Blockchain technology for non-crypto finance
The idea of blockchain technology dates back to the early 1980s when David Chaum came up with the concept. Today, you may know blockchain best for housing cryptocurrencies like Bitcoin. Blockchain technology records all transactions for Bitcoin in an attempt at transparency. However, you can use blockchain technology for more than cryptocurrency. In today’s world, blockchain has many applications in finance due to its secure method of conducting transactions. Let’s take a look at some of these uses.
Blockchain Finance Use Cases
#1: International transactions
As the world becomes more connected economically, the ability to conduct financial transactions abroad has become important in many industries. Due to regulations with banks and credit card companies, these matters can be difficult and time-consuming. They are also at risk of fraud and cyber attacks due to their sensitivity. Blockchain technology can be a way to mitigate these financial problems.
#2: Insurance requirements
Insurance is one of America’s largest industries and one of the most significant benefits of blockchain technology. Almost everyone you know has insurance, whether it’s health, car, life, home or something else. With many different forms of insurance available, blockchain has applications across the industry with its ability to make processes more efficient and secure.
For example, blockchain benefits insurance companies by reducing administrative costs. Administration can be time-consuming and expensive, so organizing with blockchain technology can make processes more efficient and save money. One of the main benefits of blockchain for insurance companies is reduced fraud. Using smart contracts will help customers make only one claim for an incident and save insurance companies the hassle of fraudulent claims.
#3: Inherited money
Although it is a new concept, people are starting to use blockchain technology for their properties. Inherited money can be a complicated concept and many who inherit money do not experience the best results without care and planning. Setting up plans for tangible assets like cars and houses is standard practice, but doing so for cryptocurrency has its challenges. Right now there are no rules for transferring cryptocurrency. When you die, the crypto you own is not automatically transferred to your spouse or children. It will sit on the blockchain forever unless someone can access your public or private key. One solution companies have come up with is financial services dedicated to crypto heritage specifically.
Businesses can allow customers to lock their cryptocurrency keys among other private keys and provide those passwords to designated individuals. When the crypto owner passes, the heirs can start a secure process to access the crypto. For example, a person may give their spouse a key. When the person dies, the spouse can trigger the key and gain access to the inheritance after a certain amount of time has passed. If the person is not dead, they can stop the transfer. These blockchain security measures help reduce instances of real estate financial fraud.
#4: Property
Real estate is a large and complex industry, with the market reaching a value of $370 billion by 2022. Transactions in real estate occur all the time for rent, mortgage payments, and deeds that are transferred to new owners. Blockchain can help with a high volume of financial transactions by adding an extra layer of security. This technology can make processes more efficient by reducing the amount of paperwork and speeding up transfers and other procedures.
#5: Musician royalties
Musicians use streaming services such as Spotify, Apple Music and Bandcamp to distribute their music. When they release their music on these services, the artists receive royalties. Sometimes an artist releases their music exclusively on one service, and blockchain can come to the rescue to reduce piracy. Blockchain can ensure that an artist’s music file only exists on their partner service, making piracy more difficult. Streaming services can take advantage of blockchain technology by using smart contracts. With this method, they can make payments to artists on their platform more transparent and secure.
Blockchain is going mainstream
You may have known blockchain for years as a way to house cryptocurrency, but as time goes on, people are coming up with new ways to use this technology in more industries like finance. Blockchain makes transactions transparent and secure, so companies are starting to use it for international transactions, insurance claims and real estate. Although blockchain is a relatively new concept, people are even starting to use it for legacy as cryptocurrency investments become more popular.
