Many companies are vying for a type of native digital trading free of a physical presence. Some insurance companies digitize and automate several processes, expediting the speed and precision of settlements and claims while some FOREX companies have drifted toward blockchains to expedite trading. While blockchain is an incredibly useful and multi-purposed innovation, it is not yet the magic bullet for FinTech issues.
At the core of blockchain is the “hash ledger.” Anything within this ledger is immutable and held independently by many. Any change in this ledger entry or re-sequencing of entries, invalidates the hash codes. Thus, databases are trustworthy. It is not hard to affix a hash ledger to a legacy system. You can use one for data recording in an existing system and yield certifiable data without ditching the old system. “Cobalt” streamlined the size of data needed for validating trade with one, making trades easier to watch, recognize and finish.
What About Contracts?
Traditional contracts are one venue where blockchain is currently insufficient. Conventional contracts are a poor fit for blockchain tech, because they demand a verifiable time and source of execution, as well as being able to ID each party.
The largest hurdle to public adoption of blockchain is its current perception as some sort of intricate, computer-intensive cryptocurrency in spite of the reality that it is just a simple way to yield unique, certifiable data. If people can come to a common understanding about this technology, figure out a standard for its usagee, see that it blockchain is superior to existing methods and secure enough for banks and their customers, blockchain will become quite common in the finance sector.
Immutability
Currently, tech companies are devising ledgers to watermark when and where data came from, meaning such digital transactions could have physical verification. While time is standardized by Paris’ Universal Time, blockchain not tethered to any centralized authority; consequently, transactions will need proof that they occurred at some verifiable place and withing an exact moment in time. Successfully figuring out a way to adding a UTC timestamp and a point of origin to a transaction will fulfill all of the qualities necessary for blockchain transactions to have a unique identity.
Immutable ledgers are multi-purposed; proof of GDPR-compliance will become increasingly vital in regard to personal data like medical information. If blockchain is to overtake its physical competition, it needs to adapt to the dictates of that competition.
