With rapid digitalization & constant developments in technology, online payments & finance management have become pretty easy & convenient. Today, one does not have to think twice while making a digital transaction or worry about delays in the proceedings.
While we are talking about digitalization, technology, and online transactions, it is hard not to mention Cryptocurrency, which has swiftly gained traction across different corners of the world. For those who aren't aware, Cryptocurrencies are a form of digital currency designed to function as a medium of exchange using a computer network and are not reliant on any central authority to uphold or maintain it.
There is a swift rise in the incidences of cyber-attacks & threats and fraudulent activities across various digital applications. Hence, there's an escalating need for a robust security system that eliminates such possibilities and provides a secure transaction after the required verifications & traceability. It is where the adoption of blockchain technology is burgeoning for cryptocurrency payments across different industrial verticals worldwide.
Recent studies have cited a whopping 73.1% CAGR for the Global Blockchain Market during 2022-27, which will be expanding on account of the growing prevalence of data & identity thefts worldwide, especially across the BFSI sector. Now, before we know the various perks of Blockchain technology, let's understand what this technology is.
Blockchain is a technology that helps end-users in conducting a verification & traceability of transactions and delivering a secure medium of cryptocurrency payments while reducing the compliance costs and speeding up the process. This technology refers to a shared and immutable ledger known for recording transactions & tracking assets in a business network. It is said that in the virtual world, anything of value can be tracked & traded on a blockchain network with minimal risks and high security.
The Three Elements of Blockchain
As businesses run on information, it becomes prominent to have an efficient mechanism that looks after the security, speed, and accuracy of the trade. This technology offers instant, shared, and transparent storage of information and can be accessed only by authorized members of the network.
Such networks are ideal for gathering asset information like track orders, accounts, payments, and production, among others, with all details of a transaction end to end to all the authorized members. There are three prominent elements of blockchain that are principally behind the swift adoption of this technology across the world. Let us take a look at these elements and learn more.
All the participants in a blockchain network have access to the distributed ledger & its immutable record of transactions. Here, in the shared ledger, transactions are recorded only once and eliminate the possibility of duplication of effort.
Blockchain technology does not allow any member to make any changes or modifications in the transaction after it’s been recorded in the shared ledger. In case there is an error in the recorded data, a new transaction is needed to reverse the error. From here, both the transactions would be visible.
Since this technology is known for security and high speed, there are a bunch of rules that the users must abide by. These rules & regulations are known as smart contracts that are stored in the blockchain and executed automatically. This smart contract can also present conditions for corporate bond transfers like the terms & conditions of travel insurance.
With all these aspects, the prospect of Blockchain technology is estimated to be highly lucrative. After all, the adoption of this technology is swiftly gaining momentum owing to the presence of several perks. Let us take a look at these aspects to learn more about blockchain technology.
Key Benefits associated with the Blockchain Technology
It would be a total waste of all the hard work and effort in case a fraudster duplicates the record-keeping and their party validation. It not only causes serious damage to the finances of the user but also corrupts the whole transaction. Hence, blockchain technology plays a prominent role in eliminating such possibilities. We understand that record-keeping systems can be vulnerable to cyber threats & attacks. And, with the integration of the Internet of Things (IoT), online transactions have flooded, thereby augmenting the need for Blockchain technology to monitor & secure the transactions. Listed below are some key benefits that can be attained using the technology and benefit the user.
Since blockchain only allows the authorized member to access critical data, the users can rest assured that data tampering & alterations are not possible and are not something they should worry about. The confidential data is shared only among the authorized member, whom the user has given the key access.
Blockchain technology does not allow modifications once the transactions are recorded in the system. Therefore, the consensus on data accuracy must be validated by all the members. No one, not even the system, can administer or delete the transaction once it is recorded. Therefore, this presents blockchain technology as a robust security system.
This technology eliminates wastage of time by speeding u[p the process by using smart contracts to store & execute functions automatically. This brings higher efficiency for the user in managing transactions using blockchain technology.
Blockchain technology and the BFSI Sector
While these were a few of the many benefits of Blockchain technology, its adoption is seen extensively across the BFSI (Banking, Financial Services, & Insurance) sector, i.e., projected to contribute substantially to the overall expansion of the Blockchain Market in the future. Looking for reasons, let us continue reading to find out.
Undoubtedly, the boundaries of technology are pushed further and have brought greater efficiency & convenience for the users across different end-user verticals. Due to these factors & the urge to bring more technological innovations, the leading companies in the Global Blockchain Market are refining their business models and seeking advancements to expand their application in the years ahead.