The idea of blockchain technology goes back to the early 1980s when David Chaum came up with the concept. Nowadays, you may know blockchain best for housing cryptocurrencies such as Bitcoin. Blockchain technology records all transactions for Bitcoin in an effort of transparency. However, you can use blockchain tech for more than cryptocurrency. In today’s world, blockchain has many uses in finance because of its secure method of conducting transactions. Let’s take a look at some of these uses.
Blockchain Finance Use Cases
#1: International Transactions
As the world becomes more connected economically, the ability to carry out financial transactions overseas has become paramount across many industries. Because of regulations with banks and credit card companies, these matters can be difficult and time-consuming. They also risk fraud and cyberattacks because of their sensitivity. Blockchain technology can be a way to mitigate these financial issues.
#2: Insurance Claims
Insurance is one of America’s largest industries and one of the most significant beneficiaries of blockchain technology. Almost everyone you know has insurance, whether it is health, auto, life, home, or something else. With many different forms of insurance available, blockchain has uses across the industry with its ability to make processes more efficient and secure.
For example, blockchain benefits insurance companies greatly by reducing administrative costs. Administration can be time-consuming and costly, so organizing it with blockchain technology can make processes more efficient and save money. One of the most significant benefits of blockchain for insurance companies is reduced fraud. Using smart contracts will help customers make only one claim for an incident and save insurance companies the hassle of fraudulent claims.
#3: Inheritance Money
Though it’s a new concept, people are starting to use blockchain technology for their estates. Inheritance money can be a complicated concept and many who inherit money don’t experience the best results without care and planning. Setting up plans for tangible assets such as cars and houses is standard practice, but doing so for cryptocurrency has its challenges. Right now, there are no regulations for passing down cryptocurrency. When you die, the crypto you own doesn’t automatically transfer to your spouse or children. It will sit on the blockchain forever unless someone can access your public or private key. One solution companies have come up with is financial services dedicated to crypto inheritance specifically.
Companies can allow customers to lock their cryptocurrency keys among other private keys and give these passwords to designated people. When the crypto owner passes, the inheritors can start a secure process to access the crypto. For example, a person may give their spouse a key. Once the person dies, the spouse can trigger the key and access the inheritance after a particular time has passed. If the person hasn’t died, they can stop the transfer. These blockchain security measures help decrease instances of financial fraud in estates.
#4: Real Estate
Real estate is a large and complex industry, with the market reaching a value of $370 billion in 2022. Transactions in real estate happen all the time for rent, mortgage payments, and deeds transferring to new owners. Blockchain can help with a high volume of financial transactions by adding an extra layer of security. This technology can make processes more efficient by reducing the amount of paperwork and speeding up transfers and other procedures.
#5: Musician Royalties
Musicians use streaming services like Spotify, Apple Music, and Bandcamp to distribute their music. When they release their music on these services, the artists get royalties. Sometimes an artist releases their music exclusively on one service, and blockchain can come to the rescue to reduce piracy. Blockchain can ensure an artist’s music file only exists on their partnered service, making piracy more difficult. Streaming services can benefit from blockchain tech by using smart contracts. With this method, they can make payments to artists on their platform more transparent and secure.
Blockchain Becomes Mainstream
You may have known blockchain for years as a way to house cryptocurrency, but as time goes on, people are coming up with new ways to use this technology across multiple industries such as finance. Blockchain makes transactions transparent and secure, so companies are starting to use it for international transactions, insurance claims, and real estate. Though blockchain is a relatively new concept, people are even beginning to use it for their inheritance as cryptocurrency investment becomes more popular.