Tapping into the Applicability of the Blockchain Disruption Today, everyone seems to be "into" Blockchain and the next hype cycle will centre on blockchain! But what is blockchain and, where is it applicable?

By Ritesh Verma

Opinions expressed by Entrepreneur contributors are their own.

You're reading Entrepreneur India, an international franchise of Entrepreneur Media.

Shutterstock.com

The blockchain is often considered synonymous with Cryptocurrency, while its applicability is perceived to be limited to financial transactions. And, Trade Finance is considered the largest prospect for the same.

However, I am sure we all understand that Blockchain has more to it! Although it is a simple concept, its implications are immense.

In fact, some ministries are considering leveraging blockchain for purposes like Land records validation et al. For example, UAE has a blockchain vision and strategy 2021 for validating and authenticating transactions. The state of New York has offered a "BitLicense', which allows businesses to conduct virtual currency activities on a DLT-infrastructure (Distributed Ledger Technology or blockchain). The Australian government, too, has offered start-ups the facilities to further develop their blockchain initiatives. Similarly, in India, the technology is being adopted at commercial banks and research institutions. These institutions have undertaken DLT–based solutions for trade finance and cross-border remittance.

To understand this further, let's take the example of the KYC process. Almost all organisations invest millions in Tele and Field Verification to get the KYC right. However, this process can easily be converted into a blockchain.

Thus, the concept of KYC will be revolutionised with the use of blockchain. With blockchain, the customer will be able to upload the required documents for his identity and address to a central site and the hash algorithms will be generated for securely archiving it.

The bank that wants to onboard this customer will then send a request to the central nodal agency for the documents. Along with the documents, the entire block of verifications and validations will be sent to the bank. With each validation, in multiple domains and agencies, the chain will get stronger and authentication addressed.

The solution will eliminate issues with the current approach to KYC and provide the following stack of features:

  1. An immutable and secure database for maintaining integrity, accessibility and accountability

  2. Permission-based access to information, which will allow data to be available only to accredited organizations

  3. Reduced cost of processing with automation

  4. Streamlined processes enabling clients to consign more quickly into banks, companies etc.

  5. Reduce the risks of fraud and operational errors

Thus, Blockchain holds tremendous potential for disruption. In the coming years, it can be used to create new business models, reduce risks and revolutionize compliance. However, large-scale adoption will require time as the technology is still being tested and use cases are being implemented gradually, on a small scale. The blockchain disruption is underway, and it is incumbent on us to seize it.

Wavy Line
Ritesh Verma

Head – Business Solutions Practice, Newgen Software

Related Topics

Money & Finance

3 Ways to Create Multiple (Big) Streams of Income

Here are three ways to create multiple streams of income. These strategies require effort and resources but offer significant financial potential.

Leadership

The Real Reason Why The Return to Office Movement is Failing is Revealed in New Study

There is a vivid sign of the disconnect between employees and their workplace, a glaring indication that companies need to revise their scripts to improve their hybrid and remote work policies.

Lifestyle

Entrepreneurial Well-Being: An Ignored Aspect of Entrepreneurship

Entrepreneurs are portrayed to be heroic, and the journey is glorified. But what about their daily stressors, long working hours and uncertain work environment?

News and Trends

B2B Fintech platform BharatNXT Raises $1.2 Million Seed Fund

The funds will be utilized to invest in product development and expanding the team size by 4 times and enhancing the scalability of the core technology to accommodate ten times the current growth

News and Trends

KarmaLife Raises INR 44 Crore In Extended Pre-Series A Funding

The fund raised will be utilized for scaling, expanding into new geographies and launching more products

News and Trends

The Productivity Formula: These 5 AI Tools Will Help the Entrepreneur In You Make Prudent Use Of Time

It is no hidden fact that early-stage founders have to don multiple hats simultaneously to get going on their big dream. And with multitasking comes a gloomy possibility of errors and missing out on important dates, tasks and meetings.