Blockchain It is a digital, immutable, transparent and distributed ledger system that records transactions in chronological order in near real time. Blockchain records are immutable, can be viewed transparently and can be accessed by all participants. Since it is immutable, no changes can be made once a transaction has been recorded, ensuring data integrity and security while reducing fraud opportunities. as such, Blockchain is a shared network through which “values” in the form of high-quality records are exchanged over the Internet between participants stationed in any part of the world without an intermediary (Christidis and Devetsikiotis, 2016)
The main advantages offered by Blockchain technology include decentralization, transparency, traceability, data security and a high degree of data encryption.
Roadblocks in Blockchain Adoption
Blockchain adoption is at a really early stage, so there are many challenges. Although there are many open questions about Blockchain, the technology and its applications are very promising. If we talk about the most important of the many challenges to successfully adopting, one of them will be the lack of regulatory and compliance specifications.
Other major challenges include lack of knowledge and awareness among stakeholders, due to the rapid development of Blockchain and challenges associated with operational and cultural integration across organizations and stakeholders. Challenges can be broadly categorized under Technology, social, political, political, economic, within organizations, and between organizations.
- technology – Technology immaturity, immutability, power consumption, lack of appropriate platforms
- social – Possible use of multiple identities, privacy concerns
- Politics and politics Lack of regulations, policies and national commitment
- economic – Large initial investment, maintenance cost
- inside the organization Lack of management commitment, technological readiness and financial constraints
- between organizations – Lack of participation of trading partners, problems and disagreements in cooperation and information exchange
While a large number of the population around the world have yet to understand and experience the concepts and benefits of digitalization, the idea of adopting Blockchain into the mainstream is challenging.
Where Do Blockchain Opportunities Lie?
Blockchain shows huge potential in the financial services industry, especially in the banking and insurance sectors. Most of the progress made to date has been achieved through collaboration and partnership between key FinTech enablers such as financial institutions, FinTech start-ups, and technology companies. In addition, many large non-financial companies are increasingly inclined to adopt Blockchain to innovate and enhance the effectiveness of their traditional business operations.
Many companies and organizations have already experimented with real-world Blockchain applications in the areas of international trade finance, international payments, bill discounting, supply chain finance, loyalty program management, and digital identity transformation and verification. Similarly, many financial institutions are playing a leading role in adopting Blockchain in their regular products, services and operations.
The main goal of most of these early adopters is to explore the potential of Blockchain as an alternative to achieve greater efficiency, effectiveness, and coverage through innovation in products, services, and processes.
Blockchain has the right things to do to change the trajectory of finance.
The opinions expressed above are those of the author.
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