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How BTC is conquering the business world

Cryptocurrencies are used in many industries and there are now even sites which offer coupons - here is an updated list. The so-called blockchain was once invented for the cryptocurrency Bitcoin and was supposed to make classic banks superfluous as an all-encompassing tool.

In the meantime, the exact opposite is true and the financial world and the modern business world have discovered blockchain technology for themselves and are experimenting with it. In the meantime, a wide variety of industries here are betting on the security aspects of decentralized blockchain technology and experimenting with it.

Daimler launches pilot project

Bitcoin and the blockchainThe initial idea behind Bitcoin and the blockchain involved introducing a currency that is not managed via a central administration (banks or states) but is decentralized via the individual participants in the network. For this purpose, the so-called blockchain was introduced, which is a kind of openly accessible transaction book in which every single Bitcoin transaction is listed. In so-called Bitcoin mining, users make their computing power available to the blockchain and, with the help of complicated algorithms, calculations are carried out here that then confirm transactions. Since this transaction network is publicly accessible, manipulation and changes by individual participants are virtually impossible. This is also referred to as an extremely secure open source network. With the help of the blockchain, it would be possible to automatically penalize payment defaults of a leased truck by the customer.

This is precisely the technology that major DAX companies are now taking advantage of. For example, carmaker Daimler used blockchain technology for a 100 million euro promissory note loan. In this way, it is possible to exploit completely different options in addition to the exchange of contract terms and the transmission of payment flows via them. With the help of the blockchain, it would be possible to automatically penalize payment defaults of a leased truck by the customer. In this case, the blockchain would slow down the truck or completely prevent it from driving on. A corresponding procedure, i.e. remote access to networked vehicles, would of course also be possible without blockchain. The special feature here is that the payment stream and the service provision are directly merged, so to speak.

Energy sector and insurance industry could also benefit

This principle could now also be adapted to modern energy production. Anyone who operates a solar plant in an extremely sunny area and generates more solar power than they can consume themselves could sell it to their neighbors. The blockchain would do this automatically and remunerate them.

In the case of LBBW's promissory note loan, loan terms were exchanged via the blockchain. Daimler, the Landesbank and the district savings banks Esslingen Nürtingen, Ludwigsburg and Ostalb participated in the network. Normally, copies of ID cards have to be sent for such contracts, but by using the Blockchain, this was no longer necessary. In practice, however, due to additional security concerns, the contracts were also concluded in parallel to the blockchain in the traditional way. Regulatory authorities stipulate accordingly, as the sole use of the Blockchain would not be recognized in this case. This was a pilot project, so to speak. In the course of the project, the processing time for a corresponding promissory note loan was reduced from ten weeks to just under two weeks. Or, to put it another way, if blockchain technology were to be used in financial processes in general, they would become simpler and more efficient. Banks and financial service providers see enormous potential here.

Now, the first insurance companies are following suit and also launching a pilot project, which aims to enable data exchange between reinsurers and primary insurers.

US service provider relies on blockchain technology-based transaction network

In the U.S., service provider Ripple offers U.S. banks to process payments with other institutions via blockchain technology. This saves time and money, especially for foreign transfers. This is because money transfers between banks are usually processed via their accounts at the central bank. This ensures that the funds for the transaction are actually available. Things get even more complex when payments in foreign currencies flow to foreign banks. For a transfer from the U.S. to Europe, for example, small companies must involve larger commercial banks in addition to the central bank. It goes without saying that each of these intervening entities charges fees. Participants in the Ripple network are connected to a network based on blockchain technology, through which all parties can view and verify each transaction. Thus, the process, which usually takes several days, takes only a few seconds. Fees can be reduced from around $500 per transfer to around $200.
Blockchain network too slow for efficient use in modern business?

Huge amounts of data need to be processed

blockchainHere's how Ripple adopts the principles of the Bitcoin network: In the Bitcoin network, a payment order flows across the blockchain. If this transaction is visible in the blockchain, Ripple knows that candidate X sends Bitcoins to candidate Z. The payment can no longer be cancelled. The payment can no longer be cancelled. The transaction can be viewed by any computer that participates in the Ripple network and has the software installed. At the same time, it can be automatically checked whether the sender has sufficient credit at all. Finally, all previous transactions are also publicly viewable and cannot be manipulated. This verification process sometimes takes several hours with Bitcoin and is relatively time-consuming.

This is again the huge disadvantage of an open system that anyone can view. Therefore, it can be assumed that not the classic blockchain will prevail in the modern business world and in banking, but smaller networks like Ripple's, which is based on blockchain technology! These will then be used by banks and large companies as standard in the future. But private customers who regularly carry out money transfers could also benefit from the introduction of Blockchain-based networks in the financial sector. In its money transfer comparison, the comparison portal Qomparo presents the most important current options for transferring money abroad. Both the transaction time and the fees incurred could be significantly reduced through the use of blockchain technology.