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With the line between the physical and digital worlds blurring, blockchain is rewiring commerce and propelling our transformation into the future. It’s a form of distributed ledger technology (DLT) with the potential to disrupt and grow enterprises of all sizes across various sectors.
It’s no longer a fad overhyped by a few crypto enthusiasts or just an underlying technology for digital currencies. With its shared, immutable network and instant traceability, blockchain is seeing high-value use cases in many industries.
Gartner predicts that blockchain will generate an annual business value of more than US $3 trillion by 2030.
Blockchain is Going Mainstream
With rising privacy concerns, complex supply chains, and a torrent of sensitive datasets, blockchain is a technological breakthrough to address all these and many more business challenges, while reducing costs and improving speed, network management, and transparency.
It helps businesses reimagine their paper-based documentary trade environment and adopt a comprehensive digital approach for each step of a transaction from payments to post-trade processing across a network of computers distributed over hundreds of thousands of computers. This leads to expedited e-commerce and financial transactions enabling businesses to expand their universe of customers, suppliers, and partners.
Blockchain not only removes intermediaries, but also automates different business processes that helps save time and efforts and opens up new growth opportunities.
Key Components of Blockchain
The blockchain space may seem complicated. So, it is essential to understand the logical components of the ecosystem that are critical for its setup and network operations:
How does Blockchain Technology Work?
Step 1: A transaction is initiated.
Step 2: A computer network publicly records each transaction (including all details like time, amount, user information, etc.) into a database.
Step 3: Each node then transmits copies to all other nodes in its network to validate that all copies are same.
Step 4: Each transaction is then validated.
More Ownership and Security, Guaranteed
The two key capabilities of Blockchain make it unique. Firstly, its transaction record-keeping capability proves the authenticity of each transaction and ownership. Secondly, the enhanced security feature that ensures that anyone can openly view the blockchain record, but can’t edit or delete or tamper it in any way.
This has brought a dramatic change in the behavior of customers, who now feel much safer having their most sensitive financial information owned by a business. This digital technology is unusually transparent and has an ultra-secure network.
Other key embedded characteristics include cryptography, immutability, provenance, and anonymity.
Blockchain is Here to Stay
Since blockchain is a public distribution ledger system, it leads to the decentralization of the ledger, making it tamper-proof. Also, the transmitted data is inherently encrypted. So, it’s relatively more secure than the conventional password security system. Thus, the consumers can have greater control over their personal and most sensitive information leading to an increased shift in data ownership back to customers.
Blockchain has the Potential to Change the World
Though there are endless possibilities for the blockchain technology, it finds some high-impact use cases across industries such as:
Blockchain has revolutionized the fintech space. It builds a digital ledger that automatically records financial transactions and significantly improves the process efficiency, while saving up the cost on manual efforts needed for recording.
A Jupiter Research report highlights that blockchain deployments will enable banks to realize savings on cross-border settlement transactions of up to $27 billion by the end of 2030, reducing costs by more than 11%.
Cryptocurrency, enabled by blockchain, also provides protection against fraud and eliminates third parties from transactions. Thus, no intermediaries are required to validate transactions, and it helps businesses get rid of unnecessary layers and ultimately pay only for what matters. The transformative impact of blockchain is apparent in the financial industry as it democratizes financial management and secures digital identities.
Oil & Gas
Blockchain fuels innovation in the energy sector. It enables this sector to track transactions, reduce the use of traditional paper contracts and operational costs, improve supply chain management and trade accuracy, and increase the robustness and efficiency of operations (invoicing and settlements).
It also offers a reliable source of information between counterparties, where transaction value or complexity are high. Overall, it is a novel approach that many energy sector enterprises are piloting to deliver measurable value – from supply chain to security.
Blockchain has emerged as a competitive differentiator for the automotive industry by removing the middlemen and facilitating transaction processing. It offers a host of potential opportunities like decentralized ridesharing, fair car sharing, improvement in supply chain management, safeguarding localized autonomous data, and management of vehicle information and usage data.
It empowers consumers to ‘pay as they go’ and access increased mobility and more cost-effective insurance. Blockchain also interconnects data held by manufacturers, dealers, and insurers.
Blockchain is fast emerging as a business imperative that has the potential to drive the automotive industry into the new age of smart vehicles. It can revolutionize the way data is managed in this space.
And many other sectors
Blockchain is already being hailed as a disruptor for other sectors including health care, retail, telecom, and others. With expert help, businesses can leapfrog pilots and create scalable, enterprise-wide blockchain solutions.