Blockchain technology has changed the way data is processed and gradually altering the way financial transactions are conducted. Have you ever sent funds to someone in another country and it took days for the recipient to get the money? The money may have passed through different financial institutions before getting to the receiver.
All of these and more are some problems associated with traditional financial institutions. However, with the evolution of blockchain technology and cryptocurrencies, this is gradually changing. Transactions can be swift, secure, and more reliable with this technology.
Businesses in several sectors are now embracing this technology for better results.
Which Companies Use Blockchain Technology?
As blockchain technology is continually being explored, its applications have become far-reaching. Companies in sectors such as finance, engineering and construction, health, entertainment, and the government now use this technology to enhance business processes. Governments, on the other hand, can use blockchain technology in voting and electioneering processes.
Below is a compilation of ten companies from different sectors that use blockchain technology.
Intesa Sanpaolo
Banca Intesa Sanpaolo is an Italian banking conglomerate that uses blockchain technology to validate trading data. The firm also makes use of the OpenTimestamps protocol that uses Bitcoin to power the system.
Visa
Visa is another financial company that started talking about blockchain technology for a long time. The company plans to deploy this technology to facilitate business-to-business payment services, especially for e-commerce platforms and online businesses.
Unilever
Unilever is a top company in the supply chant sector that uses blockchain technology. Though Unilever currently uses tech to manage its tea sector, they plan to use blockchain to track all transactions of the company to ensure all-round quality.
Walmart
Though Walmart is currently using IBM’s supply chain technology platform to back up its supply chain processes, the company has always portrayed blockchain technology in a positive light. The company plans to use blockchain technology to track foods from their farmers and allow customers to investigate before buying items.
Ford
Ford is a top automobile company that uses IBM’s hyperledger technology to track its raw materials like cobalt from the suppliers to ensure authenticity. This means that as soon as cobalt is mined, data gets on the ledger and the company begins its tracking process from there.
Change Healthcare
Change Healthcare is one of the large companies in the medical sector that uses blockchain technology. The company currently works on an Intelligent Healthcare Network™ that uses Hyperledger Fabric to power it. With this technology, patients’ claims and data can be effectively stored, protected, and audited. Another advantage is the promotion of trust and confidentiality.
DHL
Dalsey Hillblom Lynn (DHL) is one of the large companies in the transport and logistics sector that uses blockchain technology to enhance its pharmaceutical supply chain. The company is currently working on a proof of concept to track pharmaceuticals from the originating point to the final consumer. This is in a bid to get rid of fake medications.
Pfizer
Pfizer is a top biomedical firm that uses blockchain technology. The firm is also currently working on a proof of concept to track records and manage the digital inventory of medical supplies.
Prudential Financial
Prudential Financial is one of the public insurance companies that use blockchain technology to ensure effective services and eliminate fraud from the sector.
Shell
Shell is one of the top players in the energy sector that uses blockchain technology for crude oil trading. The application of this technology will help to eliminate fraud, track products, and enhance transparency.
Should Customers’ Information be Stored on the Blockchain?
The huge growth and massive adoption of blockchain technology can be attributed to its numerous benefits. Blockchains have the advantage of security, immutability, transparency, speed, and trust.
However, when it comes to the issue of storing customers’ personal data on the blockchain, the situation is quite dicey. Besides the issues of confidentiality, internal compliance policies, industry regulations, and privacy are part of the reasons why it is not advisable to save sensitive customers’ information on the blockchain.
DeFi Planet understands that these issues outlined above usually arise when dealing with the blockchain. When dealing with sensitive data belonging to clients, other suitable options that could be considered are private blockchains, blockchain hashes, and data splitting.
Data splitting
In this case, a company will store only a minimum amount of a client’s data on the blockchain. However, two challengers are associated with this option. First, the business will end up managing an additional database. Second, there may be issues of compliance constraints due to storing only a portion of data.
Private blockchains
Private blockchains operate in a ‘permissoned’ manner, meaning those that have access to the database must have been granted permission by the sole administrator of the blockchain. Small to medium-sized companies can use private blockchains to store customers’ data. However, there may be limitations such as trust issues and breaches of security by those who have access to the database.
Blockchain hashes
When new data is added to the blockchain, it gets a new configuration hash. Each hash will be unique to each document. A disadvantage of this option is that as the number of hashes increases, the system gets confusing, making it difficult to identify which hash represents a customer’s data.
Is Blockchain the Next Big Thing?
Since the development of the blockchain slightly over a decade ago, this technology has continued to evolve. Originally developed to facilitate cryptocurrency transactions, the technology is now being explored in several ways, from smart contracts to decentralized finance protocols and decentralized apps.
As seen above, many sectors of the global economy now use this technology to achieve various goals — an indication that blockchain is the next big thing.
Cohn Reznick quotes Samantha Radocchia, co-founder of Chronicled, a company that leverages blockchain and IoT technologies to deliver smart supply chain solutions, as saying, “If 2017 was the year of bitcoin, then the future belongs to blockchain because it has the potential to disrupt so many old ways of doing business and create vast new opportunities beyond the financial services industry.”
A number of firms in the energy sector use blockchain technology to promote real-time data sharing. Forbes describes this innovation as blockchain-backed energy grids. This gives customers total control to source for their energy products and providers. This information will promote sustainability and drive competition.
Blockchain is also growing in the finance sector. We have seen payment giant Mastercard partnering with Circle to use its USDC stablecoin to facilitate cryptocurrency payment for goods and services.
What Does the Future Hold for Applications of Blockchain?
As stated earlier, the prospects for blockchain technology are far-reaching. There are slight indications to show that decentralized finance now has an edge over traditional finance due to its numerous benefits. These merits include transborder payment, more security, and speed.
Finance companies like Mastercard, Visa, Barclays, and HSBC now use blockchain technology to enhance seamless operations.
As this technology evolves, it would be adopted more for smart contract uses, supply chain, and identity management.
Smart contracts are computer applications that facilitate an agreement between two or more parties from the beginning to the end. In the near future, it is expected that more companies will adopt smart contract technology for the smooth running of their businesses.
In the case of identity management, blockchain will play an efficient role. Even as organizations continue to improve in the area of identity management, we still get to hear of theft and unauthorized withdrawals in financial institutions. This is an indication that as companies improve on their security, hackers also develop themselves with skills to break these barriers. This will prompt the adoption of blockchain by almost every company.
To promote efficiency and trust, more companies in the supply chain, especially food, beverage and pharmaceutical companies will adopt blockchain technology. This will allow customers to track the end products, from raw material sourcing to production and distribution.
Is There a Size-Limit to Blockchain?
The size of the blockchain is quite important as it gives rise to issues of scalability. According to 101 Blockchains, the size of the Bitcoin blockchain was 1 MB in October 2019.
In 2017, the block size cap of Bitcoin was reportedly changed following a network weight of 4 million value units, suggesting the size may now be as big as 4 MB or 2 MB.
However, it is important to remember that the blockchain is immutable, which means the Bitcoin blockchain is a distributed database of transactions that have occurred since its inception till date. Data by Statista pegged the size of the Bitcoin blockchain at 350.96 GB as of August 15, 2020.
Comparing both data from October 2019 and August 2021 shows a rapid increase in size in a space of barely 2 years. This trend is expected to continue, suggesting that the Bitcoin blockchain has no size limit.
In Conclusion…
- As blockchain technology is making financial processes seamlessly and more enjoyable, more traditional financial institutions are now adopting this technology to keep up with the trend.
- The prospects of this technology are currently being explored, an indication that more novel projects will spring forth. To give an honest answer to the question asked in the topic, yes, blockchain is part of the evolution of technology in finance.
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