As per a report by Markets and Markets, the global market for blockchain in insurance is expected to reach USD 1,393.8 million by 2025 from USD 64.50 million in 2018, at a CAGR of 84.9%. 

Blockchain technology is helping the insurance sector radically transform operations by providing a myriad of benefits in the form of reduced costs, enhanced customer experiences, improved productivity, increased transparency, and more. 

The use of blockchain in the insurance sector is expected to grow dramatically in the years ahead. According to Gartner, blockchain is estimated to be more heavily adopted by organizations by 2023 and lead to $3.1 trillion in new business value by 2030.

Therefore, it’s the perfect time for organizations to unlock the potential of blockchain, understand how to apply the technology effectively, and grow businesses. 

Keep reading the article to know the benefits of blockchain for the insurance sector and the various real-life use cases. 

Let’s dive in!

How can Blockchain benefit the insurance industry?

Blockchain technology can bring about significant efficiency gains, transparency, faster payouts, cost savings, and fraud prevention while allowing for real-time data sharing between several parties in a trusted manner. Blockchain can also enable new insurance practices to build better products and markets.

So, on that note, here are a few key benefits of Blockchain in the insurance industry: 

1. Blocks false claims: One of the biggest pain points of the insurance industry is fraud. According to the Coalition Against Insurance Fraud, Americans suffer $80 billion worth of damage every year due to insurance fraud. 

Though insurance companies use smart analytics and other methodologies to deal with false claims, fraudsters continue to develop more sophisticated ways to dupe companies.

Blockchain’s innate feature of capturing time-stamped transactions with complete audit trials makes it extremely difficult for fraudsters to commit fraud. 

For instance, a blockchain-powered ledger can be used to track data around high-value items like jewelry. This ledger can replace authenticity certificates in order to avoid duplicate claims, fake replacements, and fake insurance claims. 

2.  Enhances customer experience: Continued loyalty to one service provider is no more a given. Customers look forward to providers who offer lower premiums. Intense competition from new players operating innovative models such as on-demand insurance coverage has added to traditional insurers’ woes. 

In such situations, winning customers’ trust without compromising heavily on price margins has become crucial. 

One way to address this is to use blockchain to enable automated processing using smart contracts. Business agreements are built into the blockchain in this model, and payments are auto-triggered when certain conditions are fulfilled.  

3.  Improves trustworthiness: One of the significant advantages of using blockchain in insurance is to create trust between different entities. The inherent feature of consensus algorithms built into blockchain allows immutability and auditability. 

These algorithms make it easier to create smart contracts on the blockchain, benefiting the insurance industry. Moreover, as blockchain is an immutable ledger, smart contracts enable timely, transparent, and trustworthy transactions. 

When the industry uses a shared claims ledger for inspection with no per-transaction charge, it can reduce fraud. Regulators can monitor all insurance variables in real-time on the ledger, making auditing more seamless. 

4.  Empowers more automation: Smart contracts streamline the insurance process and enable transparent transactions. The entire insurance claims process works smoothly as the blockchain executes on the smart contract terms. 

What makes it more exciting is that blockchain does it automatically, which makes automation a massive benefit for insurance companies. As a result, blockchain saves time, effort, and money by lowering administrative costs for insurance companies. 

5.  Helps collect and store useful data: Insurance companies thrive on data. Blockchain can collect a wide range of usable data using technologies such as artificial intelligence (AI) and Internet of Things (IoT). 

Data collected by IoT is stored on the blockchain and then read by AI, helping your company make informed decisions on insurance premiums. 

IoT devices can also help monitor a vehicle to qualify insureds for safe driver discounts and give your insurance company more data on vehicle performance and driver habits to work with.

With such exceptional benefits, the insurance industry can look forward to leveraging the new technology for positive change and growth. 

In case you want to know more about IoT and how it works, read, What is IoT and How it Works. 

Top use cases of Blockchain in the insurance industry

Now that you have seen the benefits of blockchain for the insurance sector, let’s take a look at some top use cases to see how it can actually help organizations.

1. Smart contracts: The insurance industry has relied on trusted intermediaries such as underwriting agents and insurance brokers to distribute and arrange contracts of insurance. However, smart contracts eliminate the need for human intervention. 

Smart Contracts are basically self-executing contracts that are executed automatically via underlying blockchains to ensure that the terms of agreements are met/unmet. In the context of insurance, the terms of agreements between policyholders and insurers are written into the code upon which smart contracts are built.

As all transactions related to smart contracts are recorded on a blockchain, there is a high level of transparency. This is because each transaction is publicly viewable on the blockchain.

Moreover, as there is no human interference, the risks of unauthorized manipulation and errors in contracts are significantly reduced. Also, claims investigation, coverage analysis, and processing are dramatically quicker as the need for manual assessment is removed. This increases the efficiency of the insurance sector and builds consumer trust and confidence in the industry.

2.  On-demand insurance: It is a flexible insurance model, where policyholders can turn on and off their insurance policies with just a click. The more interactions of all stakeholders with the policy documents, the greater the hassle of managing the records. 

For example, on-demand insurance requires underwriting, buyer’s records, policy documents, risk, claims, and so on much more. 

But, thanks to blockchain technology, maintaining ledgers has become simpler. On-demand insurance players can leverage blockchain for efficient record-keeping from the inception of the policy until its disposal. 

[Also Read: How much does on-demand insurance app development costs?]

3. Fraud and abuse prevention: Fraud costs the insurance industry a monstrous amount of money, mostly because it’s impossible to detect fraudulent activities with regular methods. As per a report by the FBI, the total cost of insurance fraud (non-health insurance) is estimated to be more than $40 billion per year. 

With blockchain, insurers can eliminate such common types of insurance fraud. When you move insurance claims onto a blockchain-based ledger, all the executed transactions are time-stamped and permanent. This means no one can modify the data due to the immutability feature of the blockchain. Thus, it can eventually reduce fraud. 

Moreover, blockchain makes coordination easier among insurers. When all the insurance companies access the same shared blockchain ledger, they know if the specific claim has been paid or not. They can easily identify suspicious behavior by using the same historical claims information.

4.  Reinsurance: Reinsurers offer insurance to insurance companies to protect them in the event of major disasters like hurricanes or wildfires.

The current reinsurance process is extremely complex, lengthy, and inefficient. Insurers typically engage multiple reinsurers, which means that various parties have to exchange data to settle claims.

When insurers and reinsurers share a blockchain ledger, detailed transactions around premiums and losses can be updated on an insurer and reinsurer’s computer systems at the same time. This can save time as well as money, and reinsurers can also automate settlement and claims processing. A report by PwC estimates that blockchain can help the reinsurance industry save up to $10 billion by improving operational efficiency.

5.  Microinsurance: Microinsurance provides security against specific perils for regular premium payments. It delivers profits only when distributed in large volumes. However, microinsurance policies don’t get the deserved traction because of high distribution costs and low-profit margins. 

With blockchain, claims handling and underwriting can be automated based on defined rules in microinsurance schemes. 

6.  Health insurance: Blockchain in health insurance enables fast, secure, and accurate sharing of medical data among insurers and healthcare providers. 

Sharing patient data between health insurance providers and hospitals can make the process of health insurance claims expensive and time-consuming.

When encrypted patient records are recorded on a blockchain, insurers and healthcare providers can access patients’ medical data without compromising confidentiality.

 The synchronized data of all patients in one place can save the industry a large sum of money annually. Moreover, changing patients’ medical records stored on the blockchain would be impossible without creating an audit trail.

7.  Auto insurance: This is another area where blockchain and insurance can bring payouts to the next level. Let’s understand this with an example. If a car accident takes place, both the insurer and client can get the requisite information with blockchain. 

While the client can expect to get an immediate payout, the insurer can see getting the car repaired by a licensed service provider.

8.  Life insurance: The death claim process today is a tedious and time-consuming process. It can take anywhere from a few weeks to over two months.

Blockchain could help automate and simplify the manual claims registration process when filing a life insurance claim. This technology also allows for greater trust among both insurers and insured by increasing transparency. 

Real-life examples of blockchain in the insurance industry

Now that we have seen blockchain in insurance use cases, let’s get into real-life examples of companies that have used blockchain for its transformative benefits. 

1.  Lemonade: Lemonade uses both AI and blockchain to offer insurance at low prices to homeowners and renters. They take a fixed fee from each monthly payment done by policyholders and allocate the rest towards future claims. When a claim is made, the smart contracts insurance in blockchain verifies the loss immediately so that the customer gets paid quickly.

2.  Ryskex: Ryskex is a blockchain insurance startup that helps insurers an easier way to assess and handle risks accurately through its blockchain-based platform.

3.  B3i: Incorporated in 2018, B3i helps the insurance market with top-notch solutions for consumers through faster access to insurance and reduced administrative costs.

4.  ClaimShare: It is an app that uses blockchain technology to deal with double-dipping. It is a practice wherein one claimant fraudulently receives a payout from multiple insurers on the same incident. ClaimShare aims to help prevent these payouts by allowing multiple insurers to share data related to claims filed.

Limitations of using Blockchain in insurance

The adoption of blockchain in insurance isn’t without challenges. Here are some snags of using blockchain: 

Complex to understand: Blockchain and its complexities make it hard for users to understand and comprehend its benefits. Before diving into this revolutionary technology, one needs to understand the principles of encryption and distributed ledger. 

It’s advisable to hire blockchain development services. The experts will not only help you understand the immense benefits of this innovative technology but will also help you adopt a robust solution as per your business needs.

Nascent technology: As the technology is still in nascent stages, coping up with issues such as data limits, transaction speed, and verification process will be critical in making Blockchain widely applicable.

Uncertain regulatory status: Insurance regulations are dynamic, uncertain, and need to be updated frequently. As the landscape is unsettled, blockchain struggles in extensive adoption by insurance carriers.

Costs: Blockchain offers massive savings in transaction costs and time. However, the initial costs are high, which act as a deterrent. Know how much it costs to develop a blockchain app. 

How Appinventiv can help overcome these challenges?

Blockchain in insurance can be a game-changer. It can reshape the way physical assets are tracked, managed, and insured digitally. At Appinventiv, our highly-experienced team of professionals not only helps you step into the world of decentralized solutions, but also helps you deal with complex situations in your journey. 

We offer a wide range of blockchain and crypto insurance development services that add scalability, transparency, and security to your business. We are also helping insurers across the globe to determine how blockchain can transform the way they do business. Our team of blockchain developers will help you understand the principles of distributed ledger and encryption and make sure to create winning solutions for your organization.

So, in case you want to build robust and scalable solutions in blockchain for your insurance business or want to know what blockchain insurance is, get in touch with us. 

Final thoughts

While blockchain technology is still in its infancy, there are already a number of use cases and applications for it across the insurance industry. The technology offers accuracy, efficiency, privacy, and more to the insurance industry. However, it’s important to understand that insurance companies that adopt blockchain services must agree to operate under ethical standards. 

Standards and processes must be aligned so that blockchain can provide insurers with better tools for sharing data, collaborating, and making insurance processes less cumbersome for users. 

Plus, insurance companies must provide regulation frameworks to safely use blockchain technology. Once these needs are met, blockchain technology can transform the insurance industry for both insurers and customers. 

FAQs

Q. How will blockchain change the insurance industry?

Ans. Blockchain technology collects and stores data more securely for the insurance industry. The use of blockchain in insurance can also lead to increased automation. Blockchain-based smart contracts can also increase customer satisfaction and reduce costs. 

Q. What is smart contracts insurance on a blockchain?

Ans. Smart contracts are programs stored on a blockchain that run when predetermined conditions are met. They are used for automating the execution of an agreement so that all participants can be certain of the outcome. 

Q. How much does it cost to build a blockchain app for insurance?

Ans. The average cost of developing a blockchain application for insurance can be somewhere between $30,000 to $90,000. However, this is a very rough estimate. There are a number of factors such as the complexity of the project and the type of platforms you use that can increase or lower the final price.

The post How Blockchain Technology is Transforming the Insurance Industry appeared first on Appinventiv.

The desirability of new forms of money as a store of value and a means of payment will determine their adoption. Stablecoins, for example, are a far cry from the old standbys of currency and bank savings.

While the benefits and drawbacks of stablecoins are debated, their popularity is undeniable. Coins worth more than $113 billion have already been issued. The question is what should be done about them, and who should be held accountable. Stablecoins may be a logical progression of the blend of public and private money that we have relied on for generations, according to responses that range from claiming that the current system is OK to boosting CBDC research.

• USDT’s market capitalization is $69.67 billion as of 12th October 2021, according to the company’s transparency balance web page, which is subject to change as per the market demand.

• By the time of writing this article, data from Coingecko’s stablecoin by market cap stats indicate that tether (USDT) exists on 408 exchanges worldwide. The data is susceptible to change as per the market trends.

• At the time of writing, the value of the total supply of stablecoins stands at $127.87 billion. 

How Are Stablecoins Used?

Most people traded cryptocurrency against government currencies and other cryptocurrencies before stablecoins became favoured.

There are many questions that come to one’s mind and the most asked one is why use stablecoins? So to understand this one should know that stablecoins are a quick and a better priced alternative to trade crypto against fiat currencies, providing for more liquidity. Theoretically, they’re also less susceptible to market price changes than other cryptocurrencies.

Crypto lending also makes use of stablecoins. Depositing USDC in a savings account with Coinbase, one of the firms behind the stablecoin, will earn you a 4% yearly interest rate. The interest rate on USDT deposits are from 1.66 percent and 13.5 percent.  

There has been a lot of talk among blockchain technology companies regarding stablecoins recently, and it can be overwhelming at times. The following are the major reasons for the use of stablecoins that we will be talking about.

Reason For The Increasing Use Of Stable Coins

Tether Under A Cloud

USDT, as the most traded stable cryptocurrency on the market, has evolved into a backbone for the whole cryptocurrency ecosystem, accounting for more than half of all crypto trades.

Tether, the cryptocurrency business behind the digital token, has, on the other hand, been beset by regulatory concerns.

Tether was the first stablecoin, created in 2014, and several subsequent stablecoins are modelled after it. For every dollar deposited, users receive one token. The tokens can then be converted back into the original currency at any time at a one-to-one exchange rate, in theory.

Tether had a market capitalization of around US $62 billion as of July 28, 2021, or slightly more than half of the $117 billion market capitalization of all stablecoins worldwide. The second-largest stable crypto boom is USD Coin, which had a market capitalization of around $27 billion in 2021.

Smart Contracts

One of the benefits of stablecoins is that they may be used with blockchain-based smart contracts, which, unlike traditional contracts, do not require legal permission to be executed. The parameters of the agreement, as well as how and when money will be transferred, are automatically dictated by the software code. Stablecoins crypto can be programmed in ways that dollars can’t.

Stablecoins are being used in lending, payments, insurance, prediction markets, and decentralized autonomous organizations (companies that function with little or no human interference) thanks to smart contracts.

Adopting New Forms Of Money

The rising popularity of stablecoins crypto boom will serve as a major driver for the widespread adoption of stable cryptocurrencies with a mainstream medium of everyday transactions and other applications.

While many stablecoins remain claims on the issuing institution or its underlying assets, and many also provide face-value redemption guarantees (a coin purchased for 10 euros can be exchanged for a 10-euro note, just like a bank account), government support is not present. Privately, trust must be built by backing coin issuance with safe and liquid assets. And, in most cases, the settlement method is decentralized stablecoin, using the blockchain model.

The attractiveness of stablecoins as a mode of payment is their strength. The potential benefits of low prices, global reach, and speed are all enormous. Furthermore, stablecoins, unlike banks’ proprietary legacy systems, could allow for smooth crypto payment systems of blockchain-based assets and can be embedded into digital apps due to their open architecture.

Competitive Economic Markets

Stablecoins, by definition, make economic markets more competitive. Rather than relying on centralised banking, fintech companies can create their own stablecoin, use an ACH API to facilitate the transaction, and send money internationally.

Stablecoins crypto are becoming more popular as a means of exchange. Stablecoins make sense for cross-border crypto payment systems and global remittances because of their ease of usage for foreign transfers.

The Office of the Comptroller has also approved the usage of stablecoins by banks alongside CBDCs, indicating that stablecoins have a one-of-a-kind potential to be established and its market regulated by federal financial regulators. While this may reduce the decentralized stalin nature, it also raises public interest in stablecoin use and promotes competitive economic marketplaces.

Open Banking

This asset provides a viable option for open banking to arise because of decentralized banking mixed with the stability of stablecoins. Open banking depicts an overall economic system in which third-party applications provide access to and control of banking and financial accounts, implying that there is less centralised control over financial transactions and greater outsourcing of money activities is possible. 

Decentralized banking allows more financial organisations to operate without the need for a centralised physical presence. These institutions rely on third-party partners to provide security, financial compliance, and the capacity to outsource and mitigate risk in order to maintain financial compliance.

More money is in the hands of more individuals thanks to open banking. More people than ever before have access to the internet. More people will be able to buy digital currencies, find creative ways to climb out of poverty, and avoid the restrictions imposed by national fiat currencies as access levels rise.

How Stablecoins Maintain Valuations?

In the past, the most stable currencies were those that were tied to an underlying asset, such as gold.

The US dollar is today’s gold standard’s replacement. The dollar is tied to at least 14 currencies. The countries that issue them rely on the dollar’s worth to keep their own currencies from becoming unstable enough to destroy their economies.

Stablecoins, on the other hand, aim for little or no volatility by being linked to stablecoin price assets like the US dollar or gold. Stablecoins achieve price stability through a variety of approaches. Stablecoins are broadly categorized into three groups:

• Fiat-collateralized stablecoins
• Crypto-collateralized stablecoins
• Non-collateralized stablecoins
• Commodity-collateralized stablecoins

Concluding Note

Stablecoins may provide the best of both worlds: a decentralized, anonymous, and worldwide payment method similar to a cryptocurrency, as well as consistent valuations similar to a stable fiat currency.

While stablecoins are becoming increasingly popular, the growing number of new launches and the variety of unique collateral methods used to maintain stablecoin price stability may result in a variety of outcomes and levels of success.

Each type of stablecoin has its own set of advantages and disadvantages, and none of them are flawless. However, the value and stability they may give to businesses and individuals around the world — by allowing universal access to established national currencies, facilitating payments and remittances, and supporting developing financial applications — could be disruptive.

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After Charles Hoskinson launched Cardano in 2017, it only took four years for it to become the world’s tenth-largest cryptocurrency by market capitalization.

It had a market size of $3,3 billion and a price of $0.107182 in November 2020, making it one of the most affordable cryptos available.

By the time of writing this article, the price of Cardano is $2.2, which is susceptible to change with time. It might not compete with the lofty heights of Bitcoin, which is currently brushing $53,929 (and is expected to change in the coming years),— but this price still represents a staggering growth rate. In fact, sometime back, this growth helped ADA secure new-found status with Cardano crypto being the 3rd largest crypto. Soon, the Cardano platform fell short of its triple-digit goal at an all time high of $98.91 billion.

Cardano having overtaken competitors such as Litecoin and Ripple XRP is currently one of the emerging platforms in the world of crypto. But how much will Cardano be worth in 2021 and beyond? Is Cardano a good investment? And finally, can Cardano be part of your portfolio? Before diving deep into ADA Cardano price prediction let’s read a brief intro on Cardano and ADA.

What is Cardano?

Cardano is a decentralized blockchain platform led by Ethereum co-founder Charles Hoskinson. The development of the platform began in 2015 and it was released in 2017. Its stated goal is to become a more environmentally friendly and scalable blockchain network, in part by reducing the need of energy-intensive bitcoin miners.

Cardano is to ADA what Ethereum is to Ether and Ripple is to XRP. Hence, in layman’s terms, Cardano is the name of the platform that operates the native cryptocurrency ADA. Cardano is an open-source blockchain platform which is segregated into two parts- the one is Cardano Settlement Layer (CSL) and the second is Cardano Computational Layer (CCL).

The CSL period, also known as the Byron age, allows users to send the native Cardano (ADA) coin to other blockchain participants. Like other Layer-1 cryptocurrencies like Bitcoin, it also allows for the immutable recording of transactions.

The CCL is a separate layer that supports tokenization, smart contracts, and decentralized apps by combining numerous components published throughout the Shelley and Goguen eras (dApps).

The Cardano network provides developers with a blockchain software development platform on which they may develop smart contracts and decentralized applications. Cardano recently upgraded to the Goguen mainnet, a blockchain platform that includes token lock network features.

What is ADA?

ADA is a cryptocurrency or digital token that runs on Cardano blockchain.

ADA does, however, serve as a means of paying for premium services on the network. Users on the network may also transfer and trade their funds through a variety of crypto exchanges, including Binance, Digifinex, and Upbit, to name a few. Daedalus, Cardano’s own crypto wallet, is a safe place to save these coins.

Cardano Crypto Price Prediction

• According to Previsioni Bitcoin, an Italian bitcoin analysis tool, the future seems brighter for cryptocurrency Cardano. As we can see from the graph below, ADA Cardano price prediction was predicted to reach $ 11.87 by December 2023 on 8th October 2021.

• While writing these stats the Cardano market capitalization is $93.7 billion, trailing only bitcoin ($934 billion) and Ethereum’s ether ($439 billion). In 2021 the ADA token has grown 1,583 percent, compared to 69 percent for bitcoin and 417 percent for ether.

• ADA is still one of the most aggressive cryptocurrencies on the market today. The ADA price is currently $2.33, which will change with time as per the market needs. To view the updated numbers, go to CoinMarketCap.
• As per Digital coin Forecast the Cardano price is estimated to rise by $3.12 at the end of the year 2021. In terms of Ethereum price prediction, it is upbeat with Wallet Investor estimating that by the end of the year 2021, it will be trading at roughly $4055.760.
• The Cardano Crypto price is expected to reach $3.83 in 2021, $7.70 in 2022, $8.93 in 2023, and $15 by the end of 2025, according to the Economy Forecast Agency platform. As per CryptoNewZ, the Ethereum price prediction for 2022 is said to reach $3400.
• According to Cardano crypto prediction for 2024, the estimated price might reach $6.5 by the end of the year. According to cryptocurrency Cardano forecasts and predictions by Trading Education, the peak for 2024 could be over $6.8, while the low may be around $4.72.
• According to Digital Coin Forecast, Eth price prediction for 2024 can be expected to reach around $6481.
• According to a price prediction by Economy Watch, Cardano price prediction, 2025 will be able to achieve the $10 barrier before the end of the year. It’s possible that the price of a coin in 2030 will be more than $20.
• The price prediction for Cardano in 2025 is projected to grow from $9 at the start of the year to $19.98 by the end of 2030.

What do you think is the reason behind the increase in cardano coin price? Let’s read below to know and understand the reason.

Why Is The Cardano Crypto Price Rising?

As individual investors are piling back into cryptocurrencies, altcoins (alternatives to bitcoin) have been soaring recently. Cardano’s ADA token has recently become a popular choice among miners.

In terms of market capitalization, ADA has a market value of almost $73.27 billion and a 24-hour trading volume of over $2.4 Billion as of October 2021. As a result, the Cardano cryptocurrency is one of CoinMarketCap’s top five cryptocurrencies.

The excitement about what is expected to be a September upgrade to Cardano that will include smart contracts, which many feel will enable Cardano to better compete with the Ethereum network, is driving part of its recent growth. Smart contracts are digital agreements written in code that, once certain criteria are met, can be performed without the need for an intermediary. Non-fungible tokens, often known as NFTs, and decentralized finance applications are made possible via smart contracts.

Second, the cryptocurrency network is due to receive a software update that will allow it to compete with larger rivals like Ethereum. Smart contracts will be added to the network as part of the update, allowing Cardano to reach out to more potential investors. In September 2021, the software upgrade could be released. Cardano’s price did not vary much during the latest crypto crisis, demonstrating its resiliency.

After getting to know the why, it’s time to see the difference between cardano vs ethereum. 

Cardano Vs Ethereum

The Cardano vs Ethereum debate is widespread in the cryptocurrency space as both networks offer similar characteristics, and investors believe that their favored coin is the best to buy. Let’s understand the difference between Cardano vs Ethereum.

• As discussed before, Cardano employs a dual-layer design. To simply put, this means that computations and settlements are carried out independently. Ethereum is a single-layer ecosystem in which calculations, smart contracts, and settlements, such as token transfers, all take place simultaneously. This separation should theoretically allow ADA to operate more efficiently, resulting in speedier transactions at a cheaper cost. Proof of stake is already used in Cardano. Meanwhile, Ethereum is in the process of switching from PoW to PoS.
• Cardano’s price rise could be due to the fact that the blockchain offers a variety of applications. It functions similarly to bitcoin in that it operates as money, but it also has voting rights. Miners are typically the ones that vote on modifications to a blockchain’s protocol. Holders of Cardano coins, on the other hand, can vote to make these modifications, giving them a bigger say in the cryptocurrency’s future evolution.
• The blockchains with Proof-of-stake uses significantly less energy than proof-of-work chains. Thus, due to the PoS technology that ADA uses, there is minimal energy in terms of energy efficiency. Cardano implements the Ouroboros algorithm, this is in contrast to Ethereum, which uses proof-of-work (PoW) protocols. Because ADA uses a closed-loop system, this is an exact physical representation of the PoS process.
• It’s also worth noticing the contrasts in Ether’s and ADA’s monetary policies. Ethereum has an infinite supply, with the supply set to grow at a rate of 4.5 percent every year. Meanwhile, ADA has a finite quantity, similar to Bitcoin. As of writing this information, there is currently 32.7 billion supply of ADA with 31.9 billion ADA in circulation, which is susceptible to change.

The Takeaway

With Cardano hitting a new all-time high, we have to wonder how well the cryptocurrency has performed. To be honest, it’s mind-boggling. ADA has increased by approximately 1,400% to date. In terms of its growth, as a result, it is a top performer in the crypto world and one of the most important cryptocurrencies to examine.

According to Nasdaq, over the month of September 2021, the cryptocurrency market saw considerable bullish momentum, with Cardano rising 126%, Bitcoin up 52%, and Ethereum’s price per Ether token up 62%. Since these numbers will change as per the market trends, thus if you want to choose any platform then the time is now.

Predicting Cardano and the broader cryptocurrency market pricing movement requires a lot of guesswork, but there are some key catalysts for ADA on the horizon. The impending upgrade fork, which will pave the way for smart contract capabilities and other decentralized-finance features, is particularly noteworthy.

The post Cardano Price Prediction- Will This Crypto Asset Be As Big As Ethereum? appeared first on Appinventiv.

The advancing necessities towards safe and easy transactions is giving birth to many technological developments. 

One such technological development is Crypto ETF.

Although cryptocurrency bitcoin has gained a tremendous popularity over the time globally and has been in the limelight for many years, ETFs (exchange-traded funds) are no doubt a pipe dream for the blockchain users. 

Blockchain ETFs in the mainstream market have already made their debut, and no doubt they were an absolute hit.

But the problem arises when bitcoin and blockchain terms are used interchangeably. It is very much possible to confuse the bitcoin ETFs with the blockchain ETFs. It is true that both of them complement each other but they are totally different.

Basically, a blockchain ETF holds a crate of traded organizations having blockchain technology ETF exposure. These organizations can either directly utilize the technology or benefit from their services to help with the development. There are two kinds of blockchain ETFs: Passively managed and Actively managed.

According to a study from, The 2020 Benchmark Survey of Financial Advisor Attitudes Toward Cryptoassets (image below), it is discovered that the financial advisors in the U.S. are keen to put their clients’ money into cryptocurrency exchange-traded funds (ETFs).

The DeFi is capturing new trends and one of them is the ETF. When we talk about ETFs, then there are multiple things which attract investors. Let us first understand the meaning of blockchain and bitcoin ETF and then we will move towards the difference between the two.

What Makes Blockchain ETF Stand Out?

Blockchain ETF is more like an average ETF where the invested company is different from an average company. It is similar to standard sector-based stock investments through the ETF category or Exchange Traded Funds. The ETFs are targeted towards a plethora of companies that deal in blockchain technology.

Blockchain companies are directly involved in profit or loss-making when people invest in blockchain technology ETFs. Blockchain means the new technology trend used for maintaining a transaction ledger and works as a decentralized unit, thus cutting costs substantially. Records have shown that investing through blockchain, ETFs have been quite risky because the companies involved in this category are mostly tech companies that work as new startups.

The problem that has been seen with these startups is that they have no guarantee of returns for the future, and they are a common defaulter on the monetary issue list and hit global regulatory roadblocks more often than not.

You will be amazed to know but post the two weeks after their launch, investors had put about $180 million in the blockchain ETFs. The volume of trading for these ETFs was much higher when compared to the other similar instruments which have been launched 4 years back in 2017 only. 

Below are some famous and best blockchain ETF cryptocurrency lists.

What is Bitcoin ETF?

An ETF or Exchange Traded Fund represents a pool of companies that have the same point of service. This allows the investors and customers to find a broader screen of companies with the same aim rather than swimming in an endless ocean of companies to make up a portfolio containing various individual blockchain technology stocks from different companies.

ETF for bitcoin cryptocurrency, is the future of cryptocurrencies that makes a similar pool where investors can get daily updates on price and latest bitcoin ETF  news. Since there are many risks involved in buying bitcoin or even a part of it, bitcoin ETF fund eliminates that problem. Here investors do not need to buy bitcoin directly, but they are open to getting all sorts of updates and daily price listings on the global and domestic levels.

There are not many available companies for investing in blockchain etf funds since there are no proper regulations till now. Most of the companies are still in an under-process state of their application as most of them have not been approved yet and will take some time.

The Gemini Exchanges 2021 State of UK Crypto Report found out that 27.5% of the people in the age group between 18-24 years old were invested in Crypto ETF.

Bitcoin ETF cryptocurrency differ according to their structure, fees, availability, and exposure. Below are some Bitcoin crypto ETF lists which are popular.

How Different are Blockchain ETF and Bitcoin ETF?

There are a few fundamental differences between mainstream blockchain ETFs vs bitcoin ETFs. Some of them are discussed herewith.

• Blockchain technology stocks are already a part of the mainstream stock market and are a hot favorite for people with some potential showing. Whereas, ETF for bitcoin stock has not made it to the mainstream stock market due to government restrictions and is still done on a virtual, hypothetical basis.

• Given the current scenarios, ETF cryptocurrency one of the best ways to invest in blockchain has taken a lot of blows from regulatory authorities and, of course, the government, which has created a lot of hindrance in its launch path. On the other hand, blockchain technology stock is a safe side of the market that does not face any regulatory changes or issues and nor is it under any scrutiny.

• The primary task of blockchain ETF is to accommodate all the companies that deal in blockchain technologies or have directly invested in global blockchain technologies stock, making it available for general investors to pour funds in. On the flip side, the ETF for bitcoin still has no future or even no forward talks suggesting that it would be launched into the standard stock market. The main problem that the bitcoin market faces is they need more and more experts on board to lead and advise the regulatory authorities regarding its benefits and the scope in the future.

• The global blockchain technologies stock has found a place in five of the top global trading regulatory markets, namely the Siren Nasdaq NexGen Economy ETF, the Capital Link NextGen Protocol ETF, VanEck Vectors Digital Transformation ETF, First Trust Indxx Innovative Transaction and Process ETF and the Amplify Transformation Data Sharing ETF. On the other hand, the bitcoin ETF pool has still not been launched in the standard blockchain technology stocks and trade regulatory markets. Since most applications from companies regarding the bitcoin ETF fund market are still under approval, it has not made a successful path into the stock market.

Parting Thoughts

Hence both these ETF options need development to be better and be more successful. They both need to work on their weak links to achieve great success in the market. In general, we can claim that the new trend is of ‘Digital Currencies’ that have become an important thing for investors.

If you still have doubts about why invest in bitcoin or global blockchain technologies stock or how to invest in bitcoin ETF, then the only thing left for you to do is find a trustworthy and reliable blockchain development company. A good blockchain development company like Appinventiv will help you expand your decentralized journey and keep you updated with bitcoin etf news.

The post Blockchain ETF vs Bitcoin ETF: Where To Invest? appeared first on Appinventiv.

However, what we should notice is that blockchain technology has far more applications than just allowing crypto trading. This tech can be employed to transform industries such as banking, pharmaceuticals, insurance, forecasting, and can be used for KYC Process, security, trading, among others. In case of a retail investor, you can use blockchain ETFs to diversify your portfolio. Blockchain ETFs have already made their debut in the market, now along with Blockchain, Bitcoin ETFs have also come in the market niche bringing ample opportunities for the investors.

This article will serve as a guide to help you understand blockchain ETFs and invest in the same. But before we delve into knowing the investing basics, let us know a little more about blockchain technology.

What is Blockchain Technology?

Blockchain technology is a digital record of transactions that is replicated and distributed throughout the blockchain’s complete network of computer systems. 

Each block on the chain is composed of several transactions, and whenever a new transaction takes place on the blockchain, a record of that transaction is added to the ledger of every participant. This is what we refer to as the Distributed Ledger Technology or DLT – a decentralised database controlled by numerous members.

The transactions are accessible to all nodes but can’t be altered as they are encrypted and stored in an orderly way. Blockchain technology is revamping such transactions for future use.

Some corporations that employ blockchain technology are Microsoft(MSFT), Starbucks(SBUX), IBM, PayPal(PYPL) and more.

What are blockchain ETF funds?

As we all know, an ETF is an investment instrument or a product that has some underlying value. In the same manner, a blockchain ETF is an investment instrument that specializes in investing in blockchain stocks of companies involved in virtual currencies, blockchain,  or crypto trading activity. 

One interesting thing to note here is that a blockchain ETF doesn’t need to invest in companies dealing with cryptocurrencies such as ethereum or Bitcoin etf stock.

When a person buys a blockchain ETF, he/she is buying into the assets. This implies that as an investor they have the right to gain from the growth of the blockchain ETFs. Just like it happens if they owned stocks. Blockchain technology ETFs are traded in regular ETF markets just like stocks.

How the Top Blockchain ETFs Work?

The BLCN ETF is an ETF that is passively managed and aims at tracking how the Reality Shares Nasdaq Blockchain Economy Index works. This index is made up of firms active in research, development, support or use of blockchain technology ETF and related blockchain technology companies.

Each possible corporate stock that may be an acceptable candidate for inclusion in this index is assigned a “Blockchain Score” by the index methodology. 

This score builds on various criteria for how the firm contributes to the ecosystem, its blockchain product maturity and associated economic impact, investments and expenses in R&D activities, corporate results and innovations.

This factor-based technique guarantees that a blockchain development company’s potential and its business are more accurately measured for actual economic gains, renewed business possibilities and operating expertise. 

To eliminate the traditional approach blockchain has brought a new approach for startups. The top 50 to 100 businesses with the highest Blockchain Scores are eligible for inclusion in this index, and the same equities are duplicated in the BLCN ETF. Every six months, the index is rebalanced.

How To Invest In the Best Blockchain ETF?

Mentioned below are some of the ways on how to invest in blockchain technology:

• There are several crypto stocks to invest in such as bitcoin etf stock, or you can also buy cryptocurrency trust.
• You can purchase ETFs of the firms that invest in shares of firms exposed to blockchain ETF and blockchain crypto ETFs such as Reality Shares Nasdaq NextGen Economy ETF  and Amplify Transformational Data Sharing ETF.
• You can participate in crowdfunding a new cryptocurrency via an initial coin offering ICO.

Now as we know how to invest in blockchain technology, let’s move on to the next part of this article Blockchain ETFs vs Cryptocurrency ETFs.

Blockchain ETFs vs Cryptocurrency ETFs

Blockchain ETFs keep a track of the stock market prices of companies that have invested in blockchain technology stocks and because blockchain is a technology, it is not related to a particular product or company.

To simply put” Bitcoin needs blockchain but blockchain doesn’t need bitcoin”. Mentioned below are some points that throw light on the difference between Blockchain ETFs and Cryptocurrency ETFs

• While Cryptocurrency ETFs are not yet a reality, blockchain ETFs are already in the mainstream markets.
• While cryptocurrencies have been involved in a lot of controversies, blockchain technology is neither banned nor under scrutiny by regulatory agencies.

Best Blockchain ETFs 2021

The performance of blockchain ETFs are based upon several factors such as daily volume, profitability, dividend yield and more. Mentioned below is a blockchain ETF list that will help you decide the best blockchain stocks to buy.

Ending Thoughts

Blockchain technology is not only transforming the financial/banking selector, but it is paving the way for different industries and sectors like supply chain management, fashion industry, agriculture and food, customer service, and many more.

We hope that this article has helped you understand blockchain stocks and how to invest in cryptocurrency ETFs. After all, the two are the trendiest topics in the world of investment. Several blockchain app development agencies are being employed to reap the benefits of these new forms of investments.

If you are also looking forward to deploying blockchain development services, consult Appinventiv today, one of the top blockchain technology companies in USA !

The post Best Blockchain ETFs: How You Can Invest In the Backbone of Crypto? appeared first on Appinventiv.

 Almost a decade ago Satoshi Nakamoto, the popular name behind the bitcoin development, bitcoin white paper author, and creation and deployment of bitcoin’s original reference implementation described how blockchain technology could be utilized to resolve the problem of maintaining the order of transactions and to escape the double-spending problem, and privacy issues.

Some of the blockchain forecasts are interesting and intriguing at the same point, making the market turn heads toward this growing technology.

 According to a report by Grand View Research, Inc., the global blockchain technology market size is expected to reach USD 394.60 billion by 2028.

A survey on eight banks by Accenture Consulting shows that the potential savings on a cost base of $30 billion are more than $8 billion.

According to another blockchain statistics for business benefits of a blockchain shows that 23% of respondents cite value chain and new business models as the main reasons for blockchain adoption by industry. Another 23% claim that they would do so for a higher degree of security.

Benefits of blockchain have the attribute to provide KYC, security, anonymity, and data integrity without any third party organization while controlling transactions, and therefore it builds interesting research areas, especially from the perspective of technical challenges of blockchain and limitations.

Through our understanding of blockchain and its attributes, we present a bunch of key Blockchain Value Propositions and how it can complement the development of digital platforms and various blockchain industries.

Furthermore, when we look at blockchain beyond cryptocurrencies, then there are a total five fundamental propositions related to Blockchain development that should be treated as rules while making software, business models, markets, and governments on Blockchain.

The value propositions offered by Blockchain adoption, fabricate the establishments of a system of values of blockchain and qualities that could construct the outline for the coming time of the digital economy and Internet 2.0. The five regions that Blockchain has demonstrated to make value includes:

• A network built on integrity
• Distributed power
• Economy and investment model
• Digital security
• Privacy

Blockchain Making Way For Systematic Value

Network built on integrity

One of the values of blockchain is trust that doesn’t come from an external source but from the participating peers inside. This implies that trustworthiness, honesty, responsibility, and transparency of communications and exchanges are combined into the Blockchain’s decision rights and incentive structures, and the blockchain tasks are distributed among nodes, not vested in a single member. This in reality implies that acting without integrity is either outlandish or it costs excess of time, cash, and energy.

On the current version of our Internet (for example Internet 1.0), the vast majority of the data is flexible and brief, where the specific date and time of its publication isn’t critical to past or future data. On a blockchain, the reality of the present depends on the details of the past.

Bitcoin’s development across the blockchain network is for all time marked from the moment of its coinage. For a Bitcoin to be valid, it should reference its history and the historical backdrop of the Blockchain. The Blockchain should be therefore protected completely, guaranteeing network integrity through sharp code rather than through individuals.

Distributed power

Dispersed stages, for example, the Bitcoin Blockchain can empower new distributed models of wealth creation and new types of peer-to-peer human joint efforts that focus on humankind’s vexing and immovable social issues.

With the business benefits of blockchain, by moving forces towards citizens and offering them genuine chances for success and cooperation in the society, one could together work to assemble trust and confidence in the present institutions or even form new open and private establishments.

Volunteers (blockchain users) keep up with the records by keeping their duplicate of the blockchain records up-to-date and loaning spare processing capacity to mining power. Each exchange or activity is communicated across the network to be checked and approved. Nothing goes through a focal third-party or put away on a focal server.

Members, participants or miners in the Bitcoin network case, control their information, property, and level of investment. By distributing computing power, blockchain empowers circulated and collective human force.

Economy

According to Nguyen, Blockchain is relied upon to play a fundamental part in the sustainable development of the worldwide economy, carrying advantages to consumers, to the current financial framework and the entire society in general.

Investing in blockchain technology has become top blockchain trends because of its job as the database for cryptographic forms of money and digital exchanges.

It’s the improvement of trust, transparency, and productivity that has changed blockchain tech into an attractive investment prospect. Blockchain has applications in a wide scope of industries, where the organizations carrying out blockchain tech will acquire an upper hand over rivals.

All the more comprehensively, blockchain in different industries can likewise include investment in organizations that work explicitly with digital money, (for example, Square, crypto payment platform) and those that have invested resources into crypto (like MicroStrategy).

According to a research by Statista, the use of blockchain technology in the financial sector is expected to develop in the coming years, reaching a market size of U.S. $ 22.5 billion dollars by 2026.

Digital security

Blockchain networks include wellbeing and safety measures with no weak link. They provide secrecy and credibility of records, implying that a digital signature can’t be denied. Any individual who wants to take part in the blockchain should use cryptography. Any reckless conduct doesn’t jeopardize everyone, it just influences the individual who acted foolishly.

With the ever growing use of digital solutions in our regular day to day lives, innovative security will mean personal security. Today, hackers are everywhere to take advantage of the technology. Thus, with the safe design and transparency of a Blockchain like the Bitcoin, you can make transactions of value worth secure and protect personal information.

Blockchain creates systematic value which can be seen in digital certificates, which are another solution for our present digital security. They’re bits of code ensuring messages without the requirement for asymmetric cryptography, where clients pay a yearly charge for their certificates.

 With such security, entrepreneurs are understanding blockchain technology and making use of this  technology in their businesses.

Privacy

Privacy, due to its anonymity characteristic, is a fundamental attribute in the Blockchain environment. High integrity of exchanges and security, and protection of nodes are expected to prevent assaults and attempts to upset exchanges in Blockchain.

Today, numerous individuals are unaware of how much security they deal with consistently, on the web. We leave digital impressions and trails each day for tech giants and site owners to change over into detailed guides of our whereabouts. 

With the technology of blockchain and data privacy one holds substantially more responsibility and ownership over personal information and provides what’s needed in any social or economic trade. Also, whenever you decide to give information of significant worth, you can request something of significant worth in return. This is one of the reasons why individuals are opting for blockchain over traditional databases.

In a Blockchain app development agency, a distributed agreement network without a trusted party, all of the exchanges are transparent and reported to people in public. Hence, blockchain and data privacy with blockchain in different industries is kept up with the breaking of the progression of data. General society can see all exchanges, but without data linking the transaction to identities.

If you are interested to know more about fundamentals of blockchain then you can click on this link to read more.

Parting Thoughts

There is a promising and arising pattern towards blockchain adoption. Right now, Bitcoin’s adoption rate is about 1%, but with shortage and demand comes value appreciation. Thus, as the adoption develops, there is trust that Bitcoin’s worth will increase generously.

The goal of the systematic value is to examine the current status and make use of Blockchain technology in every field possible for better privacy and security. There are many challenges of blockchain and several solutions to those challenges and limitations are being presented or prepared. What we need is knowledge and the working of blockchain.

If you wish to include blockchain development services in your organization, then make sure you choose a good blockchain app development agency that has a blockchain expert. Appinventiv has a top blockchain app development services in USA, which provides consultation and expert solutions to its clients.

The post How Blockchain Creates Systematic Value? appeared first on Appinventiv.

The current generation is prone to digital currencies such as bitcoin, ripple’s XRP, ethereum, stable coin etc. Therefore, the year 2021 can be said as the year for decentralized finance (DeFi), especially for the blockchain sector. DeFi applications and DeFi platforms have ditched the traditional financial systems and paved the way for an all-new method of trading with digital currencies.

Whilst the rest of the planet had seized pandemic dread, Blockchain acquired a DeFi bug. Cryptocurrency lovers were angry with FOMO-ing for the liquidity of the mining industry, steady borrowing and protocol financing. In brief, DeFi trends dominated the discourse for much of the year, and in non-traditional financial institutions during COVID-19, notable development was witnessed.

In February 2021, the total volumes locked (TVL) crossed $1 billion. This is the dollar value for assets concluded in DeFi agreements and finished over $13 billion in financial years.

Despite witnessing such rapid DeFi growth, upcoming DeFi projects remain a very young industry with plenty of room for innovation. 

If this is true, then what DeFi google trends are worth keeping an eye on in 2021?

Let us explore some of the best DeFi projects 2021:

However, before we go on exploring, top DeFi Trends, let’s address the most basic question regarding DeFi:

What is DeFi?

Decentralized finance is in its simplest form makes financial goods available to everyone on a decentralized public blockchain network instead of through intermediaries like banks or brokers. In contrast to a bank or brokerage account, DeFi does not require an ID issued by the government, a social security number or evidence of address. Instead, DeFi mainly refers to a system that enables buyers, sellers, lenders, and borrowers to engage with peers or a middleman based on rigorous software rather than a transaction-facilitating corporation or fintech app development agency.

Is Defi Growing?

Decentralised finance is still in its early phase of growth. As of March 2021, DeFi contracts have a combined value of over $41 billion.  While DeFi’s overall amount may appear considerable, it must be noted as many DeFi coins do not offer enough liquidity or volume to trade in cryptocurrency marketplaces. In addition, there are infrastructure malfunctions and hacks in the DeFi platforms. The fast-changing DeFi applications also abound in scams. For this sort of legislation, DeFi’s transaction span is borderless. For example, who is guilty of a cross-border financial crime, of protocols and DeFi applications?

The DeFi regulation focuses on smart contracts. Besides the success of Bitcoin, DeFi is the best example of the theory of “code is law”, in which law is a collection of rules written down and enforced by unchanging code. The intelligent contract algorithm consists of the buildings and conditions of use required for conducting transactions among two parties. However, because of a broad number of circumstances, Defi platforms can fail.

For instance, what if a system crashes due to an erroneous input? Or if a compiler (in charge of building and executing the code) is erring. Who is responsible for these modifications? These and many other concerns must be dealt with before DeFi becomes a mainstream mass system.

Now that we know what is DeFi and why is it so popular, let us have a look at some of the latest trends in the DeFi world:

Trends of DeFi

Trend 1 –  Liquidity mining

The largest fad which evolved quickly was liquid mining, also known as yield farming. This incentive drives Crypto asset investors to secure a decentralised network for their currencies. Unfortunately, this supplies the required liquidity and inadvertently boots the protocol. Liquid mining is a DeFi trend that may never fade away. 

A recent example of liquidity mining is the Compound Finance Protocol, a DeFi application that lets any user withdraw assets or offer liquidity in one of their liquidity pools as long as they possess an ethereum wallet. The users earn rewards according to tp Compound’s basic principles. Last year, Compound launched its governance token named COMP and since then liquidity mining has become an unbeatable DeFi trend. Everyone who either buys or lends using the COMP token gets rewarded as per the new protocol.  This year with the development of better DeFi platforms automated production farmers such as yearn.finance liquid mining has been further revolutionized.

Trend 2 – Ethereum can be the next big thing

Ethereum is usually a part of conversations whenever decentralised funding and the latest DeFi trends 2022 are discussed. Ethereum best supported the DeFi in 2021 is anticipated to follow a similar path. The idea that DeFi is for everybody’s loyalty when it simply circulates prices from $5 to more than $30.

Cross-chain technology has become one of the newest forms of DeFi trend in 2021 because it allows transmission of information between different blockchain networks, making interoperability easier for the users. Matic, an Indian blockchain scalability platform also called ‘the Ethereum’s Internet of Blockchain’ is a vital effort to divide the DeFi sector’s load among several blockchains uniformly. It is a perfect example of cross-chain technology and the solution to some of Ethereum’s current issues – including high charges, poor user experience and less number of transactions per second (TPS). MATICseeks to build an ethereum-compatible decentralized blockchain multi-chain ecosystem and help traders trade better.

Trend 3 –  Stablecoins are the top DeFi trend

The stablecoin business is another industry in which DeFi emerges at a robust pace. Stablecoin has been added to 20 billion dollars in one year, and stablecoin supplies have risen above 26 billion dollars. With approximately 79 percent of market domination, Tether USDT is the most significant participant. The US dollar is still dominating in a stablecoin market, with Circle USDC being one of the other most prominent figures. However, it is forecast that fat-packed stablecoins might start eating market share as the industry matures and government stimulus programmes materialise.

Trend 4 – Monetizing the gaming industry

More than 2 billion people keep themselves engaged in gaming worldwide and spend around $159 billion every year. With more and more people dedicating hours to this form of entertainment, the blockchain gaming industry will witness huge DeFi growth.

Blockchain gaming is based on the simple concept of gamers completing certain tasks to mine the tokens. Now, when the industry will be monetized, DeFi protocols will be needed in place to ensure in-game transferability. Last year, BitSport, the crypto gaming platform created a way for crypto owners to sponsor game tournaments. Such tournaments and more gaming platforms are expected to rise this year as well and become one of the best DeFi projects for 2021. By monetizing the gaming industry, DeFi will certainly set a new and engaging trend for the traders.

Summing It Up

With the advances in security in blockchain, 2021 is without question going to be the most exemplary year of decentralised finances. By extending its blockchain community, DeFi secures its presence. In the light of the tendencies described above for the fledgling industry, 2022 might prove a more significant year. 

There are several reasons why DeFi fans and crypt lovers keep engaging themselves in the top DeFi trends 2022 and are eager to invest in the upcoming DeFi projects.

Are you prepared for such a change? If you think you are ready to imbibe the changes in your business ideas and make use of the blockchain app development technology to engage customers then you can refer to appinventiv, a trustworthy and reliable fintech app development company in USA. A financial services consulting that would help you expand your decentralized journey.

Frequently Asked Questions

1. Why is DeFi popular in 2021, 2022?

The pandemic paved the way for digital trade and cryptocurrencies to gain an edge in the market. The year 2021 witnessed DeFi trends that one could have only imagined. Liquidity Mining, Blockchain Gaming, Ethereum trading, and more kept the digital traders engaged. It has been estimated that these DeFi google trends will continue to witness the DeFi growth in 2021 as well as 2022. 

2. Is DeFi growing?

DeFi can still be said to be in its infancy and is still being developed by the fintech software developers. DeFi Applications and DeFi Platforms still need a lot of improvement to become more robust and reliable for the users.

The post What Are The Latest Trends in DeFi? appeared first on Appinventiv.

With such a growing population it is obvious that the food demand will increase significantly. To fulfill the food demand of the world population, the agriculture industry is making use of AI and taking up the path of other technologies to meet the demands through innovative production.

The agriculture sector is immense, that is why it has to face numerous challenges that infect the sustainability of the industry. Beginning from labor work to a competitive marketplace, each and every issue ought to be addressed, otherwise the ecosystem may fall apart.

Blockchain can assist the agricultural and food sector to deal and manage predictable dangers and maintain affordability throughout the ecosystem. Below are some facts that state the use of blockchain in agriculture and its forecast in the coming years.

According to Statistics, the global market value of blockchain in the food and agriculture market which was about 32.2 million U.S. dollars in 2017 is projected to grow to about 1.4 billion U.S. dollars by 2028.

The Reportlinker.com in the release of its report ‘Blockchain In Agriculture And Food Supply Chain Global Market Report 2021: COVID-19 Growth And Change’ states that the global blockchain in agriculture and food supply chain market is expected to grow from $128.87 million (2020) to $189.48 million in 2021 at a compound annual growth rate of 47%.

The same report also states the expected market reach to $886.18 million in 2025 at a CAGR of 47.1%.

As we know that every coin has two sides, the same way there are two sides of every topic or product.  The way the expanding difficulties in the agriculture sector are making it impossible to look after sustainability. In the same way, use of blockchain in agriculture can improve this situation for good. Let’s read below to know how blockchain has become a boon for the agriculture business. But, first let’s start with what Blockchain agriculture is?

What Is Blockchain Agriculture?

In a layman’s language, blockchain agriculture means the use of blockchain in the agricultural sector to improve the operating process and get profitable results. The use of blockchain in the agricultural sector ranges from having a sustainable business and reduction of waste, to informed consumer purchasing decisions, to having smooth future transactions with fraud elimination.

There is a new term that has surfaced in the marketplace, Smart Agriculture. Smart agriculture includes the utilization of natural resources and the decrease of environmental impact through the execution of ICTs (information and communication technologies), blockchain, and other modern technologies for gathering and analyzing data.

How Is Blockchain Used In Agriculture?

Traditional frameworks with core control are frequently vulnerable against data corruption, as the authority running the framework can be one-sided and look to accomplish certain outcomes by inputting wrong data. Such platforms are frequently liable to cyber-attacks. Entrepreneurs are shifting to blockchain and understanding the working behind it for security and ease of transactions. 

Let’s see the uses of blockchain in the agriculture:

Farm inventory management

Truth be told, many farming organizations aren’t prepared to utilize cutting edge technology to deal with their inventories. This is actually leading to wastage of the produce and the resources. Also the losses are borne by farmers. Thus, this is a huge burden for the farmers, as they don’t have the required tools to manage the issue.

The use of blockchain technology here can change that situation for great. Blockchain in inventory management can help farmers by monitoring the storage climate and inform you when produce will expire. In this way, you can take legitimate measures.

Enhancing agricultural supply chain efficiency

Another incredible use of blockchain technology in farming is the expanded productivity throughout the industry. Due to the absence of use of automation and innovation, the productivity of this industry isn’t sufficient. Generally, it’s more prominent for the small to mid-range farmers to not have an approach for costly technologies to increase the proficiency of the production.

The future of blockchain in the supply chain can be very handy here. Utilizing a blockchain ledger system, it can rapidly address all of the components and diminish the costing of the farming cycles and increase the yield’s overall efficiency. Some of the benefits of blockchain for in agriculture supply chain are listed below.

Modernization of farm management software (FMS)

Another benefit of blockchain in agriculture is the modernization of farm management software. The farm management software will become mainstream soon in reality. Be that as it may, this product actually utilizes the typical customer server model to work. Thus, they are yet not capable of offering their maximum yield as they could with blockchain.

Hence, utilizing blockchain, for this situation, can help take the FMS to another level. All the more, this software will have the security they need with blockchain’s protection. The farmers need not stress over cyber hacks anymore. 

IoT optimization security in agriculture

To monitor the farm produce, the agriculture industry requires IoT devices. These devices can also considerably offer security and safety to their equipment. Utilizing the machines, they can record the climate and the land state and likewise change it. All the more along these lines, a few gadgets can even gauge normal catastrophes from already. Some devices also forecast natural calamities.

But the problem is that these devices are vulnerable as in many cases the cloud services that they use to store the data is frail to cyber-attacks. Blockchain can offer assistance here with its strong security protocol. The advantages of blockchain in farming will defend these IoT gadgets and offer them a superior networking system to work with.

Providing fair pricing

It is true that many farming organizations don’t get a reasonable price that they deserve for their produce. In spite of the fact that the produce of crops is good, numerous wholesalers actually don’t offer the value they deserve.

The situation can change using blockchain. Using the blockchain-based marketplace, the farmers can offer their produce to the fair purchasers and can even reach more purchasers than they could previously. This will assist them in negotiating the value more reasonably and fairly. Along these lines, the farmers can get what they genuinely deserve.

Microloans for small to mid-sized farmers

Another incredible blockchain use case in agriculture is the alternative to get microloans. Small to average sized farmers need loans every now and then to maintain and run their business. Nonetheless, the loan policy in banks has high interest. Thus, the organizations are in an upsetting circumstance as the interest costs can burden them with more loans.

Therefore, utilizing blockchain technology can settle the issue for good. Blockchain can assist the farmers with getting microloans on the network from lenders all throughout the globe. With a limited quantity of loan, they can take up the burden of small interest costs, assisting them with maintaining and running the business for a long time.

With worldwide food systems such as sea-food, almost 40% of which is traded internationally, here information transparency and discernibility through technologies like blockchain are significant for conscious decision making and to work with trust among partners. To state the solution, we will discuss the role of blockchain in food security and future agriculture.

Role Of Blockchain Technology In Agriculture And Food Security

Gathering information

Blockchain technology can be utilized to solidify data on the nature of the seed, track how harvests develop and record the crop journey once it leaves the farm.

For instance in Canada, an online blockchain marketplace- Grain Discovery is an illustration of information being utilized by those engaged with the food framework to develop and market worldwide competitive crops.

The data could also upgrade transparency in supply chains by giving immutable records from creation to consumption. Such information can possibly work with data transfer through every progression of the supply network. Furthermore, if blockchains are applied with appropriate approval, it can forestall illegal and unethical production and circulation that undermines sustainability and food security.

Tracking pathways

At present, there is little proof supporting the case that blockchain and big data innovations are adding to worldwide food security. Despite the fact that the normal farm is projected to produce 4.1 million data points by 2050, up from 190,000 data points in 2014, expansions in worldwide food security have not been great.

But despite this, companies are doing their bit to provide a transparent process, as people are looking forward to understand and know where their food is coming from. Below is the data that shows the percentage of people that demand for information about food.

For instance, IBM and Walmart have collaborated to track produce from farm to fork. Makers and processors along the inventory network are needed to include data into IBM’s blockchain for food traceability and for the process to be totally transparent to consumers. Noticing this use of blockchain, the blockchain app development companies are coming forward to benefit the agri sector.

Data and food futures

Before blockchain and other data innovations can help address food security, various challenges should be addressed.

The execution of blockchains should be decentralized to incorporate small farmers and rural individuals. This will empower sustainable and fair food systems and permit buyers to settle on informed choices.

As blockchains place additional duty on the end users, difficulties like restricted digital proficiency among the world’s poor and infrastructure constraints may undermine genuine decentralization. Likewise, they should be coordinated into more extensive food security advancement strategies to make them sensitive to social and ecological values, critical to handling food insecurity among different groups.

The undiscovered capability of harnessing big data through a transparent and decentralized food distribution framework may uphold sustainable food creation and provide responsibility for food production.

Parting Thoughts

The blockchain agriculture and blockchain food supply chain can change the existing traditional processes. More so, now that we have known the potential of using blockchain in agriculture development, the marketplace for the farmers is full of potential with the fair share of market value and efficient production through technology. 

Blockchain offers limited data management capabilities and sometimes companies with blockchain development services are better off developing a comprehensive database than using a distributed ledger. But the excitement surrounding blockchain technology is growing day by day. 

There has been a continuous attempt to fully adopt blockchain technology by the blockchain development company in USA with a massive potential for the agrifood sector.

The post How Blockchain Benefits Agriculture And Food Industry In Future? appeared first on Appinventiv.

But have you ever wondered, who is the creator of those assets or where is the real origin of that digital property? The answer to these debriefs lies in Non fungible tokens.

It all started in 2017 when the first-ever Non-fungible token was released named Crypto Punks on the American Studio Larva Lab’s Ethereum Blockchain. It was a two-person team back then which consisted of John Watkinson and Matt Hall. In the same year, another project was released named Crypto Kitties that went viral immediately after its arrival. It’s said to generate an investment of a whopping $12.5 million.

In this article, we will dive into non-fungible tokens , what is NFT, how to start non fungible tokens, and how did it start along with its popularity among masses, how to create non fungible tokens, characteristics that make NFT different, its benefits, risks and the upcoming future.

What is NFT

Fungible assets or fungibility denotes an item or an asset that has the ability to trade or get exchanged with a similar type of asset or good, whereas non-fungible assets tokens are unique digital assets whose ownership can be tracked on on NFT blockchain development like Ethereum. 

Non-Fungible Tokens aka the NFTs are digital assets or a type of digital certificate for owning goods or an asset that represents a great variety of intangible and tangible items such as paintings, virtual real estate, postcards, videos, and so on. NFTs cannot be replicated or equated with an asset that is similar, because every non fungible tokens asset is unique on its own. You can read more about the development and cost of NFT marketplace here.

To make things more clear to you, let’s take an example of a game ticket. If you give someone a baseball game ticket, then obviously you would take the baseball game ticket. Right? If that someone returns you a movie ticket, will you accept it?

The answer: No, you will not, because a movie ticket will not be as equally valuable as a baseball game ticket. If we place this example in place of NFT, then the game ticket (which is an  NFT) cannot be replaced or traded with any ticket, as every baseball game ticket has its own unique identity.

The same is the case with NFT, where you cannot just exchange or trade NFT tokens with similar value tokens, as each token is different from one another and has its own uniqueness and rarity. 

Non-fungible Tokens Examples

Owning a digital collectible has its benefits over a physical collectible like a stamp or rare coin. Each NFT consists of distinguishable information that makes it unique from other NFTs and makes the verification of authenticity for a collectible easier.

Like, for an artist, it makes the circulation of fake collectibles useless because the original item can be easily traced back to its legal user. Also, in comparison to other NFT cryptocoins, you can’t exchange NFTs directly with anyone and the reason is the same – they’re all non-identical/dissimilar. For example, if you’ve got two NFCs on a single platform, they still won’t be the same despite being a part of the collection or having the same size and color. Let us see some examples of NFT Projects:

Blockchain Heroes– It is an original trading card series highlighting the similarities between personalities in the crypto and blockchain space.

Decentraland– In this game the players are allowed to buy the virtual world owned by the users. The owner of the virtual space can monetize their world with shops, advertising, etc.

Prospectors.io– It is a blockchain-based game, where the owned assets by the players are given to them in form of blockchain, and players earn NFT based on their gameplay.

Gods unchained– It is a digital collectible card game or online collectible card game, where the cards are in the form of NFTs that can be freely bought and sold.

CryptoKitties– It is a famous NFT game that includes breeding and collecting cats. These digital cats took NFTs to the mainstream with each token having distinctive ”cattributes”.

The History of NFT – How and Why Did it Start?

There are some arguments around the first appearance of NFTs. Colored coins are speculated to be the first NFTs to exist. Colored coins are depictions of real-world assets on the blockchain.

The mention of Colored Coins originated from a blog post in early 2012 by Yoni Assia, titled “bitcoin 2.X (aka Colored Bitcoin) — initial specs.” It is said that Colored Coins supported experimentation and laid the groundwork for NFTs.

Then came the trading of Rare Pepes on Ethereum and after this finally the first-ever create NFT Token was released named Crypto Punks.

Afterward, a company named Rare Bits emerged as a marketplace and exchange portal for NFTs and raised $6 million in investment. The ideology of NFTs made possible a collectible card game that’s known as Gamedex nowadays and raised more than $800,000 in the initial days itself. Presently, a digital artist in America named Beeple launched his work named “Every day. The First 5000 Days”, which got sold for $69 million (42329.453 ETH). It’s one of the first artworks with NFT to be listed in some of the most important auction houses. 

Additionally, in a recent deal, NBA and Dapper Labs launched the beta version of NBA TopShot Collectible and Tradable NFT-based apps in partnership. They’ve been working on this since 2018 and launched it in the first half of 2020. The collectible contains tokens with data and multimedia smashed together in the form of packs.

Reason Behind NFT’s Sudden Popularity

Throughout time, the NFTs are used across numerous industries and today they’re known commonly as Ethereum Tokens based on ERC-721. Several amazing features make NFTs popular these days:

•       The complete data of NFT is stored securely in Blockchain which means the tokens can never be removed, destroyed, or replicated no matter what.
•       The main source of value for NFTs is their scarcity. Although NFT developers can make an infinite number of tokens, they’re kept limited purposefully to maintain their value.
•       NFTs are entirely indivisible which means they can’t be divided like Bitcoins into smaller denominations.
•       With the capabilities of Blockchain, NFTs can be easily tracked back to their real owner and eradicates the need for third-party verification forever

*Fun Fact* Bitcoins are completely fungible and can be traded while maintaining a standard value even after the exchange. NFTs cannot be directly exchanged with anyone else unlike regular cryptocurrencies such as Monero, Ethereum, and Bitcoin.

Distant Non Fungible Tokens Characteristics – What Does it Include?

1. Non-Interoperable

As NFTs follow the standard ERC-721, they’re considered to be non-interoperable which means the information stored in them can’t be exchanged or used in any manner.

2. Rare

Presently, the total number of NFTs is very less in the world and they’re very scarce. This not only makes them rare but also makes their value high. In simple terms, the lesser the number of NFs, the pricier they’ll be.

3. Indestructible

The NFTs are stored and managed through Blockchain that results in a greater level of security for them. This means they can never be destroyed or removed at any cost.

4. Indivisible

You can’t send a portion of NFT cryptocoins to anyone (unlike other cryptocurrencies) because they’re non-fungible and don’t have a defined value. For instance, one bitcoin will possess the same value after transfer but NFT won’t.

5. Unique

Resonating with real artwork, NFTs use blockchain to stay apart from the crowd and determine the authenticity of a state of art. It also allows you to distinguish original items from their replicated copies.

The Working Methodology of NFTs

NFTs are unique crypto tokens that are managed on a blockchain. Thus, blockchain acts as the decentralized ledger that traces the ownership and transaction history of each NFT, which has a code and a unique ID, and other metadata that no other token can duplicate. 

How do non fungible tokens work? To answer this, let’s read below:

The process of creating NFTs can be done through contract-enabled blockchains with the help of appropriate tools and support. Ethereum was one of the first widely used EOS, NEO, and now it also includes NFT standards. The tokens along with their smart contracts allow adding detailed information such as the owner’s identity and so on. 

This process provides NFTs the attributes of scarcity and royalties that make it attractive when coupled with digital media:

Scarcity

When we talk about scarcity, we mean that the owner gets to decide the scarcity of their assets. For example, if we take an example of a ticket to any sporting event or a concert, then there the owner decides how many tickets to be sold. Same way in NFT token market, the creator can decide how many replicas should be there. So these replicas are there with a slight difference to each one of them.

In another example of how to create non fungible tokens, the owner can create NFT token only one, making it a special rare collectible. In any case, each of the NFT will have its own unique identity, such as a bar code on every cloth or ticket that looks similar to each other but is uniquely different.

Royalties

NFTs are coded with software code (called smart contracts) that governs the prospects such as verifying the ownership and managing the transferability of the NFTs. Also, NFTs can get programmed beyond the basics of ownership and transferability like any software application that incorporates a variety of applications and functionality (which also involves the linking of NFT to other digital assets).

For example, a smart contract could be created in such a way that some NFTs automatically allocate a share of the amount paid for any sale of the NFT, that is pay the royalties to the original owner.

When somebody creates an NFT, they are composing the smart agreement code that administers the Non fungible tokens characteristics, which are added to the blockchain where the NFT is managed. Numerous blockchains can be used to handle NFTs, including Ethereum (with its established ERC-721 and ERC-1155 smart contract principles), Flowchain, and Wax, all of which make use of similar processes. Prominently, certain NFT marketplaces function with certain blockchains, thus the choice of blockchain to be used for NFT can have real implications for the seller, if not taken proper decisions.

Non-fungible Tokens Use Cases Across Multiple Industries

1. Gaming

Majority of the games have their virtual currency within their ecosystem that helps users make their progress easier. With that said, accounts with numerous purchased commodities have a great demand in an ever-expanding unregulated market. The different uses of NFTs will allow players to easily trade in-game collectibles with proper validation and security.

2. Digital Assets

For digital assets like house plans, mock-ups, themes, and domains, NFTs are certainly a perfect match. Moreover, digital real estate in games like Decentral Land is getting popular these days. They allow players to purchase and develop a set of spaces in a virtual world. The addition of NFT can make sure original creators can be traced back to these items. 

3. Identity Theft

The things that represent identity and can be digitized such as medical records and academic qualifications can make use of NFTs to prevent identity theft. Furthermore, the importance of non-fungible tokens help can be noticed with digital artists able to use it to convert their artworks and establish unique copyright for them. It also helps in separating counterfeits from the original.

4. Digital Collectibles

It’s a no-brainer that NFTs are rare and they find their major use in collectibles and art. With the addition of this token, the authenticity and ownership of a collectible or artwork can be easily verified. This also allows an artist to prevent their work from being misappropriated or pirated. NFT has already started to be used in cards and merchandise.

5. Identification and Certification

NFTs contain a unique set of information about an asset or a good programmed into them. This makes them a perfect match for issuing certificates, identities, qualifications, and licenses. The identification or certification can be issued directly through the blockchain as an NFT to make it traceable back to the source.

When the concepts of NFT are clear, we can clearly see the benefits of a blockchain of smart contracts that become a potent force for change.

Non-fungible Tokens Benefits

Ownership Rights

Advantages of non-fungible tokens can be utilized to address something extraordinary, both in the digital world and in reality. This has been utilized for collectibles and gaming in the digital world (demonstrating someone claims a particular CryptoKitty or item), yet it could similarly be applied to unique items in the real world – like houses, vehicles, craftsmanship, or potentially even personalities. It could likewise be utilized to allow specific access, giving access to Airbnb at specific occasions or for air travel tickets.

Customization Approach

Advantages of Non-fungible tokens are safe unlike other tokens that can’t be. Smart agreements/contracts and fungible tokens could possibly enact a portion of the functions of non-fungible tokens. However, in the non-fungible token market, all the information is held by the token itself. 

The token can have additional information allocated to it which could incorporate standard options like the name and the ownership, but could be extended to areas like the history of the token and related data – an image of the house the token represents, the previous owners of a vehicle the token represents, or the count of character skins in a game with a similar model type the token represents.

Secure Trade

Generally, importance of non-fungible tokens can be seen with transferring the ownership of physical or digital items is at risk of fraud, and as such is either difficult in its execution or sometimes it is basically not permitted. With the security of blockchain and the uniqueness of non-fungible tokens, exchanging anything addressed by the token would be a much less complex and more effective process. As a token, it might actually permit the responsibility of ownership of items to be transferred across platforms or even be interoperable across various services like games or NFT marketplaces.

There is a mixed bag of characteristics when it comes to the characteristics of NFT. With every benefit there are risks that have to be taken into account to prove it.

Risks Associated With NFT

Valuations 

If you are thinking of how to buy NFT? Then you should know that purchasing an NFT, similar to any collectible is a risky bet with its value going up. Unlike Blockchain asset tokenization trading cards or buying a real asset, NFTs are an up-and-coming market so there is no guarantee that there is going to be a similar kind of demand on digital assets. 

If there is no demand for the NFT you buy, you could end up paying an enormous sum for something that decreases in value or is simply un-sellable. You could also make your own NFT however there is no assurance of a buyer which could lead you to waste your time and money. 

Storage

Sales in NFT are recorded through blockchain technology, which demonstrates ownership. The real NFTs are made and stored through marketplaces and platforms like Open Sea or Rarible. 

If by any chance these platforms get shut, there will be no assurance that you would have the option to access the work. This makes it less secure than having a physical art hanging on a wall or gaming tickets or trading cards that won’t just simply vanish. 

Regulation

There is no regulation of NFTs so there is a lot of trust required. You need to believe that the NFT you are purchasing is a unique piece of art or work and hasn’t been replicated from somewhere else or you could face a copyright issue. 

Also, if regulators and administrators get concerned regarding this thriving business, then there could be crackdowns on platforms and limitations on how much collectors can contribute. This could lead to decreasing the NFT token market value.

Hot Potato Effect

NFT games can have a ”hot potato” effect. Meaning that the players buy an asset to sell it for a profit, but if the market collapses, it can lead to a huge loss.

For example, you have a gaming sword and you are longing to sell it for a higher price than it was previously. Now the thing is, as long as someone is willing to buy, you will make a profit, but if there is no one to purchase the non fungible asset or if the market collapses, then you are at loss.

Future of NFTs

Whatever the risks, the future looks promising for NFTs as the total market for them crossed a whopping $100 million by the end of July 2020. Experts in the crypto industry even speculate that 40% of new crypto users will use NFTs as an entry point.

With the decentralized finance industry surpassing $4 billion in value, it is evident that the NFT space is set to grow exponentially in the days to come.

FAQ’s Regarding NFT

O1. What is NFT crypto?

Ans. Non-Fungible Tokens aka the NFTs are digital assets or a type of digital certificate for owning goods or an asset that represents a great variety of intangible and tangible items such as paintings, virtual real estate, postcards, videos, and so on.

Q2. Where to buy NFT?

Ans. You can shop for them online through various marketplaces. OpenSea is a big one. Think of it as an online gallery where you can browse digital art, trading cards and other collectibles.

Q3. How to invest in NFT?

Ans. If you’re interested in investing in NFT, then you’ll need a cryptocurrency like Ethereum (ETH) or a Bitcoin. Once the cryptocurrency is in your wallet, from there on you can search sites like Rarible or SuperRare to get or buy the best digital artwork.

Q4. What is an NFT art?

Ans. NFT art is any type of digital file such as an artwork, an article, music or a meme.

The Takeaway

You may have already figured out that it’s still in its early stage of development. Therefore, you can easily expect numerous cutting-edge platforms based on NFTs in the coming years. 

Talking about the present, it’s transitioning from Crypto Kitties and gaming to digital identity, painting, and other non fungible tokens use cases. This means that the market is still raw in terms of experimentation. For a new-age entrepreneur, this would mean a sea-full of opportunities to enter and rule the space blockchain development services sector. We are here to help. Share your NFT-based project idea with us.

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Know Your Customer or KYC processes are the backbones of a financial institution’s anti-money laundering efforts. According to current estimates, the amount of KYC spending rose to up to $1.2 Billion in 2020 on a global level. 

With a whopping amount as this being spent on making KYC processes better, it is easy to assume that the process would be unhackable and issues-free. But inspite of the importance of the process, KYC continues to operate inefficiently. Clenched by labor-intensive and time-consuming tasks, the high scope of effort duplication, and the risk of error, it is estimated that 80% of KYC efforts go on gathering information and processing while only 20% of efforts are assessing and monitoring focused. 

While the current KYC process is failing to serve its purpose on the financial institution front, the tiresome, long, and repetitive process is creating an annoying experience for customers. 

A hopeful respite to the situation comes from the fact that several financial institutions and service providers are trying to solve the issues by the way of incorporating new-gen technologies like cognitive technologies and AI. 

In this article, we are going to delve into a technology that we believe carries the key to eliminating efficiencies and duplication in KYC processes – Blockchain. 

In order to truly understand the changes that Blcockahin can bring to the counterproductive KYC process, it is important to understand the problem areas of the present system. The problems will help us understand how blockchain technology for KYC is becoming a necessity.

The Lags in Centralized KYC Systems 

Every bank or financial service provider comes with its individual set of specifications with no standardization. This often results in users performing the KYC process with every bank and provider they use. Moreover, a tight siloed system like this limits FIs from tracking consumers’ expenses on other platforms – leading to every institution having their specific set of incomplete data. 

This centralization of data in silos combines to cause an inefficient KYC process. One that creates issues like:

1. Misidentification of fraudulent data 
2. The inability of tracking customers 
3. Customers entering fake data 
4. Delayed processing time

The result of these challenges is spending numbers that we mentioned earlier and a constant rise in money laundering instances. 

As a way of changing the situation, the KYC process is gradually being shifted to Blockchain. Let’s deep dive into the process of using Blockchain for KYC verification and the benefits that the movement offers to the fintech sector. 

The Blockchain KYC Process 

The process of using Blockchain for KYC happens through multiple stages in a Distributed Ledger Technology. 

Let us give you a high-level understanding of the steps of how can Blockchain help KYC. 

Step 1: The user builds a profile on the KYC DLT system 

Financial Institution (FI) deploys a Blockchain-based KYC platform which the user completes as a one-time setup using their identity documents. Once uploaded, the data become accessible to the FI1 for verification purpose. 

There are multiple options when it comes to storing the users’ data:

• A centralized, encrypted server
• On F1s private server 
• DLT platform. 

Step 2: User performs transactions with FI1

When the user performs a transaction with FI1, they give them the right to access the users’ profile. The FI1 then verifies the KYC data and saves a copy of the data on their server. Next, they upload a ‘Hash function’ on the DLT platform. 

Finally, FI1 transfers KYC digital copies to the user’s profile embedded with a Hash Function which matches the Hash Function uploaded on the DLT platform. 

Now, if the KYC data is altered, the Hash Function of the KYC data won’t match the one posted on the DLT platform alerting the other financial institutions on the blockchain of such change. 

Step 3: User performs a transaction with FI2

When FI2 asks the user to perform KYC, the user grants access to their user profile to FI2. FI1 then reviews the KYC data (and its Hash Function) with the Hash function uploaded by FI1. If the two matches, FI2 would know that the KYC is the same as the one received by FI1. 

In case the Hash Functions don’t match, FI2 would have to manually validate KYC documents. 

But what happens when the user obtains a new passport or driver’s license and their original document in DLT user profile changes? 

In such cases, financial institutes leverage smart contracts for automatically updating their systems when the user provides new documents. Here too, the user submits the new document to F1 who then broadcasts the change across the blockchain (through the new Hash Function) which then becomes accessible to other FI participants. 

The benefit of a Blockchain solution for KYC can be seen in:

• Data Quality: all data alterations are tracked and monitored in real-time
• Lowered turnaround time: through KYC Blockchain software solutions, FIs get direct access to the data which saves data gathering & processing time
• Reduced manual labor: KYC on Blockchain eliminates paperwork from the process. 

The benefits of KYC Blockchain implementation cannot be limited to these points. There are a number of sector benefits that the process of KYC using Blockchain offers. 

Benefits of Blockchain in KYC/AML Process

The use cases of the decentralized technology in KYC technology is not just a Blockchain in Fintech offering. There are a number of sectors that are partnering with a Blockchain development company to explore the application. 

Distributed data collection 

The introduction of blockchain in KYC brings data on a decentralized network which can be accessed by parties after permission has been given to them. Moreover, the system offers efficient data security since the data can only be accessed after permission has been given by the users, thus eliminating instances of unauthorized access. 

Better operational efficiency

The abilities like an unhackable digital process and sharing user information on a permissioned network can massively lower the effort and time needed in the early stages of KYC. This, in turn, expedites the customer onboarding time and lowers the regulatory and compliance expenses. 

Validation of information accuracy 

KYC Blockchain systems enable transparency and immutability that, in turn, allows financial institutions to validate the trustworthiness of data present in the DLT platform. The decentralized KYC process acts as a streamlined way for gaining secure and swift access to up-to-date user data. This lowers the labor-intensive efforts that an institution puts behind gathering information. 

Real-time updated user data 

Every time a KYC transaction is performed at a financial institution, the information is shared within a distributed ledger. This Blockchain technology KYC systems enable other participating institutions to access real-time updated information with a guarantee that every time there’s a new addition in the documents or there are any modifications, they’ll be notified. 

Is Blockchain Development Solutions the Answer to KYC Issues?

Gathering information and processing it takes up a great amount of cost, time, and effort in the KYC process leaving very few resources available for monitoring and assessing user behavior for anomalies. By offering speedy access to up-to-date data, blockchain KYC solutions can lower the time needed for the laborious tasks, which, in turn, can be employed to find solutions to more complex KYC challenges. 

However, blockchain cannot solve all the issues faced by KYC. After the data is acquired, financial institutions still have to validate the information. For this, AI and cognitive processing-like technologies have to be employed for greater efficiencies. 

In its present state, blockchain when used in combination with other technologies can showcase high potential to help institutions lower the cost and time linked with the KYC process. 

If you want to explore this side of Blockchain development services or are seeking to validate your decentralized KYC-based idea, get in touch with us – one of the leading blockchain development companies in USA.

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