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How decentralization in Blockchain technology is Disrupting the Finance Industry

Blockchain technology has the potential to improve basic services in the Finance industry. It is based on a decentralized, digitalized, and distributed ledger model at its core. This is stable and safer than the proprietary, centralized models currently used in the trade ecosystem.

What is the concept of decentralization in Blockchain?

The transition of control and decision-making from a centralized entity (individual, organization, or group thereof) to a distributed network is referred to as decentralization in Blockchain. Decentralized networks aim to minimize the amount of trust that participants must put in one another and limit their ability to assert power or influence over one another in ways that are detrimental to the network.

Blockchain technology provides a way for untrusted parties to come to agree on the status of a database, without using a middleman. By providing a ledger that nobody administers, Blockchain could provide specific financial services without the need for a bank.

Blockchain: The role of DLT in financial services

Blockchain’s cousin, “distributed ledger technology (DLT),” could help corporations develop better governance and standards around data exchange and collaboration for use cases that don’t require a high degree of decentralization.

The distributed ledger, created by Blockchain technology, is a viable, decentralized record of transactions that can replace a single master database. It holds an everlasting record of all transactions, which can be traced back to its source. This is also known as provenance, which is critical in trade finance as it allows financial institutions to review all transaction steps and reduce fraud.

Benefits of decentralization in Blockchain:

1. It creates a trustless environment: No one needs to know or trust someone else in a decentralized Blockchain network. In the form of a distributed ledger, each member of the network has a copy of the same data.

2. Payments: Blockchain technology could allow faster payments at lower rates than banks by creating a decentralized ledger for payments (e.g., Bitcoin).

3. Clearance and Settlement Systems: Distributed ledgers reduce operating costs while bringing us closer to real-time financial transactions.

4. Loans and Credit: By eliminating the need for gatekeepers in the loan and credit industry, Blockchain technology will make borrowing money safer and more affordable.

5. Blockchain-equipped applications allow people to control their own digital identities and data. Today, social media outlets, businesses, and other organizations sell this information for a profit, with no benefit to the user. A decentralized approach would help make it equitable for all.

6. Applications that offer urgent international or emergency assistance to those in need without the involvement of a bank, government, or third-party agency are notable examples.

Over the last decade, Blockchain technology has gotten a lot of recognition, moving beyond the praise of fringe Bitcoin enthusiasts and into the mainstream discourse of banking experts and investors. Anything from payment transfers and how capital is earned in the private sector is being transformed by Blockchain. Will the conventional Finance industry accept or be replaced by this technology?

A decentralized, Blockchain-based innovation makes managing international trade payments more reliable, cost-effective, and less risky. This approach improves transparency by allowing all stakeholders to see the data and reports in real-time. At TraQIQ, we are well-versed in emerging technologies such as AI, Analytics, Machine Learning, and Blockchain. We can assist you in advancing to the next stage of your digital transformation ladder based on needs and specifications for different domains. Please contact us at https://www.traqiq.com/#contact for more information about our services.

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How Blockchain Technology is Revolutionizing the Fintech Industry

Blockchain-based Fintech may be the next step in the financial industry’s evolution, which is likely to remove the middleman, increase transparency, and increase the protection of each transaction. Many industries are looking for ways to incorporate Blockchain into their infrastructures. But what makes this emerging technology the obvious choice for businesses to succeed in the digital age?

Let us take a closer look at Blockchain technology and see how it can benefit businesses in the Fintech industry:

Improved Transparency:

The fact that the transaction ledger for public addresses on Blockchain is open to viewing is its most distinguishing feature. This introduces an unparalleled layer of transparency to financial structures and companies, keeping each segment of the company accountable to behave with honesty in the company’s development, culture, and customers.

Improved Security:

Since each new transaction is encrypted and connected to the previous transaction, Blockchain is much safer than other record-keeping systems. As the name implies, Blockchain is created by a network of computers coming together to validate a ‘block,’ which is then added to a ledger, forming a ‘chain’. Blockchain is made up of a complex string of mathematical numbers that cannot be changed once created. The irreversible and incorruptible existence of Blockchain protects it from tampering and hacking.

Trust through collaboration:

What if there was a way to bind business partners directly, virtually without effort, and with near-complete trust?

Blockchain technology has created a modern business relationship platform that incorporates ease of use, low cost, and high security. It establishes a new foundation of confidence for business transactions, which could lead to significant economic simplification and acceleration.

E.g.: How many people like paying commission to intermediary parties? None. With a Blockchain-enabled infrastructure financial transactions can be real-time, secure, and at much-much lower fees.

How is the Financial Ecosystem being transformed by Blockchain?

From cost savings to reducing bureaucracy in conventional banking, Blockchain in Fintech will provide more streamlined and reliable banking services that support both the bank and the clients.

To allow Fintech businesses to exchange and move safe and unaltered data via a decentralized network, Blockchain aids in the management of data breaking and other fraudulent operations. It will assist in making data more secure with algorithms, even when encrypted, as well as better tracking, comprehending, and auditing AI decisions, ensuring the degree of accountability needed for people to trust machine-driven intelligence.

Furthermore, Blockchain technology has the potential to eradicate questionable capital exchange practices like stock tampering, processing time and fees, and all intermediary commissions.

Based on the principles of equity and decentralization, Blockchain in the Fintech industry will provide us with a much more seamless and reliable alternative to banking.

We are just scratching the surface of Blockchain’s future applications, but it is obvious that this technology elevates business partnerships to a whole new stage. Here are a few instances that are currently in use or will be soon.

Music and literature, for example, frequently take a long time to get from the artist to the customer. Countless middlemen, from the label to the salesperson, all want a piece of the action. There are also permits and concessions to consider, as well as the complicated copyright management of online platforms. Direct communication between artist and user is possible with Blockchain.

Supply chains can go through a plethora of stages from raw materials to finished products in many different parts of the world, making them difficult to track. By checking each move with a block entry, Blockchain helps to make the process transparent.

How can TraQiQ help?

At TraQiQ, we are well-versed with emerging technologies like AI, Analytics, Machine Learning, and Blockchain. Based on client needs and requirements for various domains, we can assist you in selecting the best option for your company and advancing it to the next level of its digital transformation ladder.

For more information regarding our services please contact us

Monthly Archives: May 2021