President Mark Emmer Optimize Co., Ltd. Author, speaker and consultant specializing in strategy and strategic planning.
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Given the FTX crash and the ensuing hum, some investors and business leaders are wondering if cryptocurrencies and blockchain are truly disruptive technologies, or just hoaxed Ponzi schemes.
Markets reset when the market is unbalanced. So both extremes can be true when it comes to blockchain. While I and many others see blockchain as the future of the trading ledger, it is also a field where legitimate traders currently coexist with crooks. A crypto fix might be exactly what the market needs.
However, despite setbacks, blockchain seems to be rapidly being adopted. Blockchain’s practical applications and implications go beyond cryptocurrency trading. It is a distributed ledger where all records are persistent and user accessible across multiple computers. IBM identified his four properties of blockchain, including consensus, security, immutability and data validation, making it a unique solution for managing business ledgers and transactions.
From financial services to supply chain management, blockchain is revolutionizing many industries with trustless record-keeping systems. Here are some helpful approaches companies can take when using blockchain as their business ledger.
1. Digital identity management
Accenture has identified five core areas where blockchain-based digital identity management can impact.
• Fast and secure authentication for international travelers.
• Retention of medical records.
• Insurance and maintenance of accurate records to prove ownership.
• Background and training validation.
• Sensitive data and financial institution Know Your Customer (KYC) verification.
Today, verifying someone’s identity and work history typically requires third-party verification, which can be time-consuming and expensive. It would ideally work through a registration station for recording and storing metric information. A user can visit the registration station and get the blockchain ID as her QR code. You can also get public and private keys for secure data sharing.
This individual blockchain identity continues to accumulate new information as the user goes through different stages of life. For example, new associations with institutions such as universities or employers are reflected.
This form of identity management gives businesses easy access to up-to-date and trusted information every time they interact with a user, improving process efficiency.
2. Smart contracts and business automation
According to The International Association for Contract & Commercial Management (IACCM), businesses typically spend more than $6,900 (paywall) on drafting and finalizing legal contracts. Fees include consultation and documentation fees to comply with local legal authorities. A large portion of our spending is spent on preventing fraud and ensuring efficient contract management.
Blockchain ledgers enable automated transaction validation and processing, enabling businesses to reduce contract management costs by implementing smart contracts.
A smart contract is a computer program that runs autonomously on a blockchain network. This means it can run without third-party interference. Implementing smart contracts eliminates the need for companies to hire intermediaries to validate contracts, keeping all transactions secure.
According to Future Market Insights, smart contract management is a $183.1 million industry in 2022, accounting for 10.2% of the total blockchain industry, so there is definitely room for growth.
3. Supply chain management
Blockchain technology can also be used to monitor and track the movement of goods throughout the supply chain. In this way, businesses can track the entire journey of a product from production, shipment, receipt and delivery with greater accuracy than traditional methods.
of harvard business review We identified how blockchain ledgers can revolutionize supply chain management and help with accuracy and more.
When a business implements blockchain ledger management, individual blocks are added to the product’s blockchain identity as it goes through various stages, all relationships, as is often used to ensure food safety. can be accurately tracked at all times.
4. Financial services application
Businesses can also benefit from blockchain’s improved transaction security and trusted identity management for individuals in the following areas:
• Sales, trading and custody management in capital markets.
• Management of asset management funds.
• Issuing letters of credit and financial transactions.
• Insurance management.
• Cross-border payments.
In all these processes, blockchain has the potential to reduce transaction costs and provide greater security.
5. Data exchange and interoperability
With the help of distributed ledger technology, businesses can easily share information with other parties in a secure manner. This allows each organization to access each other’s databases without manual intervention.
For example, Microsoft developed the Coco Framework that allows users to build private networks on top of Ethereum or Quorum. More and more businesses are moving to subscription-based cloud software and hosting. Blockchain frameworks like this help businesses customize different levels of privacy while securely storing sensitive data on the blockchain network.
6. Audit and Compliance
Many businesses use blockchain to maintain a permanent record of all transactions through a secure, immutable system, ensuring operational transparency and compliance.
Crypto trading and speculation do not define the blockchain industry as a whole. It can go far beyond that, and many companies are already using it to revolutionize their business. As you can see, practical applications of blockchain technology for business include streamlining processes, building trust with customers, and improving data security.
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