The innovative blockchain technology has solidified its future within the financial sphere, however the effective system can also be adopted by industries, extending past the financial, into other areas of business.
Capability of blockchain
Angus Champion de Crespigny, of EY Financial Services, says that, "The technical innovation will be extremely powerful and will change how business models operate." Stricken with monetary fraud, the financial services have found the cryptocurrency a cost-effective solution to the prevention of security breaches and money laundering.
The financial blockchain innovation has allowed companies to improve their transactional infrastructure whilst lowering technological costs. It has also been forecast that, due to low running costs, the use of blockchain will help undercut charges from competitor financial services. Ernst and Young believe that, "Blockchain technology has the potential to streamline and accelerate business processes, increase cybersecurity and reduce or eliminate the roles of trusted intermediaries (or centralized authorities) in industry after industry."
Why is it effective?
Heavy coding, encryption and computer distribution makes the security of blockchain highly effective. Stored data cannot be tampered with and the expense of attempting to attack the system is too high for potential hackers. Computer Weekly says that, “Blockchain doesn’t just store encrypted data - It does so via a sequential chain in which each block contains a cryptographic hash of the block before it in the chain. This links the blocks, creating a decentralized transaction ledger.”
Opportunities outside the finance sector
An example of blockchain use outside of the financial sector is the system used by diamond ledger ‘Everledger’. The technology creates a digital passport for each diamond, recording information about provenance and ownership. In an attempt to prevent criminal activity and paper document tampering, the system allows contracts to be signed electronically, presenting an evidentiary trail of ownership and client relationships. Evidence of this can be tracked, stored and used to prevent illegal activity. “By using an immutable block chain to hold this data, the ledger could provide transparency around all diamonds, revealing their origin, trail of ownership, and the processes they might have undergone.”
Computer Weekly highlights the future of blockchain within the IT industry:
“The CIO anticipates business needs and provisions a rich supply of services, from standards for blockchain application development and architecture-compliant applications, to elite talent with expertise in blockchain architecture and development.”
The new IT model is evolving, and with the combination of technology, the company’s services are enhanced.
Blockchain alone is not enough
However, the technology may not be as effective when used independently. A multi-dimensional platform could help improve efficiency and optimize the existing infrastructure. According to the UK Government; “On its own, blockchain technology is currently too slow to cope with these constantly shifting packages of data.”
Therefore, businesses such as Codel, a digital notary company based in Monmouth handling corporate actions data, combines a blockchain system with its digital notary software to create an audit trail. This collaborative combination prevents varication delays that could occur when just solely using blockchain.
It is evident that there is a future for blockchain within finance, with expansion possibilities into other disciplines and industries. Safe information and monetary transactions makes the technology appealing, alongside cutting company costs and complexities. Don Tapscott and son Alex Tapscott, authors of Blockchain Revolution, say that, “Blockchain represents the second generation of the internet, with the potential to transform money, business, government and society.” With more companies adopting blockchain technology, competitors will have to follow suit to keep up with innovation through technological advances.