The popularity of Bitcoin and other cryptocurrencies has shifted attention to blockchain, the distributed ledger technology (DLT) that underpins them.
The fundamentals of blockchain technology are intuitive. The technology essentially takes the form of a decentralized database whose entries are verified using encrypted peer-to-peer networks.
It’s easiest to picture it as a Google Doc that’s been thoroughly checked and encrypted, where each cell’s value is dependent on and confirmed against the values of its predecessors.
However, blockchain technology isn’t only the backbone of Bitcoin; there are a plethora of other applications it might be put to. We’ve included some of its potential uses in banking, business, government, and other sectors below.
Potential Applications of Blockchain Technology in the Financial Sector
Remittances Overseas
Blockchain technology allows for the creation of an immutable record of transactions that is both reliable and time-efficient this is all thanks to secure Bitcoin playing websites, which makes it a great option for sending money abroad.
This may be seen with the introduction of the first blockchain-based service for money transfers by Banco Santander in April of 2018. The “Santander One Pay FX” service utilizes Ripple’s xCurrent to provide instantaneous and next-day cross-border remittances.
Santander has made the process more efficient by cutting down on the number of middlemen often involved in such deals by automating it all on the blockchain.
Santander is a major commercial bank; thus it serves many consumers who may use more convenient and affordable payment options, especially for international wire transfers. By eliminating the need for banks to manually settle transactions, blockchain technology may be utilized to reduce the cost of such payments.
The Stock Markets
The financial sector is another area that might benefit from blockchain-based technologies. The benefits that blockchain technologies provide to the capital markets are outlined in a paper by McKinsey, and they include:
Quicker processing of payments
Streamlined audit trail Enhanced operations Axoni, formed in 2013, develops blockchain-based solutions with a focus on enhancing the capital markets. Axoni has just announced the creation of a distributed ledger network for the management of stock swap transactions, making it possible for the two parties to remain in sync with one another for the whole of an equity swap’s lifespan and share any relevant updates in real-time.
Capitalization on Trade
Traditional approaches to trade finance have been a significant source of frustration for companies due to the time and effort required to complete the procedures involved. Many factors, including the nation of origin and product data, must be communicated during cross-border commerce, and many documents must be generated with each transaction.
Blockchain technology has the potential to improve the efficiency and ease of international trade financing transactions. It facilitates business transactions between companies regardless of physical location.
Auditing for Rules and Regulations
Blockchain’s high level of security is a boon to the accounting and auditing industries by removing the potential for the human mistake and ensuring the authenticity of documents. Even the account holders themselves are unable to tamper with the immutable records created by blockchain technology. Blockchain technology may eventually eliminate employment and the need for auditors.
Anti-Money-Laundering Safeguards
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 establishing and verifying the identities of its customers, and the underlying technology enables record keeping facilitating this procedure.
Insurance
One of the most promising uses of blockchain technology in the insurance industry is in the form of smart contracts. Customers and insurers may both rest easy knowing their claim information is safe and secure thanks to these arrangements. Due to the network’s ability to verify all contracts and claims stored on the blockchain, fraudulent claims would be eliminated, and true claims would be prioritized.
One network that is automating insurance regulatory reporting and reducing compliance procedures is opened, which was developed on the IBM Blockchain Platform in partnership with the American Association of Insurance Services.
Interactions Between Individuals Rather Than Between a Bank and a Customer
Peer-to-peer (P2P) payment platforms like Venmo are helpful, but they have their drawbacks. When it comes to making a purchase, several businesses put up barriers depending on where you live. Some need payment before you may utilize them. Users are understandably wary of making their credit card numbers and other financial details public on websites that are prone to hacking. To overcome these challenges, blockchain technology and its many advantages might be used.
Distributed Ledger Technology (DLT) Use Cases in Corporate Supply Chain Management
The immutable ledger provided by blockchain technology is ideal for use cases like the real-time monitoring of inventory as it is transferred between different warehouses. For businesses involved in moving these items, using a blockchain provides several new opportunities. Supply chain events, like the distribution of freshly delivered commodities at a port to various shipping containers, may be queued using blockchain entries. Blockchain offers a fresh and adaptable approach to managing and making use of 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 data that might be stored on a Data like this can be maintained on a public blockchain where many people may access it without raising privacy concerns since none of it can be used to identify a single patient.
Blockchain has the potential to streamline the process by which specialized connected medical devices are integrated with a patient’s health record as they become more widespread. The data collected by these devices may be stored on a healthcare blockchain and appended to individual health records. Data generated by linked medical equipment is often stored in separate silos, but blockchain has the potential to solve this problem.
Property Investment
Every five to seven years, the typical homeowner will sell his or her house, and the typical individual will change residences over a dozen times throughout a lifetime. The real estate sector is very mobile, suggesting that blockchain technology may be useful. Because of its encryption and other security features, it would make the whole home-buying process more transparent and quicker, and it would also help prevent fraud.
To combat fraud, save expenses, and safeguard the IP rights of material like music recordings, the media industry has begun to use blockchain technology. MarketWatch predicts that by 2024, the worldwide market for blockchain applications in the media and entertainment industry would have grown to $1.54 billion.
Eluvio, Inc. is a platform that has been in the limelight for its use of blockchain technology in the media. Eluvial Content Fabric, a blockchain-based solution formally released in 2019, allows 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 media behemoth MGM Studios using the service for “global streaming to online, mobile, and TV everywhere audiences of ‘certain titles.'”
According to PWC, not only might energy Blockchain technology be utilized to perform energy supply transactions, but it could also serve as the foundation for invoicing, clearing, and metering. Other possible uses include ownership records, asset management, origin assurances, emission permits, and renewable energy certifications.
Use Cases for Blockchain Technology in Public Records
Records of persons, such as those about births, deaths, marriages, and transfers of ownership, are the responsibility of national, state, and municipal governments. However, it may be challenging to manage all of this information, and many of these records still exist solely in paper form. It may be inconvenient, time-consuming, and even discouraging for residents to have to physically visit their local government offices to make changes. There is potential for blockchain technology to greatly improve the security of these records while also making them much easier to maintain.
Controlling Your Identity
Supporters of using blockchain technology for identity management argue that if a sufficient amount of data is stored in the distributed ledger, users will only need to supply minimal information (such as date of birth) to verify their identities.
Voting
Voting may be made more accessible and secure with the use of blockchain technology. Even if a hacker gained access to the terminal, they wouldn’t be able to compromise the network as a whole thanks to blockchain. Government authorities would have an easier time tallying ballots if they could assign each vote to a unique ID and fraudulent IDs were hard to produce.
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Taxes
With enough data saved on the blockchain, the time-consuming, error-prone process of filing taxes might be greatly streamlined by blockchain technology.
Charitable Organizations
The escalating anti-trust issues faced by charities may be resolved by blockchain’s capacity to demonstrate to donors that their contributions are being used appropriately. Moreover, blockchain technology might aid such NGOs in more effectively remitting those contributions, managing their resources, and improving their monitoring skills.
Administration of Laws and Regulations
Maintaining records is a crucial source of regulatory supervision, but the repercussions of not doing so are far more severe. That’s why businesses can’t afford to ignore compliance. With blockchain, authorities and companies may access updated records instantly, eliminating delays and facilitating the early detection of red flags and discrepancies.
Financial Management and Accounting Use Cases for Blockchain Technology
Customers worried about financial fraud could be tempted by the prospect of blockchain’s supposedly impregnable security if it turns out to be as reliable as it has seemed to be over the last several years.
Management of Records
Since blockchain’s core encryption feature eliminates the possibility of double or fraudulent inputs, it is an ideal system for keeping track of historical data.
Cybersecurity
When it comes to cyber security, blockchain’s primary benefit is that it eliminates the possibility of a single point of failure. End-to-end encryption and anonymity are two more benefits of blockchain technology.
“Big Data”
A blockchain is a great tool for storing large amounts of data because of its immutability and the fact that all computers in the network are constantly confirming its contents.