The world has changed a lot over years. Technological development is proliferating at a new pace like never before.
Exploring the Impact of Blockchain Technology on Modern Businesses
Everything has turned digital, be it ordering food, hiring a cab, attending classes or shopping. How could money stay behind in this new era of change? And so, cryptocurrency or digital currency came into picture like bitcoins, Ethereum, Litecoin etc. which were built on the backbone of blockchain technology.
What is blockchain?
A blockchain is a decentralized, scattered and public digital ledger or database which includes records called blocks that are used to record transactions across a network of computers. Once a record has been added to the chain it cannot be reversed. The records or transactions that the network approves are added to the block which contains a distinct code called a hash. Learn Transformation guides fellows to the following pointers will give an overview on blockchain:
- Blockchain is an earthshaking technology, the handiwork of a group of people known by the pseudonym- Satoshi Nakamoto.
- Blocks store information about transactions and together they form a blockchain.
- User’s purchase is recorded without any identity revealing information using a unique digital signature which can be generated by a secret key known only to the user. So, it is completely safe.
- Each block stores a unique code called a ‘hash’ (cryptographic codes) that allows users to tell the block apart from every other block.
- The three main properties of Blockchain Technology which have helped it gain widespread attention are: Decentralization, Transparency, Immutability.
How is blockchain transforming business and money?
In the 21st century, finance offers the strongest use for the technology as known by Learn Transformation. The person who has money has power and appropriate use of technology can augment that power. Our global financial system deals in truck loads of money every day. But the money we trade in can bring with it problems as well like adding cost through delays, redundant and back-breaking paperwork, fake notes, in danger of being stolen etc.
The digital currency rules out these issues. Now people are moving towards the cryptocurrency where the blockchain is more trustworthy than banks or government.
Here are organizations and businesses which are heading towards blockchain as you scroll:
1. Banking sector:
- Banking sector has always been in touch with problems in terms of rectifiable of loans granted by them. Usage of Blockchain technology gives a quantum leap to it as all the transactions will be recorded in the blockchain and are easily accessible. This helps the banks in tracing the loopholes of the loaned funds. It decentralizes the bank and gives the customers, security over their transactions and greater transparency.
- Blockchain technology can help the banks to solve the problem of establishing identity by offering cryptographic protection that ensures the transparency.
2. Payments and loans:
- Payments due to underdeveloped systems create security concerns as they are open to cyber-attacks. Here, blockchain technology gets rid of all intermediates in the payment process to lower the costs of process between different clients.
- It decreases deceptive moves, inaccuracy and forgery as programs don’t make mistakes. Under the blockchain technology, all the documents can be recorded in an archive where all the authorities involved can access the real-time data. This will lead to greater efficiency and will allow the parties required to track the transactions with proficiency.
- It becomes essential for the financial institutions to build a database containing all the information of the customers including their identity proof to circumvent hoodwinks.
3. Trade finance
- BlockChain helped in reducing friction and cost, up heaving speed and the transparency of cross-border trade with accounts on a ledger.
- Faster, cheaper, transparent trading with digital ledgers will give a source of truth on all trade deals to dealers and customers. They can now also have access to information on environmental, social and governance that could help meet sustainable development goals that are the need of hour.
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4. Insurance Companies:
One day, cryptocurrency will take over money as smart phones have taken on alarm clocks, physical calculators and what not. That day is a bit far but not too far
- The insurance sector faces a lot of pains due to inefficiencies, frauds in claim settlement which pushes the costs graph up and profits down like an uneven staircase. Application of blockchain technology becomes a great boon here as all the relevant information is available to the company.
- Blockchain helps the companies and regulators to access the necessary information. It helps them in settling the claims at a much faster pace. Companies can now get the whole matter of that property with ease and can detect whether the claims made by the claimant are legitimate or not. This will bring in more efficiency and the companies will be able to cut down the operating costs and can earn higher profits.
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In this article, we covered some details about blockchain, cryptocurrency, digital transformation through blockchain in different sectors like banking, payments, trade and insurance.
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