Blockchain technology was invented in the last years of the previous decade, and yet the true potential of this technology is, however, to be discovered even in a dozen years. Even in its known applications, not all businesses and all demographics have shown the excitement it warrants. Yet, certain global events at times dictate the rise and fall of specific technologies. Currently, the world is at war with a pandemic titled COVID-19. There is still time to finally see what the after-effects of this global crisis will be. However, we can be confident that social distancing will be required for quite some time before interaction can be, as is said, business as usual.
One must think what a global pandemic and an emerging technology have in common here to be discussed in the same breath?
Well, not much, but at the outset, we can say that blockchain technology will majorly facilitate social distancing norms in some sectors of the economy. Some fundamental economic structures can directly benefit from this technology, and banking is one of them. Banking is something that we cannot do without since it is the quintessential platform for the economy at every level. Other areas that can experience a beneficial impact are general contracting, government agencies, and even the blockchain supported cryptocurrency. The world is preparing itself against fomites, and the level of autonomy blockchain provides to certain activities makes it advantageous technology acting positively for us. It majorly helps in reducing multiple touch points, physically as well as structurally, that in turn eliminates additional costs to maintain each level. Let us discuss here, how blockchain is a beneficial technology to these sectors in these times:
1). Financial Services:
The ongoing pandemic has again given rise to digital transactions, which are becoming more and more popular with each passing day. Thus financial institutions must explore the virtues of blockchain-based digital transactions. Many optimizations can be achieved to facilitate user needs, which can save a lot of time and money for all parties involved in such a transaction. The banking sector will find that their inclination towards blockchain will help them improve internal and external settlements with much ease. The demand for complete digitization of banking is also growing. Hence, with all banking functions going online and the customer is given more and more autonomy to get things done electronically, security comes under the microscope as a significant concern that can be comfortably addressed by blockchain technology.
Elimination of custodian banks, reduction of counterparty risks, and removal of other middlemen improve capital optimization while bringing down significant operations costs. Automatic execution of smart contracts operating over a predefined set of rules also enhances contractual term performance, ensuring all regulatory compliances are met. Smart contracts governed by a creditable set of business rules are most beneficial for complex financial asset transactions supporting automatic settlements when terms defined are met.
2). Government Agencies:
A government structured over blockchain definition can protect data resolutely, rationalize core processes, and work on efficiently reducing fraud and waste while more trust, transparency, and accountability are being fused into the system. Unchecked abuses of the traditional methods can be monitored and disposed of under a cryptographic regime. A government model with blockchain at its base facilitates the sharing of government entities, along with businesses and individuals over a distributed ledger eradicating failures originating from a single focal point.
Stringent protection of the government, business, and citizen’s data through secure storage reducing labor-intensive processes will reduce corruption and introduce more faith in civil systems. Obscure threats have sensitized citizen data, and the government’s working towards the protection of such data will instill more trust within the system.
Blockchain technology eliminates the need for mediators. The blockchain architecture facilitates peer-to-peer transactions, which allows trust to be granted to the cryptography instead of authorities. Reduced transaction costs thus help the producer and the consumer enjoy mitigation of additional expenses incurred due to the traditional system. A sincere flow of supply and demand is maintained, also keeping the prices in check.
Since tracing the origin and commencement of transactions can be conducted through a reliable approach, deficiencies within the system, as well as attempts of counterfeiting data, can be identified and highlighted, making the setup more secure. The supply chain involving the agri-food system is a large system and highly complex that sometimes leads to unlawful activities such as black marketing of goods if not governed properly. Hence, with a logistics system reinforced by blockchain and cryptography provides remedial as well as corrective solutions to issues of quality and safety assurance revolving around the food sector.
The general decline in the use of physical currency is also paving the way for increased usage in digital transactions. Digital wallets are gaining popularity as the primary agents for transactions for businesses as well as individuals. Yet, a security threat always looms over such digital wallets. Blockchain wallets might emerge as the resolutions in such times. Apart from security and ease of operations, low transaction fees are also a significant benefit that would appeal to potential users.
Since decentralized transactions are immutable, blockchains cannot be altered by other organizations such as significant regulators and corporations. As the eCommerce industry slowly and gradually shows an increased interest in cryptocurrency, more and more blockchain wallets will find integration with their systems, making transactions much easier for consumers. Fast transactions, the capability of managing multiple cryptocurrencies, and convenience in active trading will prove to be reasons popularizing the use of such wallets. Moreover, individual governments are also exploring the advantages of cryptocurrency and are in talks of developing their own currencies, which can function within the government body with better regulation. Such steps will also strengthen the future of this technology.
We have discussed the use of blockchain technology in some of the most underlying structures of our modern-day interaction and living and can see that this technology still has so much to offer to the foundation of these institutions. Various entities at different levels in government, as well as private bodies, are analyzing and testing the outcome of infusing this technology into their operations to find what beneficial results will be yielded. Another positive point that can be concluded is how the reduction of excessive levels not only helps financially but also eliminates the risk of coming into unnecessary contact which is a cautionary need today. The top blockchain technology companies advocate the use of this stimulating device through real-life applications helping businesses step into a more secure future with a reliable stepping stone in blockchain technology.
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