A blockchain is a distributed database where each entry must be approved by a network of peers without any intervention from an intermediary or central authority.
This distributed and decentralized nature of the database makes it highly secure and transparent as multiple nodes (peers) in the network have a copy of it. If there are irregularities in a single node’s database, other nodes in the network can report and correct them.
This is a desirable feature not only for the financial industry, but for any industry that values the security and transparency of their data.
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Thus, several companies in several sectors have either integrated the blockchain into their business model, or are in the process of doing so. And in the years to come, we could see blockchain functionality in many, if not all, companies!
Here are some spaces we could see blockchain revolutionizing in 2022:
With rapid globalization, the need for fast, convenient and secure international money transfers is increasing. Until now, sending money across borders was cumbersome and took hours or even days! But all of that could change once blockchain technology is added to the mix.
International transactions supported by blockchain technology would eliminate intermediaries who slow down the process. Transactions would also become more secure. It is a future that is not too far away. A company called Ripple is already working on instant and reliable international transactions using blockchain technology, and their efforts could bear fruit in the next few months!
Blockchain technology also has the potential to reshape capital markets for the better. A recent survey by the Greenwich Coalition, a financial advisory organization, shows that the total annual budget for enterprise blockchain applications in capital markets has been around $1.7 billion since 2018. Implementing blockchain technology in capital markets can speed up clearing and settlement, consolidated audit trails, and improved operations.
They say democracy is only as strong as its freedom to vote and its structure. This is a big problem given the current electoral system, which is governed by a central authority and, as such, is vulnerable to internal and external attack.
Fortunately, these problems can be solved using blockchain technology. Details of a particular vote can be checked and added to the database by multiple people. This makes the whole 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.
Money Laundering Protection
Blockchains also use asymmetric encryption methods to secure the data stored in the blockchain. It uses a cryptographic hash function that uses two keys. A public key known to all and a private key that is held only by the person carrying out the transaction. This could be extremely useful in the fight against money laundering. Encryption can be used to store Know Your Customer (KYC) information, which allows financial institutions to identify their customers.
Blockchain technology can also be extremely useful in the energy sector. It can help execute energy supply transactions and provide a basis for energy reading processes such as metering and billing.
There may be various additional uses of Blockchain in energy, such as renewable energy certificates, emission quotas, asset management, and ownership documentation.
(Edited by : Jomy Jos Pullokaran)
First post: STI