5 Benefits of Blockchain Technology in Financial Services

Blockchain technology has now become the most discussed topic around the world. But, what are the benefits of Blockchain technology ? Then, how to implement it in the business world? The following will explain further about it.

In this case, 5 things related to Blockchain-based technology will be explained, such as smart contracts, identification management, and share sales. Through the following explanation, it is hoped to better understand the usefulness of Blockchain-based technology.

What is Blockchain Technology?

As many people know about finance and understand the concept of bitcoin and other cryptocurrencies. Blockchain is a technology in the form of a ledger or digital book to record all transaction history that occurs in a network.

The transaction record is encrypted in a cryptography and consists of an alphanumeric sequence, then added automatically or automatically to the history of the transaction. So, what is the use of Blockchain-based technology?

Benefits of Blockchain Technology

The following are 5 uses or benefits of Blockchain technology in financial services, including:

1. Smart Contract

Benefits of Smart Contracts can carry out commercial transactions and perform agreements automatically, and can enforce the obligations of all parties to a contract without intermediaries. Therefore, smart contracts are one of the most promising things in Blockchain-based technology.

2. Improve Online Identity Management

Using Blockchain in identity management is quite easy. So, users can identify themselves and who will be notified. Although currently users still have to identify themselves on the Blockchain, but after that they may also be able to use that identification for other services.

3. Ease of Stock Trading

This technology will have an impact on future stock trading. By utilizing Blockchain-based technology, it allows trade accuracy to reach a wider area and the settlement process is relatively faster.

4. Simplify and Speed Up Cross-Border Payments

The transfer value is quite high and the process is relatively long, thus making the use of Blockchain an alternative payment method that is considered easier and faster. In addition, it can reduce costs significantly.

5. Advantages and Loyalty of Blockchain Technology

Blockchain has many advantages to offer, one of which is transparency and transaction tracking. This will help banks and insurance companies to create more loyalty and reward programs that match the performance of 24/7 management.

How Blockchain Works

Basically, Blockchain is a technology for recording transactions that are interconnected using a unique code in it that is immutable or immutable. The way Blockchain works is when new transactions or edits to existing transactions enter the Blockchain.

Generally, most nodes in a Blockchain implementation must run an algorithm to evaluate and verify the history of the proposed individual Blockchain blocks. If the majority of those nodes reach consensus on valid signatures, then a new block of transactions is accepted into the ledger and a new block is added to the transaction chain.

However, if the majority disapprove of the addition or modification of a ledger entry, then it is rejected and will not be added to the transaction chain. So, Blockchain starts when a block receives new information, with the Blockchain system consisting of transactions and blocks containing a series of cryptographic hashes and hashes of previous blocks to form a network.