Name – Aayush Kumar
Roll no.- 24BC699
Blockchain in Finance: A Tangible Future
Introduction
Initially developed for use solely with cryptocurrencies, blockchain has become a powerful
force affecting a host of industries all around the globe. By enabling data to be dispersed and
safeguarded, blockchain has altered how transactions, records, and even processes are done.
From finance to healthcare the reach of the blockchain technology goes without saying.
What is Blockchain?
In essence, blockchain refers to a technology that provides a method of rigidly organizing
files through distributed ledgers that is, transactions done in many computers without having
a central server. A block in a blockchain is also a database containing information which
upon substantiation is permanently etched.
For instance, Bitcoin which first started operating in 2009 brought blockchain to the world.
The core idea of bitcoin design is its security and transparency. All the transactions are made
within a database, and as the database is public, it is impossible to change at least one of the
transaction records.
Blockchain in Finance
Probably the most progress or change that has been brought by the Blockchain technology is
in the Finance sector. The conventional banking system that is synonymous with
intermediary service is efficient but at times slow and expensive. This is quite so when
looking at international payments. With this network, the services of a third party are not
required thus fast, cheap and safe transactions. XRP, Ripple’s token, has been employed by
financial brands such as American Express and Santander to process real-time payments
across borders. Now, instead of having to wait a couple of days to execute international
transfers, it takes a few seconds to process them, and thus costs much less time and money.
And another example is DeFi (Decentralized Finance) where Uniswap and Aave provide
lending, borrowing and trading services and reshape existing financial services without
middlemen like banks.
Blockchain Outside Banking Sector:
The scope of blockchain technology is much broader than just banking. It is finding
application across sectors like supply chain, healthcare, real estate to enhance transparency,
efficiency, and security.
Supply Chain Management:
Food suppliers such as Walmart and IBM are implementing technologies like blockchain in
order to document the entire process surrounding a particular food product in this case, from
farming to retail. This ensures traceability in regards to food safety and sources. For instance,
if a package is detected to be harmful, within a few seconds the shelf where that product was
placed is located, thus enhancing product recalls and consumers’ confidence
The application of blockchain technology in healthcare made an advance in the protection
and administration of professional information systems. A patient-centered platform that is
called MedRec is built on the blockchain and allows patients to store their medical data and
transfer it to the healthcare institutions in a safe manner. This minimizes the chances of data
mishaps and guarantees the data remains current.
Real Estate
Blockchain has also penetrated the real estate industry by making it easier to buy and sell
property without the need to verify the parties involved with a third party. Propy is a real
estate service platform that facilitates transactions between buyers and sellers without the
intervention of lawyers or brokers by using smart contracts.
Blockchain’s Role in Governance and Voting
It is important to note that the governance procedure is intended to be free from malpractices
with the help of blockchain. When the vote is cast on the blockchain, the government will
eliminate the abuse of power in elections and make sure that proper voting practices are
followed.
In 2018, military voters stationed out of the West Virginia's borders were able to vote using
their smartphones. Those allowed to sample this closed system were able to vote remotely but
in a very transparent and verifiable manner.
Challenges in Adoption
In spite of the advantages of applying blockchain, there are certain difficulties in its’ usage.
The issues of scalability continue to present a challenge with most blockchain systems’
ability to handle a high number of transactions. Also noteworthy is the variable energy
utilization of some blockchains particularly proof of work blockchains like bitcoin. There is
instability in regulation – governments around the world are yet to come up with ways of
regulating this technology.
The giant Ethereum, the second biggest blockchain system globally, migrated from PoW to
PoS in its Ethereum 2.0 development. This helps to cut down needed energy for transaction
validation and is a solution to one of blockchain’s major issues.
Future Prospects
With ongoing advancement of the technology, the integration of blockchain is estimated to
increase in several industries. New growing markets such as NFTs, CBDCs, and Web 3.0 are
the current grounds for new breakthroughs with a close association with blockchain.
China has already rolled out a trial version to the Digital Yuan making it one of the first
major economies in Published in: International Journal of Cyberworld, Hardware & Design,
Vol. 5 Number 3 Welfare States and Digital Technologies Prose: Digital Yuan is also to
enable such breakthrough in money systems through enhanced financial inclusion through
blockchain technology.
Conclusion
Starting with finance industry, through changing the way we look at supplying goods and all
the way to making secure voting possible, Blockchain is not just a hype anymore, but an
establish force that start creating tomorrow. This and many other opportunities prove that as
problems are solved and the tech gets more developed – blockchain will only get more and
more intertwined into our lives.
