Block chain technology and digital advancements have empowered businesses to streamline a plethora of interactions amongst consumers and value chain partners. Several information-heavy processes still need multiple entities to exchange private documents. These methods remain insecure, error-prone, and fraud-ridden.
For instance, consider the information required to allow a piece of real-estate to exchange hands from one owner to another. From the buyer’s a mortgage and insurance documents to the property’s inspection report and title review. These particulars contain personal data about high-value assets. However, some of it redundant, and some of it unnecessary by certain parts of the value chain. The documents are then reviewed manually, passed around via emails, or placed on a third-party portal. Which is generally outside the control of the buyer and the seller.
Sweden’s Lantmäteriet, the government agency accountable for regulating real estate, believes there is a better way. The agency is building a blockchain technology solution to connect the various partakers of the real estate value chain. Buyers, sellers, mortgage lenders, brokers, law firms, property developers and private buyers will have their interactions with the agency streamlined.
The business objective is to reduce the time delays and security issues that breed fraud and high processing costs. The Lantmäteriet estimates a potential annual savings of $106 million.
Immature Solutions are Temporary
Real-estate is just one industry among several others. Consecutively, looking up to blockchain as a solution to the issues and opportunities of conducting business in digital environments. The technology guarantees to facilitate any individual or commercial entity in the world to carry out safe transactions. All these without needing a bank, the insurance company, logistic provider, or any other intermediary between them.
Additionally, it will also cater to better tools to manage expensive and opaque processes. It will empower trade in a broader range of assets. Meanwhile, until now, couldn’t be adequately represented, priced, or traded with existing means. The technology can generate as much as $3 trillion in new business value by 2030.
The existing practice of building and using blockchain is immature, however. Several solutions called “blockchain” on the market today only integrate some of the elements of the technology. As a result, only realize some of its value. The dominance of these immature solutions is temporary.
So, What is Block Chain?
Blockchain enables parties that may or may not know each other to exchange value in a digital environment. All this, without any third-party interference for validating and safe-guarding the transaction.
The probable impact on business volume is enormous. Imagine all the business deals your firm won’t or can’t do presently. Because, you don’t know who is on the other end of the transaction and can’t be sure if they own the assets they wish to trade. For millions of potential trading partners, asset types, and transactions, that ambiguity will cease to matter.
The blockchain will classify partakers and assure all the elements of a transaction are valid. It will enforce its rules and make sure everyone holds to them. Blockchain will revolutionize the world economy from slow, expensive, analog-based methods to establish identity and legal status in financial transactions.
Block chain technology forms a trusted digital environment. It does it by blending current technologies and techniques to form a distributed digital ledger. Subsequently, it captures and records the data required by stakeholders in a network to interact and transact. The blockchain authorizes who the partakers are and validates that they own the assets they would want to trade. It then records the transactional information to the ledger. However, a copy of which is independently updated and held by every participant in the value chain. Records are unchangeable, time-stamped, encrypted, and linked to each other in blocks.
Making Digital Processes Both Safe and Transparent
Contemplate how valuable this could be for a task as universal and mundane as filing taxes. Several taxpayers had their refunds stolen and fraudulent returns filed in their name in the United States. This sort of breach is possible because the internal revenue service depends on Social Security number. Social Security numbers must be shared with employers, payroll processors, banks, and other intermediaries. This critical key piece of identifying data lives in the databases of dozens of organizations unknown to the owner.
A system that functions on the blockchain would leverage more sophisticated and secure methods for identity. For instance, tokenized credentials or a self-sovereign identity technology. Blockchain can authorize the identity in a way that doesn’t need the partaker to show their ID to the network. Nor does it demand the recipient to store their own copy. All they need is for the blockchain to authorize that the ID exists.
This same technique can make a wide array of activities less susceptible to fraud. Including insurance claims, credit access, and voting. Financial bodies are already using a version of this self-sovereign identity capability. They use it to streamline trade finance documentation, ‘KYC’ accreditation, and other costly, redundant, and fraud-riddled processes.
With blockchain technology evolving so rapidly, it can be ardent to keep pace with transformations. But those businesses that pursue innovation while aggressively enabling blockchain use cases are likely to reap the most significant rewards.
Block chain technology, the best known as sophisticated technology. It allows transactions of various digital assets without interference from any third-party intermediary.
Watch out this space to know why block chain must be considered for digital transformation and how it works.
Block chain Technology, The Promise of Block chain is written by santosh sarang for emxcelsolutions.com