Bitcoin and other cryptocurrencies are the first applications of blockchain technology, but it is proven that this technology can have a real and substantial impact on many future financial and business transactions.
Impacts include raising efficiency and reducing costs, and US reports say that blockchain technology can be applied today in financial and administrative operations related to at least 19 financial, administrative and service fields. Among them are banking operations, payments, insurance, supply and information security, Internet of Things, health services, energy management, asset management, charitable activities and elections.
IBM says that by the end of 2018, at least 15% of the world’s banks will be dependent on blockchain technology to manage data for some of their products and services, and UBS, Citi Bank, Barclays, and Goldman Sachs have already begun creating jobs for engineers responsible for blockchain projects.
Not only that, the investment in this technology is also increasing, as the volume of financing of startups in the field of Block Chain increased to one billion dollars last year, and the sales of cryptocurrency symbols jumped to five billion dollars.
The big technology companies were the first to adopt this new technology, as IBM invested two hundred million dollars in the Internet of Things supported by Blockchain.
Nevertheless, the blockchain remains a new market in which success requires a strategic evaluation of the value and feasibility of using in order to obtain returns.
What should companies do in Blockchain strategies?
Blockchain is a financial notebook or a database shared across a public or private computing network, and every piece of information is encrypted, then a new “block” can be added to the historical records series.
Blockchain technology uses different compatibility protocols to verify a new block with other participants before adding it to the chain, preventing fraud or double spending, all within a decentralized framework.
On the other hand, the financial book can also be programmed using “smart contracts”, which is a set of conditions registered on Blockchain. Accordingly, the main advantages of Blockchain are decentralization, safe coding, transparency, and stability, and benefit from it requires adopting a correct approach based on focusing on specific and promising use cases, and improving Blockchain strategy in line with the nature of the market.
Standards and regulations, technology, assets, and ecosystem are key factors that determine the feasibility of using Blockchain in a particular industry, and therefore must ensure the ability to shape the ecosystem, set standards, and address regulatory restrictions.
Insights into Block’s strategic value
And unlike a public block chain like Bitcoin that is not subject to central authority, licensed block chains are added to private computing networks, while ensuring controlled access and modification rights, and thus market dominant parties can maintain their positions as central powers or unite forces with other players to share valuable Safely share data while automatically controlling what is shared, with whom, and when. Before investing in bitcoin you must know about factors for bitcoin revolution.
Operational efficiency and cost reduction
The primary effect of adopting Blockchain technology is to increase operational efficiency, reduce cost through the absence of the role of intermediaries and the lack of an administrative effort to maintain records or settle disputes related to transactions, which may lead to shifting the value flow by recording lost revenue and creating new revenue for service providers.
About 70% of the value of Block Chain is concentrated in the short term in reducing costs, then generating revenues and low capital. In front of this, we find that the nature of the basic functions of some industries is more suitable for Block Chain solutions than others, such as financial services, health care and the government sector.
Within the government framework, key record-keeping and verification tasks through the cluster chain infrastructure help achieve significant administrative savings in handling data from birth certificates to taxes, and there are more than 25 governments that are actively working on operating a Blockchain directory supported by startups.
In the field of health care, blockchain could be the key to increasing administrative efficiency, providing data and exchanging it between service providers, patients, insurance companies and researchers.
Over time, the value of Blockchain will shift from lowering administrative costs to enabling new business models at scale and increasing revenue streams.
Shift Frequency © 2020 – Blockchain And Its
Effect on Business World