In recent years, digital currency has been gaining popularity. However, as different use cases continue to emerge and be rapidly adopted, the perspective that digital assets are merely a form of currency is gradually being forgotten by people.
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, we will take a look back at the technology driving all of this: blockchain.
In 1991, the first paper on using Crypto secure blocks on a chain was published. In less than twenty years, this idea was validated, and BTC was born.
Since then, this technology has made great strides, with countless 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, focused on how capital markets are beginning to take notice of the impact of blockchain.
Rooz stated: “Blockchain technology is changing the way the global financial system operates. We have seen industry-leading companies like Goldman Sachs DAP, JPMorgan Onyx, Broadridge’s DLR, HSBC Orion, and others move their projects from PoC to production, and this momentum continues to grow.”
“The scale of this change is highly complex, and the next challenge institutions are working to address is how to maximize interoperability in a broader market.”
“Significant progress was made 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 settlement within current regulatory frameworks is expanding, and evidence of its potential to reduce settlement and counterparty risk will continue to drive the development of new use cases and business models.”
“Global capital market participants, including central banks from various countries, are closely watching blockchain technology. The increasing number of pilot and production projects indicates 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 of the BSV Association (BSVA), also shared similar views.
He said: “The past year has seen substantial developments in blockchain technology, moving from initial financial applications to more complex systems affecting various industries.”
“Of note is the development of the enterprise-grade node software, Teranode. It significantly enhances transaction processing capabilities, breaks the limits of blockchain scalability, and enables broader socio-economic 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 Finance
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 overcome. This includes reducing reliance on trusted third parties, creating more efficient data management, and monetization methods.”
“For example, the CERTIHASH Sentinel Node developed in partnership with IBM has completely revolutionized enterprise network security management. By reducing threat detection time from an average of 204 days to almost instantly, this application meets the urgent need for rapid response to increasing network threats. Given that a data breach of over 30 days can cost a company up to $9 million, this capability is highly valuable.”
“In the agriculture sector, companies like Smart Grow Agritech LLC are leveraging blockchain to provide more precise production tracking and data management, empowering farmers. This integration not only enhances agricultural productivity but also supports sustainable practices through optimizing resource utilization and ensuring compliance with evolving agricultural regulations.”
“Furthermore, 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.”
Addressing 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 faced by the public.
He said: “While some ‘unregulated’ Crypto experiments have clearly failed, those use cases prioritizing security, regulation, and efficiency are making a real impact in improving everyday applications.”
“Take app fraud, for example, which caused victims £2.3 billion in losses in 2023. Given the extent to which fraudsters manipulate victims, banks find it challenging to tackle 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, lowering banks’ reimbursement expenses, and sparing victims from feeling ashamed and pressured due to being deceived.”
“These locks provide convenience for all parties involved, allowing users to decide when to unlock funds for specified 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 transforming 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 DeFi and traditional finance.
She said: “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 envisions establishing an interconnected network of digital payment systems that can manage liquidity between different currencies.”
“Fnality has already launched in the UK, with plans to expand to the US, Europe, and eventually Asia, enabling real-time trading and settlement across different locations. This is a significant step in eliminating settlement risk, time zone barriers, and the massive costs of intermediaries. By achieving near-instant settlement, this will provide core payment facilitation 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 continue reducing settlement times, lowering cross-border risks.”
Written by Francis Bignell, translated from Chinese by the Chain Market team.