In 2022, terms like blockchain and bitcoin are dominating the news. But, you own a restaurant, so why should you care? Isn’t this technology only relevant to the financial industry? Well, let’s start by understanding what these concepts are.
What is blockchain? Simply explained, blockchain is a digital ledger of transactions. It is a system of recording information in a way that makes it virtually impossible to hack or cheat the system. This ledger is duplicated and distributed across the entire network of computer systems on the blockchain. Each block in the chain contains a number of transactions, and every time a new transaction occurs on the blockchain, a record of that transaction is added to every participant’s ledger. So, why is there so much hype around blockchain technology? These are some of the reasons why:
Programmable Think smart contracts.
Transparent All network participants have a copy of the ledger.
Safe All records are individually encrypted.
Immutable All validated records are irreversible.
Anonymous The identity of participants is anonymous.
Time stamped All transactions are time stamped on each block.
Unanimous All network participants must agree to the validity of each record.
Ok, so why do people talk about bitcoin and blockchain technology interchangeably? Bitcoin is a decentralized digital currency that you can buy, sell and exchange directly, without an intermediary. Think of a currency that can exist without a banking system. The connection is that Bitcoin is built on a blockchain, thus enjoying a lot of the benefits mentioned above.
So what does this mean for a restaurant owner? Well blockchain has several applications in the food industry, and for restaurants, in particular, that number of applications is rapidly growing.
Blockchain can improve food quality
Blockchain can improve food safety
Blockchain can provide transparency for customers
Blockchain can provide transparency for restaurants
Blockchain can create synergies between restaurateurs
As you can see, these applications can affect almost every part of a restaurant's business, from food sourcing to designing new marketing strategies. As restaurateurs, we try to differentiate our concept by reaching out to our target market. Sometimes we market that our food is organic or grass-fed but, how can we be sure? At the end of the day, you are in direct contact with the end consumer. If a restaurant markets itself a particular way – as an establishment that only sources from local farmers – they want the ability to back up their claims and ensure their suppliers do so as well. Blockchain can make this happen. Blockchain could record the origination of food provided to a restaurant that boasts locally sourced ingredients. This technology would allow consumers to verify items against the immutable blockchain ledger, including where the food is sourced and whether the restaurant is living up to its claims.
Another one of blockchain's important uses for restaurants relates to food safety. Imagine, for instance, that a protein from a specific vendor is contaminated. The vendor notifies you of this but doesn’t know the specific lot. Blockchain could trace the product throughout the distribution cycle down to the farm. This would allow you to eliminate the specific, tainted product prior to having it escalate to an illness, a health inspection and maybe even a bigger public relations nightmare. Remember in the restaurant business, reputation is everything.
Beyond the more serious issues of food safety, food quality can also be tracked. For you this means using the blockchain technology to identify the source of the food you buy, tracking and measuring the quality of the food purchased. This completely changes your purchasing strategy. As the restaurateur, you would then obviously work exclusively with the distributor if the product is good quality and eliminate that vendor if the product is poor quality.
Ok, so let’s think bigger. As restaurant owners, we are always looking at how to bring in customers through the doors. Blockchain can allow companies, or even groups of companies, to create a loyalty program amongst them. Small independent businesses can now create synergies and design customer acquisition and retention strategies as a group. Think of the possibilities both for national chains and small independent restaurants.
So what can blockchain do for your restaurant today? More importantly, how can restaurateurs leverage this technology today? Should you begin to accept bitcoin as a form of payment? Is it time to accept the revolution or is it just a bubble? If you’re interested in learning more, reach out to us and we would be happy to guide you. Be part of the future of the restaurant industry!
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