Blockchain is the new Digital Identity and private keys to ownership of any digital asset. This places a new and secure way to manage identity in the digital world that avoids exposing users and sharing too much vulnerable personal information.
Tokenization allows authenticating a unique physical item to a corresponding asset. This essentially means tokens are used as to bind the physical and digital worlds. These digital tokens are useful for supply chain management, intellectual property, and anti-counterfeiting and fraud detection.
Banks and other large financial institutions that help individuals form digital relationships over the net are forced to secure the account information they hold against cyber-attacks. Banks and Credit Bureaus have been hacked, resulting in the exposure of customers' intimate financial details. Blockchain technology offers a means to automatically create a record of who has accessed information and set controls on permissions required to see sensitive data. This also has important implications for health records.
Accounting and Auditing
Whereas most databases are snapshots of a moment in time, blockchain databases are built from their own transaction history. They are a database with context, a history of itself, a self-contained system of record. The implications for auditing and accounting are profound.
Version of smart contracts seeks to use information and documents stored in blockchains to support complex legal agreements and remove intermiadates that have a central source of control. It allows for contracts to be executed as soon as all conditions and agreements are met.
Clearing and Settlement
In the world of stock trading, we often hear the term 'T+3'. This means, a trade (T) is followed by three days before the trade is accepted (settled). There are non-blockchain ways to get this number down, but not without compromising security and risk. With blockchain technology, however, trade is settlement, and we have a T+0 equation.
In the case of banks, for example, this could mean improving efficiency in anti-money laundering (AML) compliance. Blockchain technology can be calibrated to do different things - permit transactions or report transactions of a certain type according to exact rules. This means that banks could automate regulatory reporting or transaction authorization.
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