The Blockchain is certainly an innovation that promises to change the way our world operates. A blockchain, as its name suggests is a growing chain of blocks. The blockchain network records data across its peer to peer network, making the data highly transparent.
“DNA is kind of like blockchain – a memory of all the species that have come before.”- Resse Jones
Blockchain network has the ability to disrupt the financial industry as we know it. However, there are a few crucial sectors where the application of the innovative blockchain technology can transform banking and finance.
Fraud Reduction
Every year, at least 45% of financial mediums like stock exchanges and money transfer services suffer from economic crime. The blockchain network is technically new, but because of its ability to eliminate fraud, the network is gaining a lot of attention. Almost every banking sector is centralized and governed, which makes it vulnerable to cyberattacks. At any point of time, a hacker can breach into a system and get complete access.
The blockchain system contains batches of individual transactions with a link to the former block. Blockchain technology will help eliminate the current cons taking place online. The technology will help the financial sector to keep the transactions safe.
Know Your Customer (KYC)
According to a survey, financial institutions spend around $60 million to $500 million to keep up with the KYC protocols. These regulations help to reduce money laundering and terrorism activities. Blockchain technology will enable an organization to individually verify users so that other organizations wouldn’t have to follow the same process. Blockchain technology is beneficial to organizations because they greatly reduce administrative costs.
Smart Contracts
Since blockchain technology can store any kind of digital information, including computer codes that can be executed once two or more parties enter their keys, the technology can enable us to have smart contracts. This code can be programmed to create contracts or execute financial transactions once a certain set of conditions are achieved.
“Blockchain is as significant now as the internet was 25 years ago”. - Anonymous
Other sectors like e-commerce can also use blockchain technology to counter problems. Let’s have a look at the various fields of e commerce that can use blockchain network.
Payments
The payment industry can greatly benefit from blockchain technology, just as the financial sector has. The current payment methods cost users processing fees along with high fees charged by e commerce platforms on any sale made by the user. This fee can start from around 2-3 % of the total purchase of any transaction made.
Request Network and ECoinmerce aim to create a blockchain network using fast and private transactions for any e commerce model. Request Network also wants to use blockchain technology for the financial transactions aspect of the e commerce industry by providing low transaction fees, high security and privacy, and overall an amazing customer experience.
Supply Chain Management
The supply chain management certainly is an important aspect of e commerce and it can be optimized using blockchain technology. Supply chain management has certain issues that blockchain technology can probably resolve. Vechain aims to create a decent visualization of the process. The data recorded on a blockchain is incorruptible, so the supply chain via blockchain technology can be an easy solution for the ecommerce industry. A dependable blockchain network will provide a secure supply where consumers will get every detail of the product flow, which will lead to customer confidence.
Data Security
One of the issues that the e commerce industry faces today is the data storage. Given the industry, a lot of data is stored, most of which is directly collected from users and retailers registered on any platform. The data is stored on centralized networks which are prone to cyber attacks. E commerce companies have suffered and lost a lot of data because of these attacks. But now with the possibility of a blockchain network, such attacks can be put to rest. Blockchain networks are virtually impossible to breach.
Micropayments
The introduction of blockchain technology has will aid the process of micropayments- a business model where an approach to the contents and services is provided, as well as low cost buying is possible. Small amount of transactions don’t do any good to electronic payment systems due to large transaction costs. On the other hand in cryptocurrencies, the size of the transaction does not matter. Thus, with the arrival of digital currencies in the market, users can make micropayments without having to worry about the transaction fee.
Small service fees on popular streaming services are an asset to blockchain micropayment networks and the users no longer have to subscribe to the entire channel. The users can choose videos that they need and regulate the whole process from start to end.
Conclusion
At this point blockchain technology is still developing and promises a secure future.Even more excitingly, new ways of using blockchain technology emerge daily. Now, whether you are directly involved in the digital world or not, it’s necessary to develop an understanding of the technology and how this technology can be used to transform the business and investment worlds.
Feelium is a blockchain technology platform enabling P2P, B2B and B2C transactions. The platform also offers a wallet-to-wallet transfer function for secure and direct fund transfers.