In a world where businesses are rapidly changing towards total digitalization, considering all the benefits that digitalization offers, security is also a constant threat to security. Digitalized Industries and businesses rely heavily on the security of transactions amongst their clients, customers, and all the other financial stakeholders they deal with.
Digital transactions though very smooth and easy, make them vulnerable to cybercrime and fraud. To address this issue, innovative businesses are advised to be aware of the fast-developing blockchain technology, which promises more security and makes financial transactions smooth and fraud-free. As we see, blockchain technology can act as an immutable ledger of all transactions across many business networks. It can maintain, track and record both tangible and intangible assets of the business, making them more secure.
A Blockchain network is designed to be a peer-to-peer network where every device or computer in the business network can act as a node, client, or server. Resources are decentralized in this model, but the user list is maintained in a centralized database making it very difficult to hack the systems and enhancing financial security. Blockchain technology was earlier known to be associated only with cryptocurrency and Bitcoins, but the model seems to be rapidly being improvised to other areas which demand financial security.
How supply chain management can be financially secured using Blockchain?
In industries like the food supply and pharmaceutical industries, supply chain management involves several layers of traceability of the products and ingredients. Modern food and pharmaceutical supply chains are far more complex and fragmented. Customers are now concerned as much about the safety of the product along the supply chain as the safety of the final deliverable. Traceability along the upward and downward direction at any point of the supply chain becomes crucial for maintaining the quality and safety of the deliverable product. In industries that deal with food supply chain management, a lack of proper traceability along the supply chain results in food contamination and illness in consumers. This can cause severe financial losses for the industry, public mistrust, and ill health among consumers. When used with traceability tools like IoT and Radio Frequency Identification(RFID), blockchain technology makes traceability in complex FSC networks secure and safe to a very large extent. ‘Smart contracts’ can be generated, and blockchain networks can help the consumers trace backward from any point in the chain to even the input stages of the chain in a safe, secure manner. A case study of the benefits of blockchain by “ Taylor and Francis” enabled dairy supply chain management shows the financial security that can be attained through this technology.
Blockchain technology in the stock market
The concepts of immutability, anonymity, traceability, and security are the main factors driving stock markets worldwide to adapt to blockchain networks. Blockchain networks in stock markets can make a tracing of securities lendings and can also do accurate surveillance of system risk. This enhances financial security. The IGIGLOBAL abstract illustrates the advantages of blockchain technology in the stock market.
The birth of cryptocurrency through Blockchain
Blockchain technology saw the birth and nurturing of cryptocurrency (completely digital currency). The main product of this is the advent of Bitcoin. Some financial analysts today vouch that ‘ paper currency’ and monetary transactions through physical currency, as it is now in the world, are in their last stages. Since every financial transaction worldwide is increasingly digitalized, cryptocurrency will only be the currency used for day-to-day transactions shortly. This, though it is a still budding possibility, is making academicians and industrial analysts delve more into blockchain development as it promises financial security with all its other advantages.
According to the twenty-ninth international conference on AI, there are possibilities of Phishing in cryptocurrency transactions using Ethereum. Hence, blockchain networks should be enhanced with better algorithms that can arrest phishing. This will enhance the financial security of cryptos going forward.
Blockchain-enabled networks will reduce cost, instill customer satisfaction, increase audibility, improve communication, guarantee data interoperability, and enhance financial security. Blockchain technology is still in its infancy, and technological innovation in this domain is happening rapidly. Blockchain will be the future for many areas like cryptocurrency, accounting and auditing, health care e-commerce, energy, etc. advanced blockchain network algorithms, IoT, and Deep Learning Tools will ensure financial security.