How Blockchain Technology Improves Real-World Applications
Blockchain technology is familiar with cryptocurrencies such as Bitcoin, Ethereum and Litecoin. In fact, blockchain has great potential in fields other than cryptocurrencies. Blockchain technology offers excellent support for numerous applications, from use in financial services to supply chains to government.
Many governments and municipalities have already enacted new laws that include the use of blockchain. Governments and organizations are using blockchains for a variety of specific functions, such as the fast and efficient transfer of value and the maintenance of transparent and immutable transaction records with reliable audit trails.
The list below showcases a number of blockchain applications that are being adopted in both business and industry.
Blockchain accelerates communication acceptance of IoT devices
Smart home appliances constitute the Internet of Things (IoT). Storing the data collected from these devices on the blockchain allows users to make the data immutable, thereby making it more difficult for hackers and cybercriminals to tamper with the service.
Blockchain also enables the digitization of assets through IoT sensors, allowing companies to label assets and provide a transparent tracking system. Digitization makes it possible to identify the location and condition of items. Moreover, blockchain can store, manage, protect and transfer all this information as desired.
How does it work? In blockchain-based applications, each device is given a unique identifier and the user holds a password that can be accessed from a smartphone. This password allows users to control each device and know that all transactions and messages are encrypted and passed over a secure network. All configuration changes to the device are stored in a tamper-proof blockchain solution, making all configuration changes auditable.
Blockchain simplifies and secures legal and personal documents.
Smart contracts are another growing application area for blockchain technology. These contracts essentially eliminate middlemen by resolving trust issues. This makes the agreement between the two parties more efficient and more reliable. Blockchain use cases in the smart contract category include everything from smart contracts in insurance to copyright management, clinical trial tracking, and property title transfers.
Personal identity protection is another area where blockchain has made a significant contribution. By encrypting an individual's identifying assets and making this information accessible to citizens, blockchain can increase the trustworthiness of record keeping. Blockchain technology gives individuals control over their digital data and, consequently, how it is accessed and utilized by various parties.
The same applies to wills and inheritances. Digital wills and signatures are a convenient way to create wills due to the high risk of fraud. Simply put, individuals can benefit from blockchain technology to prevent tampering with their wills. Testators can distribute their assets to their heirs via a “cryptographic testamentary network” that can only be accessed by authorized parties. It is basically built in the form of a smart contract that automatically executes upon the death of the testator.
There are many applications of blockchain in the financial industry.
Blockchain is impacting a variety of investment management activities. Asset tracking, reporting, trading and settlement can greatly benefit from blockchain. Blockchain offers a range of capabilities to improve the investment management process by making it easier for everyone to access a single source of truth. Blockchain transparency allows each party to easily verify transactions, while data is stored in an immutable record, improving overall data security.
The reality is that existing trade finance processes are inefficient and have vulnerabilities that allow fraudulent transactions. Blockchain can digitize trade finance and enable transparent governance while reducing complexity and the number of intermediaries involved. In addition, it reduces the risk of fraud, counterparty risk, human error, and enables faster processing.
Collateralized debt obligations or collateralized equity securities are traded in the capital markets. Blockchain will change the structure of capital markets as it affects each stage of the capital market trading process. Ultimately, blockchain benefits across pre-trade, trade, post-trade and securities servicing.
Finally, globalization will lead international organizations to conduct more cross-border transactions. By eliminating the need for intermediaries, blockchain has the potential to enable safe and efficient settlement in cross-border transactions. Multiple organizations are now leveraging blockchain to enable cross-border transactions.
These are just a few examples of how blockchain is revolutionizing traditional applications in some industries. There is no doubt that blockchain is on the verge of making many more important contributions to other applications in every industry.
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