A blockchain is a distributed database where every entry needs to be approved by a network of peers without any intervention from an intermediary or central authority.
This distributed, decentralised nature of the database makes it highly secure and transparent as several nodes (peers) in the network have a copy of it. If there are any irregularities in the database of a single node, the other nodes in the network can point them out and correct them.
It is a desirable feature not only to the financial industry but also to any industry that values the security and transparency of its data.
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As such, several businesses across several sectors have either assimilated blockchain into their business model or are in the process of doing so. And in the coming years, we could see blockchain features in many businesses, if not all of them!
Here are some spaces we could see blockchain revolutionise in 2022:
International Transactions
With rapid globalisation, the need for quick, convenient, and secure international money transfers is on the rise. Until now, sending money across borders was tedious and took several hours, days even! But this could all change once blockchain technology is added to the mix.
International transactions backed by blockchain technology would remove intermediaries that slow down the process. Transactions would also become more secure. It’s a future that isn’t too far away. A company named Ripple is already working on instant and reliable international transactions using blockchain technology, and their efforts could come to fruition within the next few months!
Capital Markets
Blockchain technology also has the potential to overhaul the capital markets for the better. A recent survey from coalition Greenwich, a financial consultancy organisation, shows that the total annual budget for enterprise blockchain applications within the capital markets domain has been roughly $1.7 billion since 2018. The implementation of blockchain technology in capital markets can provide faster clearing and settlement, consolidated audit trails, and improved operations.
Digital Voting
They say democracy is only as strong as its voting freedom and structure. This is a big issue given the current voting system, which is governed by a central authority and, as such, is vulnerable to internal and external attacks.
Fortunately, these issues can be solved with the help of blockchain technology. The details of a particular vote can be verified and added to the database by several individuals. This makes the entire process secure and transparent.
A company named FollowMyVote is currently working on a system that will use blockchain technology to ensure a transparent online voting platform.
Protection from Money Laundering
Blockchains also use asymmetric encryption methods to secure the data stored in the blockchain. It employs a cryptographic hash function that uses two keys. A public key that is known to everyone and a private key that is only held by the person making the transaction. This could be extremely useful in combating money laundering. The encryption can be used to store the Know Your Customer (KYC) information, which is how financial institutions can identify their clients.
Energy
Blockchain technology can be extremely useful in the energy industry too. It can help execute energy supply transactions and provide a basis for energy reading processes like metering and billing as well.
There can be various supplemental uses of Blockchain in energy, such as renewable energy certificates, emission allowances, asset management, and documenting ownership.
(Edited by : Jomy Jos Pullokaran)
First Published: IST