Blockchain technology continues to evolve and spread into the business, financial, energy and medical sectors. Blockchain transactions offer privacy, convenience, speed and security. A universal database, a unique structure of fragments that cannot be tampered with – that’s blockchain. Not only does the content of the blocks remain unchanged, but it is also publicly available, so a potential investor, a journalist, can view the fragments.
Cryptocurrency
Ranked tokens Bitcoin, Litecoin, Ethereum, Dogecoin and Tether allow for instant transfer of funds. The process of sending an asset between wallets does not involve banking institutions, so the parties remain anonymous. Blockchain smart contracts and tokens are directly linked, as cryptocurrency acts as an irreplaceable valuable resource.
Transaction functionality without intermediaries is appearing in online shops, markets and virtual goods sites. Online casino creators are also working to enable customers to deposit money in cryptocurrency. The list of supported tokens is expanding and this payment method is becoming available in the app, on a fixed or mobile version of the site. For more information on crypto casinos, visit the Casino Zonder website https://onlinecasinozonder.com/crypto-casinos/.
Financial products
Decentralised exchanges are built on blockchains that are accessible to every visitor and customer of the platform. Such resources are built on the principle of smart contracts, so the exchange is controlled by the audience when the administration remains idle. The customer connects a blockchain wallet, maintaining anonymity, and then trades on the platform with other participants. With a decentralised exchange, the user has the privilege of trading crypto without intermediaries, as well as conducting transactions without fees.
Platforms that use decentralised lending technology are emerging. This, again, opens up access to the content of the fragments for each visitor. Loan repayments are managed by smart contracts, so full automation of the process is achieved. No verification is required to receive a loan, but a designated number of tokens must be sent as collateral. Loans can be received in both cryptocurrency and fiat money.
Loans in blockchain gained traction when non-exchangeable tokens began to be offered as collateral. Since 2021, ideas and actual products are emerging so that users can provide NFT as collateral. However, the liquidity of these tokens as well as their uncertain value remains an issue. Tokenisation of NFTs is expected in order to determine their value and then use them as collateral.
Smart contracts
The blockchain smart contract is becoming an efficient technology for financial transactions between parties. The contracts are integrated into a decentralised network, and are created using Vyper, LL, Solidity programming languages.
Additional features of smart contracts:
- Conditions. The features of contract performance are marked programmatically, so they are used in an unmistakable way.
- Registry. Access to information on smart transactions is open to everyone.
- Execution. The written algorithm is executed as the blockchain checks the execution status of the contract.
- Anonymity. Smart contracts are distinguished by their degree of confidentiality: open, hidden, partially hidden.
The introduction of smart contracts has simplified financial operations and achieved full automation. Contracts do not require the involvement of an intermediary, which reduces transaction costs. In addition, smart contracts have eliminated the possibility of error due to the incompetence of one of the parties or the intermediary.
Financial audit
Customer due diligence or financial audits are conducted selectively. This is related to the model of crypto-institutions and the approach to lending. The originators intend to achieve mandatory credit scoring to confirm the stability of the potential borrower’s identity. Problems remain with the auditing of individuals, which affects the success of the partnership.
However, the field of decentralised blockchain-based platforms that lend to legal entities is growing. The collateral for the cooperation is the reputation of the brand, as well as publicly known data on the firm’s profitability and success. Companies that cannot get a loan from a bank prefer to use the services of such platforms.
Conclusion
Blockchain as a technology is improving and penetrating the financial services industry. Anonymity of transactions, security and confidentiality of information are seen as an advantage. Automated smart contracts are available, improving the interaction between buyer and seller.