Blockchain is a digital ledger system that utilizes an advanced and efficient method of sharing information within a business environment. It enables one to have sound, fixed evidence of orders, payments, accounts, and any other transaction that has taken place. This is a distributed database that is immutable and it is currently transforming many sectors. Now let us explore the different areas that are applying this technology and the effects of its application.
Energy
Blockchain technology is revolutionizing the energy sector in 2 key ways:
1) Peer-to-Peer Energy Trading: Owners of solar panels can sell the energy to their neighbors or other people via the blockchain. These transactions are done by smart meters, and that is why efficiency is related to openness.
2) Crowdfunding for Solar Panels: Through the use of blockchain, crowdfunding can help bring solar energy to people who do not have access to electricity. These projects are sponsored and two can set up a panel with some expectation of generating income from rental fees once the pits are in place.
These advancements reveal that blockchain enables the peer-to-peer trading of energy and the growth of renewable energy sources.
Challenges of Traditional Financial Systems:
1) Batch Processing: The transactions are processed in a batch manner and hence may sometimes take a while.
2) Manual Reconciliation: Such navigation and account reconciliation processes need manual intervention to validate and complete the transactions.
Example in Finance:
The Singapore Exchange Limited uses blockchain for:
1) Harmonize the Interbank Payment Accounts.
2) Reduce processing times
3) Enhance transaction accuracy
Trade finance and securities trading are two other fields that have also used the application of blockchain. Thus, the transparency and security of the sector should be improved. Some of the best practices of blockchain websites include showcasing how blockchain alters the current financial system. Because of the use of blockchain technology, innovative web3 social media platforms are being developed for integrating blockchain in the process of handling financial transactions.
