Blockchain technology is doing really great wonders to the different industrial sectors, globally. Right from providing the commission free transactions and secured payment gateways to the customers to the advanced digitization for storing the data, Blockchain technology is winning the hearts of every human.
While there are still confusion among the people and in some industrial sector about the Blockchain technology integration, it will be surprising fact for some of them that this technology is already being launched for some financial projects in the USA and the European countries. For the huge possibilities, Blockchain technology is booming in the financial industries at the great pace.
BLOCKCHAIN TECHNOLOGY & FINANCIAL SECTOR
Over the years, the services in the financial industries has evolved, making them more user friendly by merging it with the technological base. Lately, along with the leading USA and European banks who have launched and integrated with the blockchain, the international payment system, Visa too has joined the group of these banks for the same.
The reason behind this collaboration is the provision of the faster as well as cheaper payment ways with the help of the Blockchain technology. There is procedure for how this technology works in the sector.
- To start the process with the simple statement, Blockchain technology works like digital wallet in the financial sector, helping to make the easy transfers.
- The structure of this digital wallet has the following elements:
- Wallet Address: It is the unique identifier of the blockchain system, helping to send and receiving the money. It comes in 160-bit hash. This is the very much reason why encrypted addresses look likes the combination of letters and numbers.
- Blockchain Technology Transactions: It is represented as the record in a NoSQL storage available on the Blockchain wallet.
- Blockchain Technological Blocks: It stores information and the transactions about the hash of the previous block as well hash available in the current block. This blocks will form the chain which will be based on the technology, of course.
How will this process help the financial sector?
There are various and several financial services which can be benefited with Blockchain technology.
Money Transfers
To transfer the money from one country to another is always stressful. There are exchange problems, commission fees of the banks and the anxiety whether the transaction will be successful or not. To overcome such slow and expensive process, Blockchain technology comes to the rescue.
Blockchain can help to boost the transactions with significantly reducing the costs. The estimates state that in 2016 international currency transfers had the huge costs, varied from 5% to 20% of the total transfer amount. Blockchain technology can help to reduce the 2-3% from the total cost/ amount.
Smart Contracts
It is the part of the Blockchain technology. They are the computer programs helping to verify, force the negotiation or the execution of the agreement.
User ID
In the Blockchain technology, the blocks store the information about the user. This information is further used to make or create the secured transactions. Also this same data stored in the block is used for other financial services.
Stock Exchange
Without the need of the brokers as the middle or the third party, stock trading can become the independent act. How? The Blockchain Technology makes the trading as the decentralized system.
OTHER INDUSTRIES BENEFITING WITH THE BLOCKCHAIN TECHNOLOGY
Not only the financial institutions but also there are other industries which will be benefited through Blockchain technology.
Cargo & Logistics
It is the most busiest sector, delivering the services with innumerable processes that has documents and payments. Blockchain technology can be helpful to eliminate the processes involving such intermediaries, thereby reducing the administrative burden, saving the money.
Estate & Properties
In this industry, Blockchain technology can be helpful by improving the audit measures of the rental agreements for the estates. How? The technology can review the rental contracts, monitor and also validate the payments. Hence, all this aspects can help the sector to improve greatly.
Auto & Car Transportation
This is the most benefiting sector from the Blockchain technology. If you are in the car rental business or in the sale/ purchase of the cars, it becomes easy for the registered users to validate the present/ current owner of the vehicle. Not only this, you can change the ownership as well as form the secured digital key which will be helpful to anyone who will rent a car.
Education & Training Centers
In this sector, it will be easy for the learning centers and the educational organizations to authenticate the students certificates as well as the documents. Already the Californian Holberton School in San Francisco, USA has announced its Blockchain technology launch for the verifying students documents and certificates.
Healthcare & Medicinal Services
This industry is suffering already from various issues like securely sharing the data. The Blockchain can help the sector to reduce the workload greatly. How? With the help of the encryption of the data, the exchange of the medical data and documents will be assembled on secured platform.
Here, the secured medical data exchange can also be done with the help of the digital signature technology. This means, except the user who has exchanged the medical documents on the platform, no one else can forge or enter the medical base and take the look at them.
At present, based on the R&D, these are the industries which can enjoy the boost in their services through Blockchain. Sounds so simple, right? Easy to execute and interesting to use? Although it is very much promising technology, there are some factors which can lead to the difficulty and challenges.
CHALLENGES FOR THE BLOCKCHAIN TECHNOLOGY
Apart from financial technologies, there are certain setbacks for the technology which can be overthrown in the coming age of the time.
Blockchain Technology is Arising
Yet, there will be some years, spend on making the people believe about this technology is the changing factor for them. Indeed, the Blockchain can help to simplify the verification process as well as limiting the data, making the technology widely acceptable is another challenge. To trust the Blockchain completely for storing the data and other information will take some time for the people to understand in detail.
Unpredictable Regulatory Status
This is particular true for the financial institutions. The currencies are created by the central government and regulated by them, therefore, it is not predictable about the status of the technology will remain stable or not by the government regulatory actions.
Consumption Power
To verify several things at a time, Blockchain demands the high computing consumption power.
Expenditure
Although the technology is cost effective, meaning can save huge amount of worth in the industry, yet the initial cost for the execution and the integration of the technology is expensive.
Restoration/ Integration
To develop the applications with the help of Blockchain, there is a need to create the significant changes in them or complete restoration of the existing systems with the new one, i.e. Blockchain technology.
It is always advisable as well as suggestive for the app developers and the owners to first study the new technology in depth, doing the R&D, understanding the minute details.
First of all, be clear for why you will like to develop the application with this new technology and then get into the Blockchain based application projects.
For those developers and the app owners, irrespective of the challenges in the technology, want to go ahead with the new system, here is the process for the blockchain integration with new building application.
DEVELOPING/ BUILDING THE APPLICATION WITH BLOCKCHAIN TECHNOLOGY. HOW?
From the R&D, we have found the three ways to integrate or merge the Blockchain technology with the applications while developing it.
Payment Service Provider:
This can be used for the Bitcoin currency. By adding the few coding lines to your product, the usage of the payment service provider becomes easy. This will help you to not only use the cryptocurrency but it will make simple for you to transfer as well as convert the money and navigate to the bank account. The best example here can be BitPay. The platform provides the extensive API and the integration tools with the application. Bonus is, there are zero commission charges for the transaction.
Instant Services
It means, ready made services offering the HTTP API for the Blockchain technology. Why use these systems? The reason is simple. These services are only focused on the provision of reliable system infrastructures.
This will give the sigh of relief to the developer as they will not have to worry about the integration of the Bitcoin functions and connecting to this ready made network because of the reliable framework.
The best examples for this can be: Helloblock.io: it is the API for storing the wallets, addresses, blocks and operations. Another example is Insight.is which is open source for the Node.js application which is based on BitPay.
The insight.is integrates with the Bitcoin RPC interface thereby providing the complete HTTP and WebSocket API.
Intrinsic Blockchain Integration
You can create and do the Blockchain integration all by yourself. How? Utilize and function on the ready made libraries, choosing the one. For example: you can use bitcoinj which is a java library controlled by bitcoin wallets. This allows the integration of the bitcoins with the application. Toshi.io permits you to integrate blockchain solutions with the applications and use its API as well.
CONCLUSION
The Blockchain technology is definitely an interesting as well as too much complex to understand for the people at the present scenario. Although there are private technological firms who has already introduced the Blockchain, like IBM.
The IBM introduced the IBM blockchain services which is the public cloud helping the customers to create the secured blockchain network. Without any restrictions, the service is available to everyone- private firms as well as the state bodies.
The members here are allowed to exchange the information without any hassles and insecurity. This information can only be seen by the users or the members of the network. Once the information stored in the block network, there is no way to look back or make the changes.
The launch of the blockchain technologies is not right now across the globe, unifying all the members together under one roof but the implementation is happening in the private spheres already. Currently, it is the only platform for the blockchain to bloom.
