6 Ways Blockchain Technology Is Changing International Trade & Payments
Discover 6 ways in which Blockchain is changing international trade
Blockchain is disrupting the corruption that is centralization. While not all centralizing is a bad thing, many areas of the way in which people conduct business and track/communicate/trush one another can be greatly benefited by the blessing of blockchain technology.
Here is a run down of the top 6 ways in which #blockchain can help influence and impact international trade for the better.
1. Prompt Cross-Border Trade
It normally takes a few days for cross-border business payments to be finalized since there are multiple banking institutions involved.It's a slow, frustrating and expensive venture. Blockchain enables institutions to save the time of payment to near instant. Cost effective, secure and fast payment will enhance international business and make it cheaper for migrants to send money home.
It facilitates fast international payment processing services by using encrypted ledgers with real-time verification of transactions. With a turnaround time of less than a minute blockchain is revolutionizing payment systems by making it instant compared to conventional 3-5 days waiting.
2. Block Is Eating Paper
Like literally, blockchain is eliminating the need for paper contracts and replacing with digital agreements. Paper contracts require more associates to support them. Lawyers, clerical staff, signatories all jointly ensure the deal is correctly reflected in the contract. All these will be streamlined and automated by blockchain contracts are encoded in a scalable distributed database which is secured by encrypted codes.
Blockchain enables digital recognition to be completed in a decentralized corruption free registry.The blockchain is replacing document records and reassign property ownership rights and eliminating the necessity for corruption free land registries.
3. End Of Intermediaries.
The blockchain is shaking up the use of ledgers which are the domain of middlemen. Expensive systems of record keeping and brokers who undertake this process will no longer be necessary. The services of middlemen and clearinghouse will be drastically altered with peer to peer business model of blockchain technology. The trust invested in brokers is being overtaken by cryptography, affiliation, and partnership.
Expenses incurred in paying the middlemen and custodians of records will be eliminated translating to overall low transaction costs for the parties. Third party contracts of blockchain are programmed to self -execute when enforced digital requirements on their source are met.
4. Preventing Cybercrime.
Blockchain core features of transparency and conclusiveness make it the ideal technology to displace current online protection models. With the ever-growing sophistication of hackers, the architecture of blockchain makes it less susceptible to hacking. Distributed ledger protects data from unauthorized intrusion or alteration because it is encrypted.
Blockchain’s secure protocol ensure sensitive data in a different location are guarded even if there is a system collapse.The node system technology stores data in hash function keeping it safer and tamper-free. Decentralized ledger secures identities of user profiles and can detect and attempt of intrusion. A decentralized database has no point of weakness where hackers can gain access. Not so far anyway.
5. Money Laundering.
The anti-money laundering laws currently in place to verify international trade are too weak to prevent financial fraud. The anti-money laundering laws currently in place to verify international trade are too weak to prevent financial fraud. They were designed to address centralized institutions with all the paperwork and know your customer requirements. This impedes trade by reducing overall trade due to risk and costs involved issuing credit letters.
Blockchain will digitize contracts and all paperwork and accurately detects risks. It can guarantee secure identification to the purchased goods and facilitate real-time reception of data on payments. This will increase the security of information and completion of obligations of the institutions concerned.
The technology makes global markets more accessible narrowing the trade finance gaps and allowing new opportunities for investments. When well embraced by all the key players, blockchain will greatly reduce the know your customer requirements or at least reinforce them.
Law enforcers can trace flat conversions done on centralized exchanges by tracking digital bitcoin address and forcing the exchange to reveal customer information. Immutability (incapable of being changed) is a huge component in preventing money laundering and it can be provided by blockchain.
6. End Of Era ……… In Passwords.
World’s biggest data bridges and corporation’s losses have happened due to weak links of passwords. Human limitation in creating stronger passwords has resulted in huge monetary losses in claims of payments. Use of third parties in storing passwords increases chances of hacking and virtual offenses. Centralized servers essentially mean that if hacked all information can be accessed at once.}
Blockchain solves the predicament of crafting passwords and may eventually become obsolete.It eliminates the need for organizations to maintain central servers for identifying information. Users can access data by use of public key like the same used in validating business in cryptocurrencies. Transactions are stored as blocks and this prevents an attack on any individual servers from compromising all the data.
Blockchain will guarantee secure passwords and consider implications of human error in creating passwords. It will be a task asking consumers to abandon the all familiar usernames and passwords but if the user experience is convincing enough it will be worth the effort. Overheads and time lost when verifying identities will be reduced drastically for both users and businesses.
At the moment there is a multitude of possibilities for blockchain where one can interact with black chain. Smart trade contracts, cloud data storage, banking and payments and horde more unexplored avenues. The public sector always boggled by bureaucracy and slow procedure will heavily benefit.
For global assimilation and acceptance to take effect, there must be universal worldwide standards like those that fortify the internet. This will ensure all interested parties and individual are on board and provide a level playing grounds like the use of mobile phone has done. The blockchain is an introductory technology.
It has the panorama of creating new fundamentals of financial societal systems. It will not save the world or solve all the crime issues facing the financial sector. .But has set the stage for more investigations on how it comes in handy in cracking the fraud code. Banks should not be afraid to embrace blockchain that should take advantage not as intermediaries but as issuers and security authentication of new forms of financial assets……Because that will be the new business order sooner rather than later.