Finance on Blockchain: How Utility Blockchains Will Revolutionize Global Finance

Finance on Blockchain: How Utility Blockchains Will Revolutionize Global Finance


While much of the focus on blockchains in recent years has been on the speculative price of tokens issued on them, thankfully things are beginning to shift and there is an increased awareness of the potential for blockchain technology to disrupt industries.

One sector that is already beginning to feel the effect is finance. It’s perhaps one of the most obvious industries for a technology designed to reduce friction and increase openness to shake up. This article will explore how scalable utility blockchains are set to revolutionize global finance.

Payments and remittances

Of all the areas in finance blockchain could disrupt, payments and remittances are perhaps the most obvious. The friction in global payments and remittances is well understood, and ever since the invention of the internet, entrepreneurs have been working on ways to reduce it.

When Satoshi Nakamoto released the Bitcoin protocol, he was referring specifically to the small, random transactions it could enable. He explained how, due to the overheads of trusted third parties, the smallest variable transaction on the internet was relatively high, but Bitcoin had been designed to change that.

As the BSV blockchain shows today, it is possible to trade on the BSV blockchain for as little as 0.00001 cents per transaction. For all intents and purposes, transactions arrive immediately. For anyone involved in the payments and money transfer industry, the revolutionary potential of such technology is patently obvious.

With small fees and no “permission” needed to start using BSV, the world’s poorest people can start shopping online for the first time. Businesses, individuals and other parties can save billions per year in transaction fees, and the number and speed of global payments can increase to unimaginable numbers.

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Five dollars saved in fees means a lot to families in the Philippines and South Africa as they receive remittances from abroad, the ability to accept and make micropayments opens up new business models for entrepreneurs, and the time-stamped nature of blockchain-based payments means fraud can be easily detected and prevented . Payments and remittances will never be the same (in a good way) once the world wakes up to blockchain technology’s ability to disrupt them.

Tokenization of assets

Another relatively well-understood use of blockchain in finance is the tokenization of assets. But while the concept itself has been discussed at length in recent years, few have dared to imagine how far this could go, mostly due to the technical limitations of many well-known blockchains such as Ethereum.

In short, asset tokenization involves issuing tokens on scalable blockchains to represent real or digital assets. Real estate, cars, stocks and shares, gold bullion, art and just about anything you can think of can be represented by tokens on the blockchain.

What would be the implications of asset tokenization at scale? To name a few, accurate and indisputable records of ownership, verified authenticity, frictionless transfer of ownership, time-stamped records of purchases and sales (including real-time collection of taxes and duties), and fractionation of assets are some of the possibilities.

By perfecting the ability to fractionalize assets, it will be possible for dozens, hundreds, or even thousands of people to own a piece of real estate, high-end art, or other valuables. Although there are legacy platforms that enable this to some extent today, tokenization on blockchains will eliminate the need for trusted third parties, reduce costs, and automatically provide time-stamped public ledgers everywhere.

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With cash-based systems like the BSV blockchain, many will be able to own tokenized assets for the first time, owning property on an immutable ledger from which records cannot be deleted. Think how it changes the world!

Rewards and loyalty programs

Reputable businesses across all industries have rewards and loyalty programs to keep loyal customers happy. However, blockchain technology could fundamentally change how loyalty programs work in several positive ways.

Blockchains can make loyalty points interoperable and can even create markets for them. While in traditional loyalty programs points can only be used in the business from which they are earned, blockchain enables them to be interoperable, potentially allowing you to use points earned at Walmart to buy a coffee at Starbucks (NASDAQ: SBUX ) or to and by selling them or exchanging them for other types of points.

As with all areas, blockchain makes it much more difficult to commit fraud and steal loyalty points. Since all transactions are traceable on the blockchain, any fraud committed will be visible to everyone, preventing this type of behavior. Blockchains can also allow businesses to issue their own loyalty points securely, reducing the risk of fraud.

Blockchain-based token systems can also improve the customer experience in terms of loyalty points. Instead of tracking your points through multiple apps, it is possible to create a portal where all your points earned from different businesses are visible and, as mentioned above, potentially tradable with other users.

For businesses, all of this will lead to increased engagement and better understanding for customers. For example, Walmart notices that a given customer always trades his loyalty points for others who can buy him coffee, that’s a valuable marketing insight!

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The financial revolution is upon us

As the obsession with blockchain token prices dies down, a greater understanding of the technology’s potential to revolutionize finance is underway. However, for any of the above to be possible, scalable public blockchains with extremely low fees will be required.

To learn more about how blockchains can and are being used to change industries for the better, join us at the London Blockchain Conference between 31 May and 2 June. Grab your free ticket now to mingle with like-minded blockchain enthusiasts focused on the real-world applications of this powerful, world-changing technology.

Whether you are a business building on a blockchain, a business or government seeking solutions, or just interested in learning more about how utility blockchains work, we hope to see you there!

See: Blockchain for banking and finance

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New to Bitcoin? Check out CoinGeeks Bitcoin for beginners section, the ultimate resource guide for learning more about Bitcoin – originally envisioned by Satoshi Nakamoto – and blockchain.


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