Blockchain reduces the cost of verification and the cost of networking

Blockchain June 25, 2023

news post image for Blockchain reduces the cost of verification and the cost of networking

Businesses should be excited about the blockchain. It can save them money and alter the way business is conducted. Since every business and organization conducts many types of transactions everyday, each transaction requires verification. Since you may know your customers, your clients, and business partners, in most cases verification may be easy. However, every now and then there is a problem, and when that problem occurs, you end up running some sort of process, such as an audit, to make sure the person claiming to have those credentials did in fact have those credentials, or a firm selling goods did have the certification of those goods. When this needs to be done, it is a costly, labor-intensive process. As a result, the marketplace slows down and you must incur additional costs. In these cases, distributed ledgers become very valuable because the attributes you need to verify are securely recorded on a blockchain and you can refer back to them at no cost. This is called costless verification. Because blockchain verifies trustworthiness, you no longer have to.

Envision a model where you can verify certain attributes that are true or false using a decentralized infrastructure, but you do not have to reveal all these attributes all of the time. In the context of a business transaction, a blockchain can be used to verify a party as being trustworthy without having to open its books for a full audit. Since the friction of a transaction is reduced, the result is in lesser cost and time savings. Although the internet allows for a fast exchange of goods and services, it still needs intermediaries. These intermediaries are costly and earn fees for processing payments. This in turn allows you to rethink the entire value chain from the ground up.