Here’s how companies can make sure they are blockchain-ready
Blockchains, once considered a nascent, frontier technology, have become increasingly critical infrastructure for enterprises that want to keep pace with the future of information and value transfer. A blockchain is a shared digital ledger of transactions that is duplicated and distributed across a network of computer systems. The ledger is nearly impossible to cheat or hack, because it is verified by multiple participants across the globe and underpinned by cutting-edge cryptography. A blockchain network can be used to execute smart contracts, transfer value, track orders, settle payments, verify accounts and more.
To facilitate transactions, a set of rules — called a smart contract — is stored on the blockchain and executed automatically when a certain condition has been met. For example, a smart contract could include a business payment between enterprises that automatically executes when certain conditions of a deal are achieved.
While there remains a general assumption that blockchain technology is still in its early stages, in reality, it is already entering the early phase of majority adoption, especially by the finance industry. Recalling the massive digital transformation propelled by the internet, many forward-thinking enterprises in the finance sector and beyond are already taking important steps to become blockchain-ready.
Today, the rise of reliable software for holding digital assets and interacting with multiple blockchains and smart contracts have made it easier than ever for enterprises to embrace this new world. Companies that are not already developing a blockchain integration strategy are at risk of being left behind.
The technology-adoption race is on
There is growing consumer demand for all sorts of new sectors within the blockchain space, including Decentralized Finance (DeFi), Non-Fungible Tokens (NFTs), and emergent smart contract applications in insurtech, environmental sustainability, real estate, and more. As one recent Gartner survey showed, around 11 percent of enterprises are already employing blockchain technology in their operations today, while 75 percent are actively researching how they could do so.
Market intelligence organization Blockdata recently concluded that over half of the world’s top 100 banks by assets under management (AUM) now have some type of blockchain and cryptocurrency exposure. Similarly, Deloitte conducted a Global Blockchain Survey and 76 percent of respondents believed digital assets would serve as a strong alternative to, or outright replacement for, fiat currencies in the next 5–10 years.
With distributed ledger technology and smart contracts poised to disrupt $867 trillion in traditional markets according to the 2021 World Economic Forum insight report, the race is on for enterprises to develop risk-adjusted integration strategies and capitalize on the rapidly emerging blockchain economy.
Custody as a first step
In response to growing user demand over the last year, various tools and platforms have been launched that allow enterprises to easily interact with public and private blockchains. Financial institutions in particular have faced increased pressure to offer crypto solutions, and as a result, custody – the ability to hold blockchain-based digital assets securely – has been one of their initial areas of focus. While some companies are still building their own solutions from the ground up, most are realizing that institutional-grade systems already exist and are using partnerships as a quick way to meet consumer demand.
For example, late last year, Standard Chartered, one of the largest banks in the United Kingdom, announced plans for a digital custody system called Zodia, the result of a partnership with Northern Trust. In the United States, BNY Mellon quickly followed suit, partnering with Fireblocks. Just as notably, Fidelity National information, a vendor to banks with nearly $300 million checking accounts, has partnered with custody company NYDIG and claims that hundreds of banks, including small regional banks, have signed up to offer digital assets to their users.
This article originally appeared on weforum.org, to read the full article, click here.
Nastel Technologies is the global leader in Integration Infrastructure Management (i2M). It helps companies achieve flawless delivery of digital services powered by integration infrastructure by delivering Middleware Management, Monitoring, Tracking, and Analytics to detect anomalies, accelerate decisions, and enable customers to constantly innovate, to answer business-centric questions, and provide actionable guidance for decision-makers. It is particularly focused on IBM MQ, Apache Kafka, Solace, TIBCO EMS, ACE/IIB and also supports RabbitMQ, ActiveMQ, Blockchain, IOT, DataPower, MFT and many more.
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