The popularity of Bitcoin and other cryptocurrencies has drawn attention to their underlying distributed ledger technology (DLT), the blockchain.
The basics of blockchain technology are intuitive. The technology essentially takes the form of a decentralized database whose entries are verified through encrypted peer-to-peer networks.
It’s easiest to think of it as a Google Doc that is thoroughly verified and encrypted, with each cell’s value dependent on the values of its predecessors and validated.
However, blockchain technology is not only the backbone of Bitcoin; there are many other applications to which it can be applied. We have included some of its potential uses in banking, business, government and other sectors below.
Potential Applications of Blockchain Technology in the Financial Sector
Foreign money transfers
Blockchain technology allows for an immutable record of transactions that is both secure and time-saving, all thanks to secure Bitcoin playing websites, making it a great choice for sending money abroad.
This can be seen in April 2018 with the introduction of the first blockchain-based service for money transfers by Banco Santander. Santander One Pay FX uses Ripple’s xCurrent to provide instant and next-day cross-border money transfers.
Santander has made the process more efficient by reducing the number of middlemen often involved in such deals and automating them all on the blockchain.
Santander is a large commercial bank; thus serving many consumers who can enjoy more convenient and affordable payment options, especially for international money transfers. Blockchain technology can be used to reduce the cost of such payments by eliminating the need for banks to manually settle transactions.
The financial sector is another area that could benefit from blockchain-based technologies. The benefits of blockchain technologies to capital markets are outlined in an article by McKinsey and include:
Faster payment processing
Improved audit trail Improved operations Founded in 2013, Axoni develops blockchain-based solutions aimed at improving capital markets. Axoni has just announced the creation of a distributed ledger network for managing share exchange transactions, enabling both parties to stay in sync with each other and share relevant updates in real-time throughout the life of the equity exchange. .
Capitalization in trade
Traditional approaches to trade finance have been a source of significant frustration for companies due to the time and effort required to complete the procedures involved. When trading cross-border, many factors must be reported, including country of origin and product information, and many documents must be generated with each transaction.
Blockchain technology has the potential to increase the efficiency and ease of international trade finance transactions. Facilitates business transactions between companies regardless of their physical location.
Audit of Rules and Regulations
Blockchain’s high level of security is a boon to the accounting and auditing industry by eliminating the potential for human error and ensuring the authenticity of documents. Even the account holders themselves cannot tamper with the immutable records created by blockchain technology. Blockchain technology could eventually eliminate employment and the need for auditors.
Anti-money laundering measures
Blockchain’s built-in encryption is a huge boon in the fight against money laundering. Know Your Customer (KYC) refers to a company’s procedure for identifying and verifying the identities of its customers, and the underlying technology enables record keeping that facilitates this procedure.
One of the most promising uses of blockchain technology in the insurance industry is in the form of smart contracts. Customers and insurers can rest easy knowing that their claims data is safe and secure thanks to these agreements. Due to the network’s ability to verify all contracts and claims stored on the blockchain, fake claims will be eliminated and genuine claims will be prioritized.
In partnership with the Insurance Services Association of America, a network developed on the IBM Blockchain Platform that automates insurance regulatory reporting and reduces compliance procedures is launched.
Interactions Between Individuals, Not Between Bank and Customer
Peer-to-peer (P2P) payment platforms like Venmo are useful, but they have their drawbacks. When it comes to shopping, several businesses put up barriers depending on where you live. Some require payment before you can use them. Users are wary of revealing their credit card numbers and other financial details on websites that are prone to hacking. Blockchain technology and its many advantages can be used to overcome these challenges.
Distributed Ledger Technology (DLT) Use Cases in Corporate Supply Chain Management
The immutable ledger provided by blockchain technology is ideal for use cases such as real-time monitoring of inventory transferred between different warehouses. For businesses involved in the transportation of these items, the use of blockchain offers several new opportunities. Supply chain events, such as the distribution of freshly delivered goods at a port to different shipping containers, can be queued using blockchain inputs. Blockchain offers a new and adaptable approach to managing and using data for tracking purposes.
Basic demographic information such as age and gender, as well as certain aspects of a patient’s medical history, such as vaccination records and vital signs, are examples of the types of health information that may be stored in such Data. a public blockchain that many people can access without privacy concerns because none can be used to identify a single patient.
Blockchain has the potential to simplify the process of integrating patient health data as specialized connected medical devices become more widespread. Data collected by these devices can be stored on a healthcare blockchain and added to individual health records. Data generated by connected medical equipment is often stored in separate silos, but blockchain has the potential to solve this problem.
Real Estate Investment
Every five to seven years, the typical homeowner will sell their home, and the typical person will move more than a dozen times in their lifetime. The real estate sector is highly mobile and shows how blockchain technology can be useful. Because of the encryption and other security features, it will make the entire home buying process more transparent and faster, as well as help prevent fraud.
To combat fraud, save costs, and protect IP rights for material such as music recordings, the media industry has begun to use blockchain technology. MarketWatch predicts that the worldwide market for blockchain applications in the media and entertainment industry will grow to $1.54 billion by 2024.
Eluvio, Inc. is a platform in the spotlight for its use of blockchain technology in media. Officially released in 2019, Eluvial Content Fabric, a blockchain-based solution, enables content creators to manage and distribute high-quality video to end users and industry partners without the need for content delivery networks.
Recent months have also seen MGM Studios use the service for “global streaming online, mobile and TV, for audiences of ‘certain titles’ everywhere.”
According to PWC, energy Blockchain technology can not only be used to perform energy supply transactions, but can also be the basis for billing, clearing and metering. Other possible uses include ownership records, asset management, guarantees of origin, emission permits and renewable energy certificates.
Use Cases for Blockchain Technology in Public Records
Records of individuals, such as births, deaths, marriages, and transfers of property, are the responsibility of national, state, and municipal governments. However, all this information can be difficult to manage, and many of these records are still available only in paper form. It can be inconvenient, time-consuming, and even discouraging for residents to physically visit local government offices to make changes. Blockchain technology has the potential to significantly improve the security of these records while also making them easier to maintain.
Controlling Your Identity
Proponents of using blockchain technology for identity management argue that if enough information is stored on a distributed ledger, users will only need to provide minimal information (such as date of birth) to verify their identity.
With the use of blockchain technology, voting can be made more accessible and secure. Even if a hacker gains access to a terminal, he won’t be able to disrupt the entire network thanks to blockchain. Counting ballots would be easier if government agencies could assign each vote to a unique ID card and make fake ID cards difficult.
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With enough information stored on the blockchain, the time-consuming, error-prone process of filing taxes can be greatly simplified with blockchain technology.
The escalating antitrust challenges facing charities can be addressed by blockchain’s ability to demonstrate to donors that their contributions are being used appropriately. In addition, blockchain technology can help such NGOs transfer those contributions more effectively, manage their resources and improve their monitoring skills.
Administration of Laws and Regulations
Record keeping is an important source of regulatory oversight, but the consequences of not doing so are more severe. Therefore, businesses cannot afford to ignore compliance. With blockchain, authorities and companies can instantly access updated records, eliminating delays and facilitating early detection of red flags and discrepancies.
Financial Management and Accounting Use Cases for Blockchain Technology
Customers worried about financial fraud may be tempted by the prospect of blockchain’s supposedly impenetrable security if it turns out to be as reliable as it has been seen to be over the past few years.
Since blockchain’s key encryption feature eliminates the possibility of double or fake entries, it is an ideal system for tracking historical data.
When it comes to cybersecurity, the main advantage of blockchain is that it eliminates the possibility of a single point of failure. End-to-end encryption and anonymity are two more advantages of blockchain technology.
Blockchain is an excellent tool for storing large amounts of data due to its immutability and the fact that all computers in the network constantly confirm its content.