In recent years, digital currencies have been widely popular. However, as various use cases continue to emerge and be rapidly adopted, the notion that digital assets are just a form of currency is gradually being forgotten.
In May of this year, The Fintech Times showcased some new approaches and explored how the digital asset ecosystem is evolving. As we wrap up Digital Asset Month, let’s take a look back at the technology driving it all: blockchain.
In 1991, the first paper on using Crypto secure blocks on a chain was published, and in less than twenty years, this idea was validated, giving birth to BTC.
Since then, this technology has made significant progress, with numerous companies creating their own blockchains to facilitate payments, track ownership, and more. In this article, we will review the latest blockchain innovations, understand the technology’s applications beyond Crypto assets, and explore future trends.
Reducing Risks
Yuval Rooz, Co-Founder and CEO of Digital Asset, a provider of blockchain and tokenization software and services, focuses on how capital markets are beginning to take notice of blockchain’s impact.
Rooz stated: “Blockchain technology is changing the way the global financial system operates. We have seen industry-leading companies like Goldman Sachs’ DAP, JPMorgan’s Onyx, Broadridge’s DLR, and HSBC’s Orion move their projects from Proof of Concept to production, and this momentum continues to grow.”
“The scale of this change is complex, and the next challenge that institutions are striving to address is how to maximize interoperability in a broader market.”
“We made significant progress in this area last year, with the creation of the Canton Network being a prime example. The industry’s understanding of how to achieve atomic settlements within the current regulatory framework is expanding, and evidence of its potential to reduce settlement and counterparty risks will continue to drive the development of new use cases and business models.”
“Global capital market participants, including central banks, are closely watching blockchain technology. The increasing number of pilot projects and projects in production indicate that financial institutions believe blockchain technology will bring significant change to our global financial system.”
Enhancing Security and Scalability
Bryan Daugherty, Global Public Policy Director at the Bitcoin Association (BSVA), also expressed similar views.
He said: “The past year has seen substantial developments in blockchain technology, from initial financial applications to more complex systems affecting various industries.”
“Of note is the development of the enterprise-grade Teranode node software, which significantly boosts transaction processing capabilities, breaks through the limits of blockchain scalability, and enables broader socioeconomic impacts globally.”
“Innovations in decentralized identity and information security are also at the forefront. These advancements aim to transform traditional systems by enhancing user autonomy over personal data and increasing necessary security measures in an increasingly digital world.”
“These innovations are crucial as they not only provide a stronger security framework but also ensure higher user privacy and trust in digital interactions.”
Applications Beyond Traditional Financial Fields
Daugherty then shifted focus to blockchain applications beyond Crypto assets. He added: “Blockchain technology is gradually being adopted to address challenges that traditional systems struggle to cope with. This includes reducing reliance on trusted third parties, creating more efficient data management, and monetization methods.”
“For example, the CERTIHASH Sentinel Node developed in collaboration with IBM completely transforms the way enterprises manage network security. By reducing threat detection time from an average of 204 days to almost instantaneously, this application meets the urgent need for quick responses to the increasing network threats. Given that data breaches lasting over 30 days can cost companies up to $9 million, this capability is particularly valuable.”
“In the agricultural sector, companies like Smart Grow Agritech LLC are using blockchain to provide more precise production tracking and data management, enhancing farmers’ capabilities. This integration not only improves agricultural productivity but also supports sustainable practices by optimizing resource utilization and ensuring compliance with evolving agricultural regulations.”
“In addition, nChain’s digital signature application ‘nSign’ is changing document management across industries by enhancing the security and transparency of the document signing process. This application ensures document integrity, simplifies verification processes, and promotes trust and streamlines workflows in industries where document integrity is crucial.”
Combatting the Growth of App Fraud
Andrew Carrier, a member of the executive committee at blockchain financial company Quant, analyzed how blockchain technology can combat one of the biggest threats facing the public.
He said: “While some ‘unregulated’ Crypto experiments have clearly failed, use cases prioritizing security, regulation, and efficiency are making a real difference in everyday applications.”
“Take app fraud, for example, causing victims losses of up to £2.3 billion in 2023. Given the extent to which fraudsters manipulate victims, banks struggle to mitigate this issue.”
“Blockchain smart lock systems ensure funds are only released under specific transaction conditions, significantly reducing the risk of fraudulent activities, curbing unauthorized transactions, reducing banks’ reimbursement expenses, and sparing victims from shame and pressure due to being deceived.”
“These locks provide convenience for all parties involved, allowing users to decide when to unlock funds for designated recipients. For instance, during checkout, all parties agree to transaction terms; then funds are locked in the customer’s account, awaiting confirmation of goods delivery; once verified, funds are immediately transferred to the seller.”
“This is just one example of how blockchain is changing industries through practical everyday applications.”
What’s Next for Blockchain?
Angus Fletcher, CEO of payment technology company Fnality, looked ahead to the role of blockchain in bridging the gap between the old and new financial worlds.
She stated: “Blockchain has the potential to bridge the gap between DeFi and traditional finance, with many innovations and applications currently being explored. When using blockchain for wholesale payments, Fnality’s vision is to establish an interconnected network of digital payment systems that can manage liquidity between different currencies.”
“Fnality has launched in the UK, with plans to expand to the US, Europe, and eventually Asia, enabling round-the-clock instant transactions and settlements across different locations. This is a crucial step in eliminating settlement risks, time zone barriers, and the massive costs of intermediaries. By achieving near-instant settlement, this will provide core payment facilities for new tokenized markets.”
“At the same time, we see traditional markets moving closer to T+0, with the US set to achieve T+1 this year, and the UK and EU possibly following suit within the next two years. Companies like Fnality will be able to provide the necessary infrastructure to continuously shorten settlement times, reduce cross-border risks.”