It has been a decade since we first heard of the blockchain technology. While some have been enthusiastic, some cautious and some plainly indifferent, the developers have been busy fine-tuning the technology, finding new implementations, fixing errors and enhancing the blockchain’s strong points to turn it into a method that can disrupt many sectors of the modern economy.

How Does Enterprise Blockchain Work?

In 2018, we are witnessing that next to a seemingly chaotic and unregulated jungle of custom coins, tokens, cryptocurrencies and ICOs, new structures are emerging, ordered and organized. Indeed, the big business is getting to embrace blockchain, and today we see the beginning of the era of enterprise blockchain solutions.

If we want to see the benefits that blockchain brings to the enterprise-scale business, we should look wider than the common image of blockchain as the platform for Bitcoin and Ether. Indeed, many people associate blockchain mostly with crypto mining and Bitcoin investments, while, in fact, its true power and value are in the underlying principle of network organization. This is what enterprises see in the new technology and are eager to implement.

For enterprises, blockchain means a totally new way of organizing their structure based on decentralization, trust in the absence of a middleman, and immutability of records. From this point of view, we can see that blockchain opens new perspectives for enterprises and can raise their effectiveness and security.

Blockchain features as seen in the context of enterprises

The main features of the blockchain technology gain particular weight when considered in relation to businesses of the enterprise scale.


Until recently, most businesses, both large and small, had a centralized structure with all critical components accumulated in a central server or data center. Such infrastructure had a number of drawbacks that blockchain can successfully eliminate:

  • The server or data center failure means the failure of the entire system.
  • The server or data center is the gateway for all sensitive information in the network.
  • All approval and decision-making processes are concentrated in the server or data center
  • The server or data center is the primary target of all outside attacks

In a decentralized system, all these issues and threats do not exist, as all processes are distributed between the nodes of the network. This is the so-called peer-to-peer network where all transactions occur between two nodes without any central authority. Thus, no single point of attack or failure and no delays due to the censorship by the central node.

Decentralization raises the processing speed within the network and contributes to its security, as there is no single data storage or concentration of critical infrastructure.

Trust and transparency

It may seem strange that trust can be established in a system with no central authority to approve the transactions or verify the identities. In fact, blockchain-based networks support better trust than centralized systems.

The magic of the “trust in a trust-less network” is that the network is not completely trustless. You trust in the system per se, in the code that makes it work. However, you are not expected to trust blindly. On the contrary, blockchain supports unprecedented transparency and accountability of all participants.

Each transaction can be traced back to its origin and each asset can be verified for authenticity. This is an inherent feature of decentralized networks that allows a greater degree of trust than in centralized ones.

Immutability of records

In a blockchain, no record can be altered without the entire network knowing about it. This immutability is achieved by using the hashing function. All blocks in a network are encrypted with one of the available hashing algorithms, and each subsequent block contains the hash of the previous one. Any change to any data, however minor, will change all blocks in the chain.

You, probably already see the value of such immutability for large enterprises. Accounting that cannot be tampered with, records that cannot be changed retroactively, any unauthorized interference immediately visible – any internal security department would love to have such a system for their enterprise.

Practical benefits of blockchain for enterprises

What we have talked about so far, are the fundamental features of blockchain. These features, however, translate into quite clear practical benefits that enterprises in many industries can appreciate.

Cost reduction

This is the first thing that catches the eye. No middlemen – no extra costs. This is the most obvious benefit, however, the matter is a bit more complex and multi-sided.

A decentralized infrastructure means less manual interventions, therefore, lower costs and effort required for support and maintenance. By switching from legacy systems to blockchain infrastructures, enterprises can reduce their IT costs significantly. Learn more in our article “5 cases how blockchain can cut costs of your business

Fast transaction processing

When the transactions occur directly between two users in the network, they take less time to go through than when there is a central entity. Consensus algorithms applied in all blockchain networks approve or reject transaction quickly and transparently.

On the other hand, when all required data is stored in the blockchain, there is less administrative work around the transactions. All data on all nodes is updated immediately, and there is no need to share or send anything to other departments or request manual verifications or reconciliations. As a result, enterprise employees can be freed for more significant tasks.

Blockchain can also serve as a reliable platform for quick and efficient document management. Document exchange between different institutions within the same network will be a matter of seconds. For example, all hospitals using the same blockchain system of patient records can view or update the patient’s data which becomes immediately available in the entire network.

Higher security

As we mentioned already, decentralized systems have no single point of attack. Therefore, it becomes very difficult to tamper with the data that is distributed among all nodes. Any breach will be known across the network immediately.

In addition, in a blockchain there is no need of sending or transferring data between users. The information is updated on the nodes, thus no actual transfer takes place at all. Security services go to all lengths to protect data during the transfer, while the basic principles of blockchain take care of this problem immediately. This feature can be especially appreciated by enterprises handling sensitive data – healthcare, insurance or financial institutions.

Here, we should mention that, by their nature, enterprise blockchains are usually organized as private, or permissioned, networks. Unlike public blockchain services, enterprise blockchain are intended only for the internal use and allow access by permission. Such permissioned system adds another layer to the overall network security.

Fraud reduction

The immutability of the data stored in the blockchain produces a number of valuable practical benefits for enterprises. First, if nothing can be changed without the rest of the network knowing, the risk of accounting fraud decreases dramatically. Each record, figure, and statement can be traced back to its origin together with the complete information about the users who ever made any modifications to it.

The same feature is also a great means of authenticity verification. It can become a powerful anti-counterfeit measure allowing to establish whether the product is genuine or not. Food, precious stones, hi-end equipment, medicines – anything can be traced back to its origin. Besides, in a blockchain, any forgery will be immediately discovered.

In this respect, blockchain can become a truly disruptive technology for such industries as, for example, logistics. Many shipments are accompanied with sheaves of documents including certificates of origin, various veterinary and customs papers, insurance documents. If all documentation were stored in a blockchain, there will be no need to verify or re-issue documents at each point of loading or unloading. And they cannot be lost, either!

Increased customer loyalty

Of course, the benefits that we have talked about so far already contribute to increasing the customer loyalty towards the brand. Blockchain means higher efficiency and security and less hassle whenever customers need to contact the business.

For example, an insurance company managing their business on a blockchain can process claims much faster without demanding that the customers bring tons of supporting documents to claim their compensations. Naturally, such approach can earn a higher customer loyalty and engagement.

At the same time, the loyalty programs, as such, can also be blockchain-based which offers some truly interesting prospects both for the brands and their customers. The idea is to replace whatever the brand is using as redemption units – bonus points, miles, virtual money – with cryptocurrency. By introducing a custom token as a loyalty program unit, the brand kills many birds with one stone.

On the one hand, the accruals become faster. The customers can see their token accounts rise as soon as they have completed their purchase. On the other hand, the brands can, finally, resolve the problem of offering the rewards that nobody wants. Most loyalty programs are limited to a number of brands and their products that may be totally uninteresting for the customers. As the result, bonus points expire, and the customers feel cheated.

With tokens, the situation is dramatically different. Tokens can be converted to major cryptocurrencies and then used for whatever purpose the customer finds best.

On January 1, 2019, Delta Airlines is launching its cryptocurrency-based loyalty program. No more SkyMiles, now Delta passengers are going to collect SkyMirage Ethers. The loyalty tokens will be based on the price of the ticket and adjusted according to the current Ether rate. The wonderful thing is that Delta claims to credit the SkyMiragte Ethers to its passengers’ accounts the moment their flight touches down.

Enterprise blockchain is already here

In 2018, enterprise blockchain solutions are no longer science fiction. Many global businesses are working on implementing the new technology to bring their effectiveness to a new level. Blockchain is entering almost any industry – we see banks, insurance companies, real estate agencies, power companies, airlines adopting blockchain as their platform.

Today, if you want to remain competitive, you need to jump on this bandwagon and embrace this new trend. Enterprises using blockchain are going to be more effective, productive, and secure than their competitors using the traditional technologies.

We can help you switch your processes and flows to blockchain. Our experts will be happy to work with you on analyzing the specifics of your enterprise and selecting the most appropriate blockchain solution in your case. We guarantee that you will be amazed at the results. Browse our blockchain development services and contact us for a more detailed discussion.