Cryptocurrencies and the Blockchain technology have become a trending topic when you want to talk about technological advancements. Now, many companies are finding ways to incorporate the Blockchain into many processes, not to only eliminate the need for third parties, but to also reduce risks and the cost of operations.
Just in case you didn’t know, blockchain acts as a mutually distributed ledger that records ownership and transactions via a permanent, persistent, and pervasive data structure that is reproduced across various computers. The technology operates on two basic components; a shared or peer-to-peer data storage and a public-key cryptographic system. The main aim is to create a data source that is technically distributed across different computers and at the same time logically central.
The Impact of the Blockchain Technology
In most companies or firms today that are into the financial market, an outrageous amount of time and resources are channeled into acquiring data, verifying these data records, and trying to reconcile these records internally and also externally. According to reports, these processes could cost over $24 billion in a single year, and this only constitutes a minute part of the total costs incurred by the firm.
Another area most firms are having a hard time with is in terms of AML (anti-money laundering) compliance and KYC (Know-Your-Client) which could cost over $12 billion annually. Now, that’s way too much, if you ask.
Blockchain has made everything better! By implementing the Blockchain technology, companies can remove over 50% of the cost of making securities transactions. And, it could also help in reducing liquidity, operational, and counterparty risks. This perception has made companies embrace the idea of the distributed ledger for securities transactions.
Blockchain Potential in the Exchange of Securities
When it comes to the exchange of securities, parties involved would need to create a centralized ledger which would help them keep track of ownership and transactions. This ledger could be in the form of securities depositories, registries, travel reservations, and even libraries. But, this ledger still needs to be overseen by a trusted third party that will safeguard, preserve, and confirm these transactions. The question is, how loyal are these third parties? This is where Blockchain comes is.
The implementation of blockchain in securities transactions will help in two major ways: the safeguarding of transactions against being duplicated or altered, and secondly, it adequately preserves the record of these transactions. This not only reduces the switching costs tremendously but also brings a reduction in the possibility of the market power being exploited.
The Impact of Blockchain in the Health Industry
Data today is one of the most important aspects of our day to day activities. Proper record keeping is the key to success in any establishments. With the increase in population and the constant movement of people and goods from one place to another, it is very easy to lose track of important documentation due to reasons beyond our control. The blockchain, as a cryptographically secured distributed data storage network, can be leveraged to carry out all the data management protocols of the healthcare industry that way, data are made available always and from anywhere in the world. Three most important aspect of the healthcare industry that will be transformed and made very convenient if the blockchain is introduced are:
1. Healthcare records
2. Supply chain records
3. Revenue cycle management records
Healthcare records can be very difficult to trace. With patients having multiple members using the same health insurance number or visiting different hospitals for healthcare it can be a disaster at times to track past records. With the blockchain acting as a global database and a global computer, it will create a universal patient-centric care that will identify each patient and coordinates and aggregate data through multiple IT system towards a single global ID.
The supply chain in healthcare is a very large expense for hospitals, these important healthcare items are being moved throughout the healthcare system. The blockchain can be employed to track the movements of valuable items and intelligent automaton can be built around the system. This way all items can have a safety track record at all point in real time.
Revenue cycle is the monetary aspects of the healthcare that rotates between the providers, payers and the bank. Blockchain can act as a tool to coordinate payments thereby allowing for the complete elimination of the need for reconciliation of documents. This will save time and make the cycle more efficient.
In conclusion, the blockchain technology as no boundaries and can be leveraged to do a lot of important things and make life easier and more convent.
There are many processes across different industries where the Blockchain technology can have a huge impact on, and the transaction of securities just happens to be one of them. Efficiency in these processes will be increased substantially, costs and risks will be reduced tremendously, and companies can now redirect those wasted time and resources into the core areas of their businesses. And, as the Blockchain technology continues to develop, there will also be positive changes across many industrial processes.