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Three levels of blockchain integration (w/ examples) to help you understand the future of technology

Three levels of blockchain integration (w/ examples) to help you understand the future of technology

Please note that we are not blockchain experts. In fact, we haven’t yet integrated blockchain tech ourselves. We’re just very interested, at this point.

For a primer on what exactly blockchain is, you can see this article.

Blockchain ledgers create new opportunities for innovation. Enthusiasts are saying it’s 10x as disruptive as the Internet has been. So businesses have a choice: either be late to the party, or be a pioneer. Blockchain can help businesses to:

1. increase efficiency

2. lower costs

3. remove intermediaries

4. increase security

5. increase transparency

6. increase convenience for your customers

Below, you can find a few examples to help you make more sense of it. You’ll also find explanations of how to get started in any applications that interest you.

Example #1: Be on the cutting edge of finance by accepting cryptocurrency as a means of payment

The first (and most obvious) example is accepting cryptocurrency as a means of payment for your products and/or services. There are several reasons why you might want to do this.

Crypto will, eventually, be a widely accepted form of payment. Already, payment services like PayPal are letting uses purchase with Bitcoin. You can transfer major coins like BTC and ETH from wallet to wallet, or use an intermediary like Bit Pay. More on that below.

The legitimacy of cryptocurrency is already a foregone conclusion in many minds. It’s only a matter of time. Here is a video about a guy who uses crypto to pay for everything --- food, gas, housing, bills, etc.

Accepting BTC/ETC payments also strengthens the Unique Selling Proposition of your business. Early adopters are going to be looking for businesses that accept crypto.

As belief in BTC and other coins increases, so will the value of these holdings. Simply holding some could be a form of income as the value grows. Accepting crypto as payment is one more way to acquire crypto. When you purchase crypto from an exchange like Coinbase, you pay an intermediary fee. When you exchange peer-to-peer, the only fee you pay is the cost of updating the blockchain.

Beware that crypto is not “stable”. If you have all of your wealth in crypto, your purchasing power will fluctuate from day-to-day. Before you get involved, it’s your responsibility to educate yourself on these assets.

Example #2: Increase efficiency

This is especially applicable for those in E-commerce. Cryptocurrencies are just one use-case of a blockchain, which is really just a decentralized ledger. The “blocks” in the chain are encrypted blocks of data that cannot be replicated.

This makes them finite/scarce. In this way, crypto is like fiat currency. Cryptos and other blockchain assets (like NFT’s) can have value, even without having any real utility. And some digital assets can have utility. After all, they are just blocks of data --- and the whole function of the internet is to exchange information.

The Bitcoin blockchain has low functionality, compared to next-gen blockchains like Ethereum, Cardano, and Binance Smartchain. These more sophisticated protocols allow you to create and exchange other assets through the use of smart contracts.

Smart contracts are single-function computer programs that work with a blockchain protocol. They communicate with the existing blockchain, and enact blockchain transactions when the right conditions are met.

This is exactly how crpyto wallets and exchanges work. No “transfer” of an item is actually taking place; the wallet application uses a series of smart contract functions to update the blockchain by adding data to the ever growing “chain” of data blocks. Now, the ledger records that Coin #123 has been sent from wallet A1 to wallet B2. The blockchain protocol dictates that only somebody with the private encryption key for wallet B2 can update the location of Coin #123.

So is it secure?

Well, it has to be. And that’s one of the strengths of blockchain. It uses state-of-the-art encryption. Illegitimate transactions can only happen if a malicious actor gets into somebody else’s wallet. Even then, they can’t tamper with the blockchain itself.

As the blocks of data are completed, they are fitted together with other blocks in the sequence. Every coupling is unique. So is every block. So tampering with an existing part of the chain would not only be difficult-to-impossible (because of so many layers of encryption), it would be obvious.

And blockchains can be created to exchange any type of digital asset under certain conditions. For example, smart contracts can automate escrow services. If certain conditions are met by both parties(ie, product is delivered and signed for by receiver), the payment can move from escrow into the supplier’s wallet. If the conditions are not met before the contract expires, the money will default back into the customer’s wallet.

The decentralized ledger can offer other advantages. For example, other customers can see that the supplier has faithfully delivered it’s packages on time at a rate of 99.8%. A huge plus is that the customer can control how much of their own data is viewed --- including their name and the contents of their package.

At a minimum, the system will show a public-but-anonymous user number that lets other users know it was a valid transaction.

Complicated transactions, simplified

A ledger like this can be even more useful in complicated transactions that involve more than two parties.

Real estate sales are a good example. You’ve got several parties involved in a single sale: buyer, seller, buying agent, selling agent, lender, inspector.

The lender can look at the ledger, and see that that the buyer does, indeed, have a sale lined up. The seller can see that the buyer has been approved for a loan. The home inspector can see that all of the pieces are in place, and carry out the inspection. He can then certify the property on the ledger, and all parties can see that the sale is ready to go.

Fewer phone calls, fewer visits, no paperwork, no escrow services...You get the picture. This is something that can be useful in any business. The more complicated a transaction usually is, the more value blockchain adds.

Getting started

And getting started is actually not that difficult. Just like with computers and websites, you don’t need to understand coding to make it work. You can hire an Ethereum programmer. They can build you smart contracts and full blown applications that will improve the efficiency of your business

Example #3: Tokenization of physical and digital assets Funding, lending, investing and acquiring assets through tokenization

A digital asset can also represent a stake in a physical asset. The ownership of real estate, businesses, equipment and other assets can be divided up into shares, known as tokens. Every “token” represents a percentage of ownership stake, and stakeholders can acquire multiple tokens.

This is just like stocks in a company, only with crypto you can build your own blockchain ecosystem and you can apply it to anything of value. All that matters is that stakeholders 1) agree on value, and 2)trust the protocol.

Example: RealT is a real estate company that is tokenizing the properties in their portfolio. Users can purchase tokens of a given property, and enjoy their portion of the rent proceeds. A system like this can allow people of almost any financial means to make investments. It also widens the investor pool, meaning there is more liquidity out there to fund investments.

Tokenization is a way to crowdfund and “micro invest”, basically. Say you and several other businesses decide you need a local cloud computing facility. Your tokens let you reserve server space. You can sell your tokens off at any time. Businesses and people can buy only as much space as they need, and sell it at anytime.

This, too, could be treated as investment. The group could rent out extra server space, and rental fees could be split up according to stake size. The blockchain protocol would provide all the guarantees. You could automate the allocation of rental income, where some goes to stakeholders and some goes to buying more servers to build the facility out.

This is a model that could be applied to any useful asset: property, warehouse space, a 3D printer, an excavator. The only issues are:

1) Scale --- There is a development cost for a blockchain ecosystem, so the project would have to be of a large-enough scale to make it profitable, and

2) Trust--- participants would have to understand and trust the protocol to even be interested, in the first place.

So the challenges are cost and organization. But we’ve seen costs go down with coding over the last two decades, as coders have flooded the market and the trade has advanced. Expect the same trend with blockchain.

Also expect funding models like the above to become “packaged”. Developers will code their own models that business owners, networks, and communities can adopt and adapt.

Of course, instead of waiting around, you could make it happen, yourself. Being a pioneer instead of an early adopter is its own opportunity. Any application you can come up with will be useful to other businesses, as well.

You could partner with a savvy blockchain programmer to create an application that gives you a huge competitive advantage. You could also, then, package that application up and sell the source code to other businesses.

To lower development costs, you could even partner with other forward thinking businesses. You could build a base program that each business could adapt to their own needs with minimal effort.

The possibilities for blockchain applications are limited only by your imagination. In another example, you could use blockchain to implement a rewards program for your business. The native token could be used for customer rewards and employee bonuses. Those tokens, then, could be used for PTO, product discounts, exclusive events, and/or exclusive content (you really should be sharing your business expertise with the world), to name a few things.

In this way, you create your own private ecosystem. The best part is, the tokens have real value that incentivizes participation. Additionally, you create a community within that ecosystem. Employees could trade with customers, or customers could tip employees for being especially helpful. And these are just a few examples.


A deeper understanding of blockchain will open up worlds of possibilities. A reluctance to adopt will just make you late to the party, and give those who embrace new tech a competitive advantage.