- Posted by: UKDE
- Category: Blockchain, Corp, Economics, Finance & accounting, Innovation, Investment, meta, News
The words blockchain and cryptocurrency have been used interchangeably since their inception, which has both helped and worked against the two. The terms being so intertwined sow confusion – blockchain is cryptocurrency and cryptocurrency is blockchain. On the surface, this is true but there also lies a deceit in this truth.
People know what a cryptocurrency is, thanks to the spreading knowledge of bitcoin, blockchain ended up being discounted as being another term for digital currency. Blockchain technology has been routinely stripped of greater importance to many, when it has the potential to transform much of how information is processed online; it’s the operating system, with cryptocurrencies being one application of that within the framework.
Most banks, businesses and jurisdictions are aware of the importance and functionality of blockchain technology and have been exploring avenues to integrate it into their systems, with one example being Distributed Ledger Technology (DLT).
DLT acts to provide a database, which acts as a decentralised network to share information across a wide scope of individuals, organisations or places, so contracts or transaction ledgers are free from the manipulations or cyber-attacks they could face if housed in a single central authority – this is where blockchain technology can transform trading.
Trades go through settlement processes comprising of clearing and other aspects of the regulatory process, all are time consuming. In an age where processes are streamlining and moving faster, without seeing a decrease in accuracy, blockchain technology addresses these concerns with the added use of easily tracked audit trails and smart contracts; this results in a reduction in processing time, whilst ensuring transparency, security and trust.
The transparent nature of the technology allows trades to be done directly between parties, boosting efficiency. Trade finance has struggled with high levels of inefficiency and fragmentation since the start, and globalisation has made the flaws in the system even clearer.
The future signals towards a connected, automated and transparent world, and these are values blockchain technology embodies.