Blockchain Technology for Secure and Transparent Business Transactions

Digitalisation is an inevitable phenomenon on its way to going mainstream in every field of life. Today, there are many applications of digitalisation, such as the Internet of Things (IoT), cryptocurrency, and more. Smart objects, including wearables, cloud computing applications, etc., have transformed our lives. 

Blockchain is a state-of-the-art technology, bringing a revolution in the security of the digital world. It is a revolutionary technology because it not just contributed to the financial industry but also elevated the functionality of every digital industry. Thanks to blockchain technology, we can effortlessly make transactions fast without paying extra fees. 

We will discuss the technical ways of blockchain through which it makes business transactions secure and transparent. Moreover, we will highlight the benefits of blockchain technology so that you understand this technology with relevant details. 

Also read: Green Technology: Innovations for a Sustainable Future

Blockchain Technology – Brief Overview

If you are familiar with cryptocurrency, you will know the term blockchain. If not, let’s have a brief introduction to this top-notch technology. Blockchain is the core foundation for many tech-based and digital systems like cryptocurrency and Non-Fungible Tokens (NFTs). 

Not just that, Web 3.0 is entirely created on blockchain technology, making it a revolutionary technological innovation. But you may wonder, what exactly is a blockchain? Simply put, it is a digital notebook that records your business transactions and other data. This digital notebook (Ledger) is robust in terms of security, making it a headache for cybercriminals. 

To further elaborate on the blockchain, be mindful that it keeps the record of your transactions forever in a decentralised block-based system. The blocks are operated through complex mathematical calculations and a private key that the owner has. Also, the record of every transaction is public, contributing to the blockchain’s transparency. But, this transparency does not breach your privacy since it involves privatising sensitive data. 

Related: Blockchain Beyond Cryptocurrency: Real-World Applications

How Blockchain Technology Improves Business?

Now that you know about the basics of blockchain technology, it is essential to know its role in the current world systems. Be it finances or modern computing, blockchain is everywhere. It has several perks in every industry, which makes it a popular, sustainable, and adaptable innovation. 

As blockchain works on a block system, it has separate and dedicated block-like storage for every data we input. Data censorship becomes impossible with the use of blockchain technology. We have enlisted a few ways that make blockchain effective. 

Related: Future Uses for Blockchain Technologies

#1. Tamper-Proof Data Record

The first way blockchain brings transparency and security to financial transactions is through constant and immutable data records. This record is forever unless that specific record-holding blockchain is deleted. Be mindful that this feature enables users of every kind to trust and use blockchain technology for record-keeping purposes. 

Let’s illustrate the unchangeable record-keeping of blockchain through a general example. For instance, property A belongs to a person named James. He has two children, Robert and Rose. The initial information about the property owner is in the blockchain, and James transfers the ownership to Rose. 

What if Robert claims ownership after the death of his father? Will the property go to Robert? No, due to the record stored in a blockchain that reflects every stage of the property ownership. Thus, it brings transparency and security to every walk of life. 

#2. Decentralised Network

In conventional finance, you come across an intermediary that regulates financial transactions. Everything comes under the supervision of a central body, such as a bank or governmental organisation. This intermediary will charge a certain fee from every user of their financial services, making the banking expensive and packed with extra costs. 

On the contrary, blockchain is a Decentralised Finance (DeFi) that operates independently. In other words, no bank or third-party organisation has anything to do with its affairs. Therefore, blockchain technology is an independent and cost-effective system for businesses and individuals. 

Be mindful that cryptocurrency or other blockchain-based financial systems are not completely independent. A few individuals with high-intellectual and logical abilities hold control of these blockchains. Luckily, they can’t make changes to this system based on their personal motive due to the transparent and public nature of the DeFi system. 

#3. Smart Contract

In blockchain technology, smart contracts are essential phenomena that include handling the terms for a specific contract. The smart contract enables any party to use the transparent and trustworthy blockchain system to create mutual terms of agreement for the contract execution. Therefore, it makes the process facile and hassle-free. 

On top of that, the conventional financial system involves disputes between dealing parties due to an intermediary and its applied terms of regulation. Thus, a blockchain is a lavishing platform for handling dispute-free business. 

#4. Well-Established Cybersecurity

Cybersecurity is the need of the hour since digitalisation puts the entire database online. It provides a benefitting edge to cyber criminals and evil-minded tech experts to exploit this opportunity. Blockchain technology is the best antidote for this complication. 

With a robust and efficient digital system that is transparent and secure, making an evil move from any tech expert becomes excessively challenging. To play unauthorisedly with a single file kept in a blockchain, cybercriminals will need permission from every member of that blockchain network. Hence, blockchain is a secure platform for businesses and organisations. 

Related: Blockchain and Cybersecurity: A Powerful Duo

#5. Know Your Customer (KYC) Compliance

KYC is such an essential step in terms of the security of financial transactions. Know Your Customer Compliance is a widespread technique that banking systems employ to verify their users before executing the contract. Keeping businesses away from unlawful activities, such as money laundering, terror funding, etc. is important. 

The transparency of blockchain technology is a quick solution to this step of conventional financial systems. The entire database of a user is public, displaying their activities on the blockchain. It reduces the possibilities of crimes while enhancing financial transactions efficiently due to fast compliance. 

Frequently Asked Questions

How Does Blockchain Secure Financial Transactions?

The robust data structure and blockchain storage network make financial transactions secure and safe. The data is public inside a blockchain network, and alteration needs permission from every network member. Thus, blockchain is never an easy target for breaching financial transactions.

What Is the Best Secure Example of a Blockchain-Based Application?

Ethereum is a cryptocurrency asset with a secure network and platform based on blockchain. The safety of this crypto platform is top-notch, making it a nightmare for evil hackers and cybercriminals. Moreover, its consensus mechanism is Proof-of-Stake (PoS), which is unbreakable. 

Why Is a Blockchain Decentralised?

The purpose of decentralisation is quick and cost-effective transactions worldwide. Intermediaries include extra efforts that consume more time and money. A decentralised technology like blockchain is the best alternative for facile business transactions with effortless KYC compliance.