When most people think of innovation, they think of Oculus Rift’s virtual reality devices or Google’s self-driving cars. With a technology like Bitcoin, it’s easy to see why consumer applications also get the most attention from new adopters. At least on the surface, advances that closely touch daily life have the most to offer people who are discovering a technology for the first time.
What this causes most new observers to miss is that many of Bitcoin’s significant innovations will happen—and are happening—within firms that aren’t featured in TechCrunch or based in Silicon Valley. While these uses of Bitcoin technology may not be public, they’re also the ones that can transform how the world’s most important companies work.
A Payment Network Built for Growth
Since its creation in 2009, Bitcoin has had more success as a payment method than any other digital currency. Today more than 100,000 merchants worldwide accept bitcoin. As with any new technology, adoption has begun at the edges. Now many large-scale enterprises are embracing Bitcoin payments—and for good reason.
The Internet has made obsolete what used to be acceptable for companies using traditional payment networks: high fraud rates, interchange fees and country-to-country settlement limitations. Now these companies have a currency and a payment network that meet the realities of online commerce. With Bitcoin, it’s possible to receive payments in any size and amount for low settlement costs, all with the global scale that enterprises need.
Globalized Business Payouts
Globalization has made international hiring and remote work common features of enterprise workforces. It has also extended supply chains and business relationships around the world. On the other hand, there has been little globalization of traditional payment networks, which are still limited to the developed world. Even within the reach of these networks, international transfers are often expensive and unreliable due to the cost of maintaining and securing a multi-step settlement process.
With Bitcoin’s peer-to-peer network, money can be moved directly to payees via the Internet. It’s not limited by borders, and its costs remain flat whether a company is paying a supplier in Thailand or a developer in Argentina. This is the fastest fund settlement network in history, and enterprises can already begin to use it to effectively cut wait times, red tape and costs in payouts.
Asset Management on the Blockchain
The same problem that plagues the payments industry affects how companies manage their assets. Many financial institutions and other businesses still rely on analog processes to maintain digital ledgers and databases across borders and across branches. The costs of the human oversight, human error and fraud in these systems add up.
Now even traditional players in finance and banking are coming to appreciate Bitcoin’s underlying technology—a distributed digital ledger called the blockchain—as the solution. Using the same worldwide network of computers that verifies Bitcoin transactions, this ledger can allow firms to make and record transfers of any digital asset, title or token across systems in a matter of minutes. Spanish banking group Santander has already estimated that blockchain technology could save banks up to $20 billion per year. Whether through direct adoption or a more modern financial infrastructure, the blockchain is set to have the same impact for the broader business world.
Bitcoin as an Enterprise Platform
In the past decade, cloud-based solutions have allowed small companies to grow their operations faster than ever before. Until now, financial technology has lagged behind. Businesses have had to use systems made for a pre-digital world, from bank transfers to credit cards. Now Bitcoin promises to beat the cloud in providing scalable financial tools for any company with access to the Internet.
The enterprises that are adopting Bitcoin’s payment and asset management technology are beginning to find solutions to the toughest problems with doing business in an online world. That’s something more newcomers to Bitcoin should note. While this innovation may be happening at enterprise scale, it’s certain to affect the way we all live and work.