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Hi!

Blockchain is typically associated with cryptocurrency, but there are plenty of useful applications being worked on now that may help your business get a head start on the competition.

In our last lesson, we looked at data asset management.

Today, let’s discuss handling money.

Blockchain technology and distributed ledger technology have a massive opportunity to disrupt the current banking industry by taking out the middleman on some of the key services traditional banks provide, including the following:

• Payments: by establishing a decentralized ledger for payments, blockchain technology could facilitate faster payments at lower fees than current banks charge.

• Clearance and settlement systems: distributed ledgers can reduce operational costs and bring us closer to real-time transactions between financial institutions.

• Fundraising: Initial Coin Offerings (ICOs) are experimenting with a new model of financing that unbundles access to capital from traditional capital-raising firms and services.

• Securities: by tokenizing traditional securities like stocks, bonds, and alternative assets—and placing them on public blockchains—blockchain technology could create more efficient, interoperable capital markets.

• Loans and credit: by removing the need for intermediaries in the loan and credit industry, blockchain technology can make it more secure to borrow money—and provide lower interest rates.

• Trade finance: by replacing the cumbersome, paper-filled bills in the trade finance industry, blockchain technology can create more transparency, security, and trust among trade parties worldwide.

• Customer KYC and fraud prevention: by storing customer information on decentralized blocks, blockchain technology can make it safer and easier to share information between financial institutions.

Blockchain technology provides a way for untrusted parties to come to an agreement on the state of a database without using a middleman.

By providing a ledger that nobody has to administer, a blockchain could provide specific financial services like payments or securitization without the need for a traditional bank.

Further, blockchain allows for the use of tools like smart contracts, which are self-executing contracts based on the blockchain.

They could potentially automate manual processes from claims processing and compliance to distributing the contents of a will.

In the next lesson, we’ll look at some tips & tricks of working with cryptocurrency.