Blockchain use beyond cryptocurrencies
Blockchain is an underlying technology for Bitcoin and Ethereum cryptocurrencies. This is what it is typically associated with. However, it is way much more and may give so many benefits for those that adopt it, that even governments, central and commercial banks, and various institutions both private and public have expressed willingness to integrate the technology in their business. Blockchain is a distributed database, meaning that a network exists in which every participant has access to the entire database. These participants then get to decide what information goes into the Blockchain. It is impossible to alter information stored within Blockchain once it is recorded. An extraordinary amount of computing power would be required to take down an entire Blockchain.
Solution for fintech industry
Public blockchain enables individuals or organizations confidentially and securely transfer money or digital assets electronically bypassing intermediaries such as banks or similar centralized institutions such as PayPal.
Another benefit arising from this one is that it would significantly reduce costs on transfer as the middle man is removed from transactions. A typical international transfer could cost 40-50 $. That is a great disadvantage for an average user and fintech-blockchain companies could minimize that to a few bucks.
International transfers let’s say USD to EUR may take 2 weeks, even more. Using blockchain solutions (such as Ripple or Stellar) could cut the process to a day or a few hours (from sending a USD via wire transfer in the USA, to receiving EUR in an account, somewhere in Germany).
Transfer of digitalized assets and improved provision of innovative services
A lot of ICOs that have created their own tokens have also built their business projects on blockchain technology. Some offer trading of digitalized assets (cryptocurrencies, exchange of them), others like Debitum Network – B2B or P2B lending platforms online. Fintech companies can offer somebody in the USA to sell his stock in Europe and get fiat cash in a bank account in under a day. Quite soon (when legal framework is built for that), physical assets (gold, silver), even real estate (flat, house, land) could be tokenized. So, for example, a flat could be tokenized to (let’s say) 10000 tokens and if the tokens are bought out in the online marketplace, the rights (or percentage) of rights would be passed on from the previous owner to the new one (who bought the tokens).
Solutions for general business
Smart contracts improve deal making
Companies interacting with each other can implement a code on blockchain to secure a deal. In case, some party refuses or fails to deliver (product, payment, meet obligations) the terms are there on blockchain for anybody to see (transparency) and a smart contract will initiate a freeze on a deal until the guilty party complies to the agreed terms or corrects whatever it is obliged to correct.
Keeping track of the chain of supply of products
Transportation of goods or sending of items (snail mail) may involve quite a number of parties and the items can be lost with a possibility of never being found and the party responsible for it not identified. This results in businesses suffering big losses due to mistakes other parties have made. Blockchain solves that as each specific stage is recorded on the block and everyone can see where products/items were during a specific stage of transportation or where the problems started.
Avoiding theft of personal information and data
Businesses around the world have experienced quite a few hacks and lots of private information was stolen by hackers. This causes serious problems for those whose info has been stolen as well as companies that have been hacked (their image and financial costs to cover damages). Integrating cryptography on blockchain enables excellent security for stored info on the technology as hacking of the system is next to impossible.
Checking who views your ads online
Most companies do advertising and rightfully expect the target audience to view them. Unfortunately, that is not always the case and it is difficult to check who exactly saw your ads and whether they were real humans, not some bots. Lack of transparency in advertising business causes the trust to disappear between companies implementing advertising and those that use them. Use of funds does not often achieve the desired outcome due to fake views. Integration of blockchain solution in advertising will enable companies that pay for ads to see who exactly clicked on their ads, whether they were part of the agreed target audience and etc.
Change is coming
It is obvious that blockchain is a disruptive technology that brought about a lot of changes in the fintech industry, business in general as well as public sectors. Changes come with innovation and both private and public sector can either adapt to that by implementing the technology or become obsolete by falling behind refusing to evolve to companies that are able to meet challenges of current society.