Cryptocurrencies, asset tokens, metaverse: who would have imagined living in such a fertile era of technology innovations impacting the way we do business, invest, and relate to each other? What many people don’t know is that they have one big world in common: the blockchain.
The blockchain, as it is also known, enabled the emergence of bitcoin in 2008 and thousands of digital currencies created since then and is the technological basis for the most profound monetary and financial transformations.
We can define the blockchain as a digital ecosystem composed of countless computers with very high capabilities to process various transactions, from buying cryptocurrency to investing in tokenized stocks.
The blockchain network is naturally becoming part of the technological landscape, entering the radar of development projects of companies, banks and governments, but to what extent will it impact the financial market in the future?
BLOCKBR, a web 3.0 native company, talks about the importance of blockchain for the financial system and what paths it will point to for investment businesses!
WHAT IS BLOCKCHAIN
Blockchain is a distributed database – there is no external bank or government control – in a huge digital environment by an immeasurable amount of computers capable of processing countless transactions at very high speed.
Every computer is a validator of the network and everyone, without exception and at the same time, must attest to the authenticity of every transaction that takes place, be it the creation of new units of the network’s native cryptocurrency to trading in it and asset tokens.
Therefore, blockchain is the technology used by companies and individuals who want to offer crypto-assets and others on the other side who want to acquire or invest in goods and rights through them.
It is important to remember that there is not just one blockchain; they emerge as new digital currencies are created and the technology proves to be more versatile and efficient in inducing various types of business.
HOW BLOCKCHAIN WORKS
Let’s take as an example the purchase of tokens of a coffee crop that are offered by an agribusiness company on the ABC blockchain.
THE VALIDATION OF THE TRANSACTION
Once the buyer or investor requests the transaction on the token platform, the data will be validated by the entire network – the multitude of computers – and will be approved only if everyone agrees.
Basically, it is to check if the investor has the required balance of cryptocurrencies, like a bank terminal does when you want to make a withdrawal. The balance of coins is transferred to tokens is released to the offerer and the balance of tokens is credited to the buyer’s digital wallet.
All data will be recorded in a blockchain transaction block.
THE DATA BLOCK
Each transaction performed on the blockchain receives a completely unique ID and is entered into a block of information on the network.
This identification is composed of its own identification (the hash) and the hashes of the previous and subsequent transactions, so that it creates achain of accounting facts that cannot be changed or cancelled – a broken sale will need a transaction that represents the reversal.
IS IT POSSIBLE TO FRAUD A BLOCKCHAIN TRANSACTION?
Not.
Each computer maintains the final version of the transactions with the unique identification, so that if one of them intends to fraud, all the others must validate, which will not be possible because their versions will conflict with the malicious point.
This security is made possible by the concept of decentralization – no one holds the central power to validate, as in a client-server system in a bank.
Moreover, no financial institution or government controls the blockchain, which allows transactions to flow directly between the parties’ computers (peer-to-peer)
How is the crypto and tokenization market outside of Brazil!
WHY IS BLOCKCHAIN IMPORTANT FOR FINANCIAL TRANSACTIONS?
Blockchain adds to financial transactions some benefits that are fundamental for today’s business, especially security and transparency, two values that are very important in times of business virtualization.
BLOCKCHAIN SECURITY
When it comes to security policies and protocols, they are the best in the market – which is why banks and financial institutions are becoming increasingly interested in implementing blockchain in their processes and reducing the risks of cyber intrusions.
Encryption and the way data is structured internally make a successful cyber-attack virtually impossible.
Within the network, the validation and block generation system performs the task of ensuring data security, since a malicious validator needs to obtain the consensus of the entire network, which would not be possible.
BLOCKCHAIN TRANSPARENCY
All transactions performed are stored in the blocks and recorded in a decentralized, digital ledger. Each validator in the network has a copy and they are all identical, which provides the necessary transparency and strengthens the security of the information.
WHAT ARE THE ADVANTAGES OF BLOCKCHAIN IN THE FINANCIAL MARKET
MORE AGILITY
The processing speed of the supercomputers gives great agility to analyze and approve the transactions, because all the points work to validate, only one will succeed, and the result is shared among the others.
In addition, transactions are made directly between investors and companies through their digital wallets, without intermediaries, which brings us to the next benefit of blockchain.
MORE AVAILABILITY
One of the biggest challenges of traditional financial products these days is the restricted hours for making investments and some financial transactions. After all, people want the convenience of doing business at any time and without depending on financial advisors.
The blockchain, on the other hand, runs uninterrupted.
Therefore, an offeror of cryptocurrencies or tokens can close deals in the early hours of the morning and without having to perform, because the entire functioning of the network is electronic and without human interference.
MORE OPPORTUNITIES
This is, without a doubt, the greatest benefit of the blockchain: being able to offer asset tokens and cryptocurrencies in a fractionated manner, in much smaller pieces and with more accessible values.
This helps to attract a large portion of the population that are small investors or do not have the profile for some applications, such as gold mutual funds. On the other hand, with the offerings of gold reserve tokens, the business opportunities grow!
WHAT TO EXPECT FROM THE FUTURE OF BLOCKCHAIN IN THE FINANCIAL MARKET
The popularization of blockchain-based financial transactions, especially tokenization of assets is a road with no turning back.
There are many benefits, and they are directly related to people’s expectations of new technology in their daily lives – a relationship with investments that is more agile, more secure, and that can be made any day and at any time.
Another positive aspect of blockchain is the growing interest of companies in using the technology in production and logistics chains – a more recent and still little known form of use, but one that has considerable potential for expansion.
BLOCKBR Digital Assets
is a web 3.0 native fintech that brings together technological innovation and digital knowledge to transform physical assets into digital assets, in the process of tokenizing assets.
The supply of physical assets and tokenized financial assets, both current and new, is democratic and decentralized, which makes the way of investing safe, simpler and more efficient.
We enable, structure, issue and offer tokens on our platform and beyond. Be aware that tokens depend on feasibility and regulatory factors.
Do you want to tokenize your business or part of it? Do you have a business solution and does it make sense to issue your own token ?
