When blockchain was first invented, it was designed to be used with the Bitcoin network. It was designed to help make sure that all transactions on the network would be accounted for and it added some safety and trust to the system. And as Bitcoin started to grow more and it has gained more use around the world, people started to notice the blockchain technology, and they began to imagine some of the other uses that they could do with blockchain.
Learn more: Blockchain Programing
For those who do not dig in deep enough, the blockchain sometimes looks like a basic accounting tool, something that will hold onto all of the Bitcoin network's transactions, but they did not see it as something that could be expanded out to some other areas, when you start to realize all the things that blockchain can do, many companies are getting excited about how blockchain will be able to help them in the future, and lots of money is going into blockchain right now to help out various industries.
The biggest industry that is using blockchain technology right now is in the finance arena. And since this industry works the same as the transactions on the Bitcoin network, it is really easy to develop some new platforms that will work for the finance industry as well. Blockchain has been shown to process information through the financial industry much faster because it is on a single distributed ledger and it can eliminate the intermediaries so that the process will be faster. This technology can be utilized in many different niches of finance depending on how the platform is developed such as currency transfer, payments, stock trading, and settlements.
Blockchain application in Finance
The process of transferring any value is a really slow process, especially when you try to compare it to the length of the financial transactions. Depending on the location of the money sent, it can take you a few weeks to move the money. This is really true when you are trying to move money over to other countries and sometimes waiting for the exact exchange rate can be a hassle and will mess with the amount that you pay when it is time to complete the transfer, when you work with the blockchain ledger, you will be able to cut down on the time that it takes to complete these transactions and you can cut down on how much it costs to transfer the value. All of this is so important for helping the financial industry to help their customers.
See also: Blockchain 2.0
Blockchain application in Finance
Not only will this kind of technology be able to help with regular banking methods, but it could also help with share trading. The traditional methods of trading in the stock market will be slow. You need to take your time to look at the stocks, talk with your broker about them, and then before you can make a trade, you will need to make sure that your money can transfer from a bank account over to your trading account. Some people will speed this up and keep a bit of money reserved inside of their trading account, so they do not have to wait when it is time to trade, but there is still some time that you have to worry about. With the help of blockchain, you will be able to speed up the settlement process and can make it easier to get into the trading right when you want to, not when the bank makes it convenient. This technology is so efficient that the NASDAQ has already started to use it with share trading.
The blockchain that NASDAQ is using is the pre-IPO share trades, which makes it easier to transfer share ownership of private companies between the investors before these shares are listed on the stock exchange. This blockchain is already working which shows how easy it would be for other businesses in the finance industry to implement this as well.
There are already some companies who are using this kind of technology to help run their business, not just the NASDAQ. Some of the other options include visa, citibank, and Capital One. These three companies are investing in a distributed ledger that will make it easier for them to complete transactions between their institutions, speeding up the process and helping customers get the best service possible.
This is not the only example of the changes that are occurring with the blockchain technology. Ripple is a good example. Ripple is a payment network that is being used to transfer anything of value such as currencies and commodities. Some financial institutions are already investing in and using this kind of technology because it helps them to send out payments at a low cost, and in real time, compared to the other methods that we have been relying on. Right now, there are fifteen of the top banks that are working with Ripple to continue making this kind of platform.
Also, there is a tech firm that is known as R3 that has been working with twenty-five banks, such as Wells Fargo and JP Morgan, to make their own distributed ledger. The companies that have joined this project are a part of the R3 consortium. This is very similar to what is happening with Ripple, but this one is a bit different since it is working with the ledger rather than the exact blockchain technology of Ripple. The distributed ledger that R3 is developing is a bit different than what the blockchain technology, but they do have some similarities and is offering a lot of the benefits that blockchain already does. Eleven banks that belong to the R3 consortium are already connected to this ledger and are using it to help them provide better customer service.
In England, things are changing up as well. The Bank of England is working to develop their own blockchain technology as well. The Bank of England has decided to change up their own personal database to make it easier to add in this kind of technology to their business plan and they are already teaming up with others to create this technology so that they can serve their customers better in the future. The hope here is that the Bank of England would be able to utilize this technology to help them defend against the many cyberattacks that are coming to their way and that they would be able to settle up transactions faster. Since many major banks around the world are already implementing blockchain technology and distributed ledgers, The Bank of England is hoping that this system would help them to keep compatible with the other systems as well.
As you can see, there are already many different sectors as well as companies within the finance industry who are working with this kind of technology. There are even some major banks who are working to see if they can add in this technology instead of using their own databases because it can help them save money, complete transactions faster, and provide better service to their customers, while this kind of technology is still in the development phase, there are a lot of potentials and some big companies who are ready to start adopting it once the right platform comes out.
Learn more: Blockchain application in Medical
There are many ways that this technology can be used, especially when it comes to the finance industry, whether they want to speed up the transaction time to customers, save on some of the costs of their ledgers, or they want to make sure they are changing the future of technology, there are many reasons that people will choose to go with this new kind of technology.
