The distributed ledger technology used in blockchain offers multiple benefits to businesses that make a difference when implementing a solution that requires a high degree of trust for business transactions. Using the technology offers the possibility to reduce costs and offers the opportunity for businesses to build and maintain an infrastructure that delivers capabilities at lower expenses than traditional centralized models.
A Smart contract is nothing, but a piece of code stored on all computers of the blockchain network. It defines a set of conditions to which all parties using the contract mutually agreed upon. Once the required conditions are met, certain actions are executed, and all members of the network get to the same result by executing this action. This enables smart contracts to execute contractual obligations without any human intervention. The integration of Smart contracts, a big application of blockchain, with payment gateways, would automate a major process.
- Banking access in remote areas
- International payments
- B2B payments
Stock exchanges are experimenting with Blockchain technology to streamline time-consuming and inefficient processes involved in trading securities. Security trading, in a nutshell, is a financial activity of purchase or sale of security assets like stocks, bonds, commodities and currency to make money in the short term. Certain long-winded, complex processes like pre-trade, trade, post-trade and custody, and securities servicing involved are time consuming. For this reason, exchanges like the U.S. based NASDAQ, Australian Stock Exchange, the London Stock Exchange ,exchanges in Japan and Korea are experimenting with blockchain technology.
- Smart “Letter of Credit”