Blockchain technology is gaining traction these days since it adds a transformational value to many industries offering next-gen solutions to improve business processes. Technology is bound to revolutionize a wide range of businesses from education to healthcare, from supply chains to logistics, and etc.
Let’s clear up what is blockchain?
Blockchain is a distributed ledger that stores data in a chain of subsequent blocks maintained on a network of computers. The immutability of blocks enables fraud-free functioning.
Every industry stands to reap great benefits from integrating blockchain into business with its instantaneous payment solutions, elimination of human labor that leads to money savings on data management processes, decentralization and immutability that enhance security and transparency of confidential information.
How does blockchain work?
- Each member of the network has its own blockchain node where the information is stored in an append-only mode;
- If an error occurs, the existing block cannot be changed, instead a new block is created showing the right information;
- The validation of blocks is done using consensus mechanism;
- The whole history of transactions could be easily traced since the input data is irrevocable;
- The implementation of smart contracts enables reaching an agreement without human intervention.
As the technology has been mostly accepted by the finance industry, let’s have a look at how companies use blockchain in finance.
Financial institutions are exploring ways to integrate blockchain technology to make a breakthrough in the industry. Payments processing is one of the most popular ways of using blockchain as it enables real-time payments, data integrity and transparency.
Visa is a payment processing giant that has started to harness the potential of blockchain and invested in blockchain developer Chain.com. The company has been using blockchain for cross-border transactions, also Visa has cooperated with crypto platforms and exchanges to launch cryptocurrency debit and credit cards.
Blockchain has the capacity to streamline the work of stock markets. Multiple parties are involved in a traditional stock market and communication of all of them slows down the process of investment, and here blockchain-powered smart contracts come into play. When the predetermined conditions are met, the contracts are automatically executed marking the investment as valid, and it could be fulfilled immediately.
Blockchain payment system Ripple facilitates transactions in banks and crypto exchanges all over the globe without the involvement of intermediaries.
One more well-known company that utilizes blockchain is American Express that integrated blockchain into Membership Rewards program together with Hyperledger and tested it on an online grocery delivery platform that allows retailers to give loyalty points to their clients. When customers bought goods, they were given points by the bank and the retailer was billed via smart contracts. Since then, these blockchain-based loyalty programs are widely used in a variety of industries to attract customers and boost the recurring gain.
By the way, blockchain plays a crucial role in fundraising introducing Initial Coin Offering (ICO). This way of raising capital is secure, fast and highly accurate. Investors can buy ICO and receive a cryptocurrency token that represents a stake in the company or might allow you to have control over a product or service.
So, the applicability of blockchain is limitless and there’s a great deal of companies which want to embrace this technology, especially businesses with multiple parties being involved. They want to have access to the updated information in order to have a well-organized reconciliation process, data integrity and eliminate redundant processes, but at the same time nobody wants to share sensitive information with partners.
So, the answer is simple, and this is the creation of a private enterprise blockchain that is notorious for an uncompromised level of security where the network is under control of a single organization implementing role-based access that means each employee has its own rights of interacting with the data on network, some may only have a reading mode while others can make changes or information retrieval.
The best way is to consult a blockchain team of professionals who will screen your project description, understand your needs and decide what kind of blockchain network suits you best.
Blockchain technology is, no doubt, a rising trend and as a rule of thumb, companies that stay trendy, take the cake.
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