Is blockchain profitable as a business? This question is probably asked quite frequently by aspiring entrepreneurs and the general audience as well. No wonder, because no matter how young this industry is, it has captured quite a significant capital in just a few years, despite its market rushes in an upward and downward motion.

If you look at the cryptocurrency market cap as of the end of October 2021, you’ll see that it broke the record again and reached its new all-time high – almost $2.6 trillion. That’s only the market cap of cryptocurrencies traded at exchanges like CEX.IO, not to mention all the profit that’s being made on blockchains that serve various business purposes.

Let’s look at blockchain as a business more closely and see what are the main points of its profitability.

Advantages of blockchain

Blockchain is an emerging technology that proved its efficiency in a variety of industries. Why it suits many businesses from various areas? It’s simple. Because every other blockchain has some specific advantages that are inherent to this technology and that eventually end up being an answer to many burning issues of modern businesses.

Here are the most common advantages associated with blockchains:

• Decentralization

Blockchain is a distributed ledger. That is, like an infinitely scalable and resilient database that doesn’t have to be maintained by a central authority. It’s also a trustless chain, meaning that you don’t have to trust your sensitive data to a third-party provider. Not only this approach is regarded as secure and smartly managed but also it is usually much cheaper than using big-name companies’ services like AWS or likewise.

• Immutability

What happens in Vegas stays in Vegas. Also, what happens on a blockchain, stays there forever and there’s absolutely no other way around. Many businesses find this immutability an advantage because it allows maintaining the ultimate transparency of every transaction and the whole history. Initially, this feature was designed to avoid the double-spending problem, but right now it has gained its reputation for keeping things honest and clear.

• Security

Quite a few features inspired blockchain believers to talk about the latter as more secure than conventional databases. First of all, it’s the anonymity of transactions. During the processing of transactions and even in the event of maintaining a non-custodial digital wallet, nobody on the blockchain will ask your name, country of residence, or a credit rating. On such a network, all you will see will be the alpha-numeric hash addresses that transmit values from one to another. Apart from anonymity, another point of security is the verification of transactions by multiple anonymous unrelated parties called nodes. Even if one or a few malicious nodes approve the fraudulent transaction, the rest of the chain will disprove it and the malicious nodes will be fined and eliminated from the decision-making process.

Now when we found the main advantages (or should we say selling points) of blockchains, let’s find out how they can affect the profitability of the blockchain as a business.

Discovering profitability in blockchain

A few decades ago when international financial transactions like SWIFT were introduced, there used to be a single technology standard that everyone used. On one hand, it was good that the whole procedure was standardized and there were almost no “bugs” in the system. However, on the other hand, there was effectively no choice when it came to performing international payments. SWIFT used to be the only option, and all of the participants of the network had to cope with its inefficiencies, lack of privacy, and the extended waiting time until the payment clears.

With modern blockchains, things have become different. Any customer, whether it’s a business entity or an individual investor, is free to choose out of multiple blockchains and pick which one suits them best. It’s also worth mentioning that every other blockchain has a unique architecture. They might also be targeted at various pain points and efficiently solve various issues. Also, there is freedom in terms of the development of custom solutions because most blockchains have open-source code that is free to use.

So, blockchain can be profitable as a business of its own, and blockchain can also be profitable as a specially crafted solution for any other business. By the way, creating a blockchain isn’t as hard as it might seem from the start. Some companies offer out-of-the-box solutions like ready-made frameworks which can be used by developers for easy assembling of new blockchains. As a result, one of the ways to profit from blockchain as a business is to reduce costs which is achievable with framework solutions.

A business use case

One successful example of blockchain implementation is IBM Food Trust. Handling supply chains of fast-moving consumer goods are especially challenging because many of the products that are being sold in grocery stores have a very minimal shelf life. For example, this applies to leafy green vegetables. A special task, in this case, was to examine these products and continue with delivering only the ones that are surely not infected with foodborne illness.

The IBM blockchain platform now manages to track these items in a matter of seconds, which previously could take up to weeks of time. Due to the fact that the foodborne illness increases during certain seasons, retailers have to make sure that they don’t supply the infected products or that they quickly take those products off the shelves. This opportunity allows to quickly spot the problematic places and tackle the issue which also brings cost savings of up to millions of dollars.