Blockchain does so well because it brings more transparency regarding verifying and recording transactions; other people can easily view this data. This decentralized system requires little to no supervision, helping to prevent fraud. Below is the second part discussing how blockchain will help harness the power of these industries.
Cryptocurrency Exchanges
One-way blockchain technology disrupts the finance sector is in the cryptocurrency exchange space. Blockchain lowers the risk of cyberattacks by removing the need for someone to act as the middleman, reducing the chances of hacks, fraud, or human error.
Many people need to realize that some of the most well-known and successful blockchain companies are incredibly centralized from an operations standpoint. Many new cryptocurrencies are doing "dogfooding." They buy and sell crypto tokens but run their entire exchange on the blockchain.
Enigma, the developer for Catalyst, states that they have MIT and Flybridge Capital as supporters. The project Catalyst works as an off-chain decentralized exchange and investment platform without third parties acting as a middleman.
Coinbase and Binance heavily operate from a centralized model. This approach could change as Binance launched Binance DEX in 2019 and acquired the peer-to-peer trading platform Paradox in 2018. Some other projects, like Ethereum-based 0x, work off a decentralized exchange; the crypto exchange world will change as more tokens begin to use this model.
Handling of Estates
Thanks to blockchain technology, wills, and inheritances will all be automatically done in the future. This change involves intelligent contracts, which can help verify who has passed, assist with dispersing assets from the will, and how a choice is legally interrupted based on the deceased person's intent.
The benefit is that no one can play favorites, change the will's phrasing, or try to cheat others out of more money. Blockchain technology will make it easier to ensure all documents are actual and not falsified, freeing the courts from dealing with ongoing family disputes over inheritance.
Some companies are already working on making this technology a common practice. A Japanese company, Zweispace, has made a Smarter Contract Platform that automatically disperses inheritance trusts to those listed on the will once the person's death is confirmed. No more never-ending court battles or bitter family fits over who should have got what, making everything easy.
Accounting
As banks adapt to the changes, blockchain technology brings accountants everywhere. In the past, accountants have used spreadsheets for tax forms and balance sheets for everything involving finances.
Blockchain technology could make that history. Blockchain would make things much faster, keep track of all financial records, and process payments quickly. The ability for a company to seamlessly track all its data using the blockchain could ensure that human error doesn't happen and that there's no chance for fraud.
Loans and Credit
Historically, banks and lenders underwrite loads based on a credit reporting system. The bank or lending agency would evaluate how much of a risk you were and if they could get their investment back. For many decades now, to get a loan, the only place was to head to the bank.
These old systems have always been somewhat hostile if you were an ordinary person looking for a loan. In the US, the Federal Trade Commission estimates that 1 in 5 (20%) Americans have a "potentially material error" in their credit score, negatively impacting their chances of securing a loan.
What blockchain technology does is that it offers much cheaper, more efficient, and more secure ways of securing loans. Cryptographically (this device scrambles the message allowing only the sender and recipient to read it) is used to secure the loan using a decentralized database of historical payments, giving customers across the globe the ability to get the loan they need.
Insurance
The insurance industry will be toppled and turned over by blockchain technology, revolutionizing how firms operate and work. Blockchain technology will lower costs, increase claims processing times, and give customers a better experience.
Insurance companies that use blockchain technology can develop international relations or deals. What makes this possible is how secure and safe blockchain record-keeping is, with no chances of fraud or tampering.
Hungry for more? Join me each week, where I'll break down complex topics and dissect the latest news within the cybersecurity industry and blockchain ecosystem, simplifying the world of tech.