Blockchain technology has turned the financial industry upside down, but its disruptive applications in finance are just the tip of the iceberg. Blockchain technology has the potential to drive major change and create new opportunities in industries such as banking, cybersecurity, intellectual property, and healthcare. Cybersecurity is one of the most promising growth areas for blockchain technology.
But Blockchain is its true reach – its ability to change the way people do things every day – like choosing, traveling, and even going to the doctor.
The blockchain landscape is growing, and new governance models are needed every hour. Current applications include a variety of sectors including finance, healthcare, contracts, and law, and new future applications are proposed for blockchain daily. The infographic of today comes from Hive Blockchain Technologies and gives us an insight into the potential of blockchain in the financial world.
New governance models will enable larger and more diverse consortiums to approach payment decision-making and approval programs and will help standardize information from different sources and to capture new and more robust data sets. Look forward to governance models that enable massive and diverse consortia with greater efficiency in decision-making and payment empowerment.
Developing regulations and standards to cover the blockchain will be no small challenge, and leading audit firms and bodies will have to contribute their expertise to this task. Accountants with a mix of business and financial expertise can position themselves as key consultants to companies that are approaching this new technology and looking for opportunities.
Many of today’s accounting departments are already optimizing blockchain and other modern technologies like data analysis and machine learning, which will increase the efficiency and value of accounting functions. Reducing the need for reconciliation and dispute resolution, combined with greater legal and regulatory certainty, will allow a greater focus on accounting when auditing transactions, allowing for the expansion of accounting areas. Parts of accounting that relate to transactional assurances made through the transfer of property rights are being transformed by an intelligent blockchain approach to contracts.
For example, using Blockchain to create a single source of truth for transactions between parties has the potential to reduce processing time and cost for insurance companies.
Blockchain also has potential applications beyond the cryptocurrency Bitcoin. Blockchain can be used to facilitate identity management and to help obtain voter information for the proper functioning of the electoral process.
It is hard to imagine an area of life that is not suitable for blockchain upgrades. It would be a mistake to plunge into blockchain innovation without understanding how it is likely to prevail. If true, this could lead to the transformation of the economy and government that we have believed in for many years.
In the short to medium term, one possible path to the future of blockchain would be to deal with the relative immaturity of the technology in such a way that it gains importance through standardization and gains more acceptance in mainstream society. Blockchain technology is being developed to support the cryptocurrency market, but it would not be a big leap if it were applied to more established financial services.
Blockchain technology could allow banks to reduce excessive bureaucracy, speed up transactions at less cost and improve security and confidentiality. Two aspects of blockchain are, however, making it more difficult to take full advantage of technology, creating a new generation of small, innovative, and risky businesses that could disrupt existing industries and transform them if technological constraints are lifted.
Skeptics of the potential of blockchain technology, often associated with cryptocurrencies, to disrupt the way money and other assets are carried around the world say that the technology is not sustainable or efficient enough for mass adoption.
More and more people are already using Algorand for a wide range of applications – from the creation of carbon credit markets to speed up real estate transactions to creating new legal tender in the case of the Marshall Islands. Mainstream companies across all industries are interested, and in some cases will invest in cryptocurrencies and blockchain by 2021.
AMC, for example, announced that it would accept bitcoin payments by the end of the year. Fintech companies such as PayPal and Square are also relying on crypto to allow users to buy on their platforms. According to Accenture, 61% of aerospace and defense companies are working on blockchain and distributed ledger solutions.
In an interview with McKinsey’s Rik Kirkland, Don Tapsc Scott, CEO of Tapscott Group explained that blockchain is a distributed open-source database that uses state-of-the-art cryptography to facilitate collaboration and tracking all types of transactions and interactions. Blockchain technology has the potential to streamline all parts of inventory authentication, certificate tracking, and much more.
Blockchains, peer-to-peer networks that sit on the Internet, were introduced in October 2008 as part of a proposal for Bitcoin, a virtual currency system that evades a central authority for issuing currencies, transferring property, or confirming transactions. Fidelity Investment Standard and Charter are testing blockchain technology as a substitute for paper-based, manual transaction processing in areas such as trading and finance, foreign exchange, cross-border settlement, and securities settlement. The purpose of blockchains is to enable participants in a peer-to-peer network of value-sharing and interaction to create digital assets for each other without having to rely on intermediaries.
The Bank of Canada is testing a digital currency called CAD Coin for interbank payments. Nordea enables small and medium-sized companies active in international trading and has developed a trading platform called We trade with other major European banks, based on an IBM blockchain platform running on the IBM cloud.
IBM Blockchain Technology is involved in more than 400 blockchain projects in government, healthcare, transport, insurance, chemicals, oil, and more. The comments follow a recommendation by Jerry Cuomo, Vice President of IBM Blockchain Technology, and co-moderator Frank Yiannas, who has been appointed Deputy Commissioner for Food Policy and Response at the Food and Drug Administration. American Banker recently published five questions to examine where the blockchain industry is heading.
The International Data Corporation (IDC) expects 35% of IoT deployments to be enabled by blockchain services by 2025. Combined with predictions that blockchain and IoT will strengthen in the future, blockchain technology provides a secure and scalable framework to facilitate communication between IoT devices. In addition, 68% of CIOs and CTOs see the need for scalable governance models to support the interaction of multiple blockchain networks.
Another layer of blockchain technology makes it easier to keep track of sensitive data when it is processed by accounting firms. Data tracking enabled by blockchain technology could help automate certain accounting services using artificial intelligence to reduce human errors and fraud. Bloom wants to bring credit scoring into the blockchain by developing a protocol to manage identity risk in credit scoring using Blockchain technology.