Top 5 Use Cases Of Finance On Blockchain
The origins of blockchain technology can be looked to David Chaum, who first proposed the idea in the early 1980s. You might be most familiar with blockchain today as the home of cryptocurrencies like Bitcoin. To increase transparency, blockchain technology keeps track of all Bitcoin transactions. However, blockchain technology is not just for cryptocurrencies. Because it provides a safe means of completing transactions, finance on blockchain has many applications in the financial sector today. Let’s look at a few of these applications.
Top 5 Use Cases Of Finance On Blockchain
1: International Business
The capacity to conduct financial transactions internationally has grown crucial across many businesses as the world grows increasingly economically connected. Due to bank and credit card regulations, these issues may be challenging and time-consuming. Due to their sensitivity, they also risk fraud and cybercrime. Blockchain technology may help to alleviate some money-related matters.
2: Insurance Claims
One of the most significant sectors in America is insurance, which has significantly benefited from blockchain technology. Almost everyone you know is covered by insurance, whether for health, auto, life, or another type of property. With so many types of insurance available, blockchain has applications throughout the sector due to its capacity to increase process security and efficiency.
Blockchain, for instance, tremendously benefits insurance businesses by lowering administrative expenses. Organizing administration with blockchain technology can improve operations and reduce costs because the administration can be time-consuming and expensive. Reduced fraud is among the most significant advantages of blockchain for insurance businesses. Customers can submit a single claim for an occurrence using smart contracts, saving insurance firms the headache of dealing with bogus claims.
3: Bequest Funds
People are beginning to adopt blockchain technology for their estates, even though it is a new idea. The concept of inheritance money can be complex, and many people who inherit money don’t enjoy the best outcomes without consideration and planning. While creating plans for physical assets like cars and houses is a routine procedure, doing so for cryptocurrencies presents unique difficulties. There are currently no rules governing the transfer of cryptocurrency. The cryptocurrency you hold does not immediately pass to your spouse or children when you pass away. Unless someone has access to your public or private key, it will remain on the blockchain indefinitely. Financial services designed explicitly for crypto inheritance are one approach businesses have proposed.
Customers can lock their bitcoin keys with other private keys and select certain people with the passwords that companies can provide. The inheritors of crypto can launch a safe process to obtain the crypto when the crypto owner passes away. One can present a key to their spouse as an illustration. After a certain amount of time has passed after death, the spouse can use the key to obtain the inheritance. The transfer can be halted if the person hasn’t passed away. These blockchain security features contribute to a reduction in estate-related financial fraud.
The market for real estate will be worth $370 billion in 2022, making it a significant and complicated sector of the economy. Rent, mortgage payments, and title transfers to new owners are all everyday real estate transactions. By introducing an additional layer of protection, blockchain can aid in handling a massive volume of financial transactions. This technology can improve processes by lowering the quantity of paperwork and expediting transfers and other functions.
5: Royalties for Musicians
Musicians use streaming sites like Bandcamp, Apple Music, and Spotify to make their music available. The musicians receive royalties when their music is made available on these platforms. Blockchain can help stop music piracy when artists release their songs solely on one service. Blockchain technology can guarantee that a musician’s music file only exists on their related service, which makes piracy more challenging. By utilizing smart contracts, blockchain technology can help streaming services. Using this technique, they can increase the transparency and security of payments made to artists on their platform.
Blockchain Becomes Commonplace
Although you may have only heard of blockchain as a mechanism to store cryptocurrencies, new applications for this technology are being developed in fields like finance. Companies are beginning to embrace blockchain for international transactions, insurance claims, and real estate because it makes transactions transparent and secure. Even though blockchain is a relatively new idea, as bitcoin investment grows in popularity, people are starting to use it for inheritance.