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Cutting out the middleman example6/24/2023 In logistics, blockchain could simplify the process of bank guarantees and letters of credit. “Blockchain can be used to set a blockchain-technology tracking system to trace the origin of the drugs and decrease counterfeits,” Dr. In the pharmaceutical sector, counterfeit medicines account for approximately 1 percent of sales in developed countries and between 10 percent to 70 percent in developing countries. That fact could be picked up from a block shared with an insurance company, which would say whether the procedure is covered and what additional information is needed.īlockchain also could “increase the interaction between the patients and the doctors by providing the infrastructure on which a pervasive network of interconnected wearable devices will exchange rich data outcomes for real-time diagnostic and prevention,” says Paolo Tasca, executive director of the UCL Centre for Blockchain Technologies at the University College London. A doctor could post information about a patient’s visit and procedure. They are using it to meet “know your customer” requirements and to create a single record of data within the bank to remove the need for reconciliations when summarizing items between ledgers.įor insurance, blockchain could streamline the cumbersome, error-prone processing of claims. ![]() Banks are looking at blockchain to streamline settlement processes, improving margins by cutting out middlemen. The financial services sector, an early adopter, is using blockchain to eliminate error-prone back-office services. But if the data is decentralized, it’s much more secure and it’s much easier for the parties to create something rather than try to create an alliance and define a common data model.” “And, if there’s a centralized database, it can and will be hacked. Blockchain is a good solution when there is a need for unchangeable, verifiable and shared facts.”įor example, different business players may need to have common information, “but it’s difficult for them to form an alliance because that’s complex and takes a long time,” Mr. That opens up whole new business opportunities. What we will see is people saying, ‘I can make a guarantee about this data’ to a regulator or a customer. “It’s not going to replace relational databases. “We see blockchain as a complementary technology,” Mr. By running business software on top of the blockchain, companies will be able to automate transactions and enable new business models without designing or building a separate system for them. And the distributed aspect made it difficult to hack-safety in numbers.īut blockchain has taken on a life of its own separate from the cryptocurrency. The system ensured that Bitcoin was a real possibility. The smallest change in the data would result in a vastly different hashed value for that block. Blockchain uses functions that “hash” the data in a block to come up with a unique digital fingerprint. “It’s purely a data structure, which allows us to maintain the integrity of the data,” explains James Bowkett, principal consultant at Excelian, Luxoft’s financial-services technology arm.īlockchain was first proposed in the original white paper outlining Bitcoin as a way to ensure the integrity of Bitcoin mining. The design makes it near impossible to tamper with data and means that everybody can trust the information in the chain. ![]() If somebody tries to cheat, the other multiple copies won’t match up and everybody will be aware immediately. It has two important characteristics: it decentralizes data so everybody has the same copy and second, each block is built upon another so that no block be changed after the fact. It is difficult to hack, it cuts out middlemen, streamlines processes and establishes trust. ![]() Blockchain addresses several major business concerns: cybersecurity, cost-cutting and due diligence.
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