Improving the efficiency of the supply chain with bitcoin and blockchain
Transactions often occur in multiple currencies, sometimes in remote locations, and may span weeks or months before completion. If you are new to Bitcoin trading, you can do so with complete confidence by using Bitcoin Motion. In addition, Bitcoin and blockchain technology have already started to make supply chains more efficient.
The use of bitcoin and blockchain in supply chains is still a small market but is proliferating. There are several ways in which people can incorporate the use of bitcoin and blockchain technology into the supply chain. One of the ways is to use them to make payments. The goal would be to make payments faster and reduce transaction fees. Another option would be for companies that are partners in the supply chain to accept payment in bitcoin or other cryptocurrencies.
Some are considering implementing a native blockchain solution for their business through an ICO (Initial Coin Offering). One more option could be implementing smart contracts that would automate some of the processes between partners along the supply chain and eliminate some associated costs. So let’s explore the use case of bitcoin and blockchain in the supply chain to improve its efficiency.
Improve creditability and public trust of data shared:
One of the most significant issues with supply chain management today is its lack of transparency. It can be a challenge, especially for parties that use third-party merchants in the supply chain. With bitcoin, companies can have more control since the transactions are peer-to-peer and take place directly through their wallet platforms.
Today’s supply chains rely on third-party intermediaries such as banks or payment processors. These intermediaries make it challenging to trace belongings and ensure their quality and authenticity. Bursting the veil of anonymity on these transactions also helps increase public trust in data shared by suppliers, which is vital in growing a sustainable market. Businesses could use bitcoin and blockchain to enhance their market share.
It can help increase the customer base of their suppliers, creating new opportunities for them. It is also beneficial for small businesses that may not have the same capabilities as large companies and may be unable to compete with them in terms of price but still have a better user experience, which can improve customer loyalty.
Eliminate or reduce payment delays:
Payment delays can add costs along supply chains. However, many benefits come from accepting payments in bitcoin and cryptocurrency, such as speed and transparency. With faster settlement time, there will be no more issues with delayed payments or chargebacks.
Reducing disputes:
Disputes are a common reason behind payment delays. With bitcoin, there is no need to go back and forth with a third party to settle disputes since it’s all done via the blockchain. Similarly, due to increased transparency, there will be no more costs associated with chargebacks or mediation. It will also improve the trust between merchants and their customers and increase their reputation among them.
Increase creditability of suppliers:
The use of bitcoin and blockchain technology can also increase suppliers’ creditability since it provides them with better visibility of the transactions that are taking place directly between merchants and consumers, making it easier for them to prove their legitimacy as well as their ability to pay for goods/services they are purchasing from consumers.
Develop more efficient payment processing:
Since the use of bitcoin and blockchain technology can decrease delays, the results could be a faster settlement time, leading to higher efficiency. In addition, the resulting reduction in costs associated with processing payments can also benefit companies. For example, merchants will spend less time waiting for payments to be cleared and less money on transaction fees.
Incorporating intelligent contracts can make supply chains more efficient by eliminating or reducing some payment costs. It will also help increase transparency and public trust in asset tracking, allowing parties to track goods as they move through supply chains.
Anti-corruption and humanitarian purposes:
Supply chains are often used to send humanitarian goods. With smart contracts, supply chain payments will become more transparent, reducing the possibility of corrupt officials and intermediaries taking part in transactions outside their jurisdiction.
People could also use blockchain for anti-corruption purposes. For example, when the CEO’s assets are tracked on the blockchain, authorities can better track their actions and discover any misappropriation of funds or other business-related crimes. In addition, this technology can help prevent bribery and fraud by helping authorities track financial movements across countries and supply chains.
Create a more sustainable supply chain:
Manufacturing industries could also use blockchain and bitcoin to create a more sustainable supply chain. For example, smart contracts could create direct agreements between their suppliers and their clients, cutting out go-betweens and increasing transparency. People can then use this transparency to ensure that products are produced per international or local requirements such as safety, working conditions, and environmental management.
In conclusion, blockchain technology could improve the efficiency of supply chains by making inspection easy and eliminating unnecessary costs associated with payment processing. It can also reduce delays that occur due to data sharing problems between merchants, suppliers, intermediaries, and consumers, as well as resolve disputes through the use of smart contracts that help increase transparency in transactions.
