Distributed Ledger (also known as Blockchain) is the technology that makes the history of any digital asset immutable. This means that the origin and journey are transparent and easily accessible through blockchain app, cryptographic hashing, and decentralization.
Blockchain was a hyped technology with no practical application. Technology has progressed much faster and on a larger scale. Blockchain’s most famous use case, Bitcoin, gave the technology the spotlight it deserved. The rest is history.
Although it took over a decade for Blockchain to be recognized as a practical solution to many pressing industry challenges, it is now clear that the technology is a viable option. The overall investment in Blockchain technology is rising and many incumbents either have acquired a Blockchain app development agency or have hired a team of experienced blockchain application developers in-house.
Global survey respondents overwhelmingly stated that Blockchain was a top priority in their organizations for 2019. 23% have already started Blockchain deployments. Nearly every industry has discovered a compelling use for Blockchain, from financial services to healthcare to telecom to life sciences. Now the question is not ‘Why should we adopt Blockchain?’ but ‘How do we adopt Blockchain?
Blockchain App Design Offers Four Main Benefits
1. Stringent Security
Blockchain application development has the most obvious advantage: security enhancements. Hackers and fraudsters can target business databases, particularly those in the Financial Services and Insurance sectors. All transactions in a Blockchain network are seen by authorized members before they are entered into a decentralized ledger. It is impossible to alter data by changing it from one point, as the information is stored in a series of computers instead of one.
2. Unparalleled Transparency
Since Blockchain is a distributed-decentralized ledger where the network participants have access to the same data across all their nodes, the data can be updated or set out for further distribution only after a consensus is achieved. To change one record on the same track, you would need to alter all subsequent records. This feature of immutable history is what makes Blockchain development the next big thing for previously opaque organizations like Financial Services and Insurance.
According to a study, Blockchain could reduce infrastructure costs in the Financial Services sector by 2022. This would result in savings of between USD 15 billion and USD 20 billion per year. This would be possible because of a reduction in manual work, such as pooling, editing, and sharing data. Employees would be able to focus on the important things and save time on redundant, time-consuming processes. Compliance reporting and audit will be much easier.
4. Incremental Efficiency
Blockchain eliminates the need to have an intermediary in the payment process, which has traditionally been complicated. Blockchain mobile app development can facilitate faster transactions in cross-border peer-to-peer remittances. In regions without financial services, seamless payments can improve the efficiency of transactions. A central system of recording ownership can make property management workflows and contracts in the Finance and insurance sectors more efficient.
Blockchain Benefitting These Sectors
1. Financial Services and Banking
Blockchain app development has been dominated by the banking and finance sectors. FinTech startups were among the first to adopt Blockchain technology, whereas the rest of the sector considered it to be a frill and too ineffective to have any practical applications. FinTech was able to not only consume it but also saw a return on their investment by adopting Blockchain application development services.
Blockchain Fintech App Development provides a secure way to record immutable records for the millions of transactions that occur within a Financial Services Organization. This distributed and decentralized ledger system reduces fraud risks that have plagued the Finance pipeline. The wider adoption of the technology is expected to make transactions cheaper.
Underwriting and claims processing in the insurance industry is the most labor-intensive and time-consuming process. It is therefore only natural that early adopters of Blockchain look into these areas. To deploy tools that give visibility into existing and future insurance policies, or to help with claims related to the property/insured in question, an insurer can partner with a Blockchain application company.
Blockchain can be used to reduce costs, improve dynamic pricing, simplify client onboarding, and improve risk assessment. Blockchain apps are not only useful for underwriting and claims, but they can also provide seamless and transparent experiences in binding new policies to insureds.
3. Data Management
Data Management is an integral part of all industries. It is crucial that data be accessible only to authorized users in every workflow. Blockchain application development can be used as permission-based platforms to help stakeholders detect data tampering. Even if an attacker gains access to the Blockchain network and associated data, they won’t have the ability to retrieve that information. The data blocks are fully encrypted, ensuring secure flow for the intended user.
The focus of Blockchain app development has moved to secure communication protocols over the Blockchain network. These protocols are theoretically invulnerable to man-in-the-middle attacks. An attacker can intercept the network and still not forge the identity of the interlocutor or ingest any data.
4. Real Estate
One traditional industry that will soon see disruption is real estate. A Smart Contract, which is simply a computer program that facilitates the transfer of digital currencies/assets directly between two parties, can be described as a program. These contracts allow assets such as real estate to be tokenized, traded like bitcoin and ether, and transactions can be made online.
Blockchain apps are able to facilitate legal documentation, listing, payment, as well as other functions. Conventionally, intermediaries are required to take a commission and pay a fee for real estate transactions. Blockchain allows for faster transactions because they only occur between the buyer and seller. Blockchain allows fractional ownership which lowers the barriers to investing in real estate. The asset can also be traded like stocks.
5. Product Supply Chain
The use of blockchain in streamlining the Product Supply Chains is worth a special mention, as the COVID-19 crisis has placed enormous pressure on this business function. This disruption has had a severe impact on the supply of critical medical equipment as well as pharmaceuticals. Multi-party international multi-party contracts that can be worth millions of dollars and take months to negotiate are signed in hours. The main problem is the lack of trust among the three parties–demand and supply, as well as the financial instrument.
Blockchain applications can be used as a trading and financing tool to guarantee distributed ledger-backed payments factories. These payments are made as and when production milestones have been met and products move through the supply chain.
Although the basic function to verify and transfer financial information can be applied to most industries, at the moment, some industries are more suited for Blockchain-mediated solutions. Healthcare, Government, and Financial Services are the main players. Blockchain-based solutions can address issues in trade finance and global payments, as we saw recently with the COVID-19 crisis. This would require a cohesive investment in Blockchain application testing and development for different use-cases.