by eradicating the involvement of the intermediaries. The third party and intermediaries have no room and it is, therefore, the cost of the organization data and transactions are reduced and this will be a benefit when the use of blockchain is deployed by the firm.
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Tracing items in the supply chain have been improved by the use of blockchain technology. Supply chain items traceability has been a point of concern but with the use of blockchain technology, the process has been streamlined. The assets of the organization can easily be traced and the origins are easily identified.
The Use of the Third Party
When the third party is involved in the entire process by the organization, the organization will incur an extra cost due to their involvement (Lemieux, 2016). This will result in the firm incurring higher cost unlike when the blockchain technology is used.
The speed of performing the organization transactions is also impaired when a third party is used. The third party will affect the speed and lead to poor performance of the organization. When a third party is consulted before arriving at a decision, it will impact the speed and execution of business transactions.
Additionally, the security will be a problem when the organization allows a third party involvement. The leaked information to the third party may result in security breaches which may cause adverse problems to the organization (Sun, Yan, & Zhang, 2016).
Necessary Procedural Changes to the Law Firm
The creation of the distributed databases will enable the firm to share the resources with the networked computers. This will also allow for automated updates on a regular basis and the design also will allow the integrity of the data. Therefore it is necessary to consider the distributed database because it acts as an integral part when embracing the technique of decentralization.
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An example of a transaction is the smart contract transaction where the transaction is initiated without the human intervention. This will execute the transaction and gives the precise solution depending on the agreement and this is ideal to the law firm because this is an important transaction that is agreed by the parties and the contract is based on the mutual agreement before they are implemented.
In conclusion, blockchain is indispensable in this era of technology advancement. It is therefore important for companies to adopt this essential emerging technology which can bring overall positive impact on the management of the firms operations as indicated by the applications and the benefits associated with the block chain.
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