How to Increase Your Revenue Using Blockchain Technology in 2024

Blockchain is regarded as a promising technology with plenty of potential uses across most industries, far beyond simply trading cryptocurrencies or securely exchanging digital assets. 

Deloitte’s research evidence that 80% of businesses from across various industries expect blockchain to bring new revenue streams in the near future. And that most likely will be the case. 

In this post, you’ll discover in great detail what blockchain is in fintech, how exactly it transforms conventional finance, what its use cases are, and what business advantages companies reap by adopting it. You will also find out what challenges in traditional fintech that blockchain solves and explore some popular blockchain solutions that are on the market already. 

What is FinTech Blockchain?

Let’s first discover the core concepts related to the topic:

Blockchain is a decentralized and secure digital ledger that records transactions across a network of computers.

Blockchain records transactions in a chronological chain of blocks. They are linked together and secured through cryptography. Each block in the chain contains a cryptographic hash of the previous block, a timestamp, and transaction data. Once a block is added to the chain, no one can change or delete it without changing the hash of all subsequent blocks. This makes the entire chain immutable and tamper-proof.

You can think of a blockchain as a digital notebook that everyone in a group can see and write in, but no one can erase or change what’s already written. Each new note is like a new block added to a chain of previous notes, creating a permanent and visible record for everyone.

The decentralized nature of blockchain eliminates the need for a central authority managing the transactions and handling sensitive information of all parties involved. 

At the same time:

Fintech blockchain refers to the application of blockchain technology in the financial technology sector.

Blockchain can be used to address the common concerns related to usage of financial services in a conventional way. Now, let’s find out how exactly blockchain technology impacts the established fintech sector. 

You may discover more about how blockchain works from another blog post by DashDevs. 

How Blockchain is Transforming the Fintech Sector?

Blockchain technology, designed to disrupt ways in which conventional banking and financial services operate, has benefits that traditional solutions can’t offer. 

From the perspective of most customers, blockchain is an alternative way to access regular payment, asset exchange, data exchange, and other services. To others, blockchain technology is also a liberation from limitations and burdens, both artificially imposed and naturally occurring.

Here’s the list of benefits customers obtain from using blockchain-based solutions compared to conventional fintech: 

• Decentralization
• Enhanced security
• Advanced transparency in transaction processing
• Cost-effectiveness
• Fast transactions
• Great transaction security
• Accessibility to anyone who has internet access
• Anonymity
• Interoperability across financial systems
• Absence of dependency on banking institutions

To reveal how rapidly the market is adopting blockchain in fintech, let’s take a look at statistics. According to Reportlinkers’ report, the fintech blockchain market size accounted for $3.17 billion in 2023 is projected growth at a compound Annual Growth Rate (CAGR) of 46.92% over the next 5 years, achieving a market size equal to $21.67 billion by 2028. See the growth visualized in the chart below:

Challenges In the Fintech Industry That Blockchain Solves

So, deriving from what permissioned blockchain has to offer, here are the common fintech issues that blockchain resolves:

• Dependency on a centralized system

Fintech depends primarily on centralized organizations, such as financial institutions, to administer and supervise transactions. This concentration may result in bottlenecks, susceptibility to cyber-attacks, and single points of failure.

• No trustability

Traditional banking systems often lack transparency, making it difficult to build confidence without third-party verification. Not to mention that the governing authority has full access to sensitive personal and financial information of parties involved in transactions. This can result in customer data leaks in case of security breaches. 

• Slow processing

It’s common knowledge that traditional banking transactions, especially cross-border, can take one to five working days due to the involvement of multiple intermediaries and complex regulatory checks. 

Blockchain transactions can be significantly faster. As such, transaction time across 74 cryptocurrencies on the market varies from nearly-instant to up to 40 minutes. 

• High operational costs

Conventional banking involves high fees for transactions and financial services due to the costs associated with middlemen, infrastructure, and regulatory compliance.

For example, the average fee per transaction over the past year is about $7, with a peak of $37.22 in December 2023, while in banking institutions, per transaction fees range between 0.5% and 5% plus certain fixed fees. 

Now, let’s move on from challenges to the usages of blockchain in fintech and the business advantages of adopting blockchain-based solutions. 

Blockchain Use Cases in Fintech

The rise of blockchain conceived a range of new assets and ways to exchange them, as well as modified existing systems in other technology fields. Here are the solutions that emerged on the basis of blockchain technology and how they are used:

#1 Cryptocurrency

What it is: Cryptocurrency is a digital or virtual form of currency that uses cryptography for secure transactions and control over the creation of new units. It operates independently of a central bank or authority.

How it is used: Cryptocurrencies like Bitcoin and Ethereum are used for various purposes, including online purchases, investments, and remittances. They enable fast, borderless transactions with lower fees compared to traditional banking systems.

#2 DeFi exchange platforms

What it is: DeFi (Decentralized Finance) exchange platforms are blockchain-based systems that allow users to trade, borrow, and lend cryptocurrencies and other digital assets without the need for traditional financial intermediaries.

How it is used: These platforms provide users with access to secure financial services such as liquidity pools, yield farming, and automated market making. They enable more transparent and accessible financial transactions.

#3 Smart contracts

What it is: Smart contracts are self-executing contracts with the terms of the agreement directly written into lines of code, which automatically enforce and execute the contract terms.

How it is used: They are used in various applications, including automated payments, supply chain management, and decentralized applications (dApps), ensuring trust and efficiency without intermediaries.

#4 Non-Fungible Tokens (NFT)

What it is: NFTs are unique digital assets that represent ownership of specific items or content, such as art, music, or collectibles, using blockchain technology to verify authenticity and ownership.

How it is used: NFTs are bought, sold, and traded on specialized marketplaces. They allow creators to monetize their digital content and buyers to collect and invest in unique digital assets.

#5 Peer-to-Peer (P2P) transactions

What is it: P2P transactions are direct exchanges of assets between individuals without the need for a central authority or intermediary, facilitated by blockchain technology.

How it’s used: These transactions are commonly used in cryptocurrency trading, lending platforms, and remittance services. They provider a faster, cheaper, and more decentralized way to transfer value.

#6 IoT data handling

What it is: In the context of blockchain, IoT data handling involves using blockchain technology to store, manage, and share data generated by Internet of Things (IoT) devices.

How it is used: Blockchain ensures the integrity and security of IoT data. This enables a more protected use of applications like supply chain tracking, smart home automation, and device authentication.

There are more ways to incorporate blockchain into the financial technology niche. Having such options added to your digital product can raise the trustability and grant a competitive advantage. 

Looking for fintech software development services? Drop DashDevs firm a line. 

What are the Advantages of Blockchain in Finance?

Let’s proceed with reviewing the advantages that blockchain has over conventional payment methods in finance. Here are the main points to consider, with a brief mention of how exactly this advantage is manifested and what it turns into:

#1 Streamlined payment processes and reduced transaction fees

• Peer-to-Peer (P2P) transactions without intermediaries, enabling near-instantaneous transactions (e.g., Ripple, Solana).
• Smart contracts for automated and secure payment processing.
• Enhanced security through crypto coding and decentralized networks.
• Lower transaction fees due to the absence of third parties.

#2 Improved identity verification and KYC/AML compliance

• Secure and tamper-proof identity verification through digital identities secured by cryptography.
• Decentralized identity verification that allows individuals to control their own identities.
• Streamlined KYC/AML compliance through real-time information sharing.
• Enhanced security and transparency for better AML compliance.
• Enhanced Supply Chain Management and Reducing Fraud:

#3 Improved traceability for end-to-end visibility in the supply chain

• Increased efficiency through automation and reduced intermediaries.
• Fraud prevention with secure and immutable transaction records.
• Better inventory management through real-time visibility.

#4 Facilitated Decentralized Finance (DeFi)

• Access to new sources of funding through decentralized system lending and borrowing platforms.
• Real-time liquidity access without intermediaries, reducing liquidity issues.
• Lower transaction costs due to the absence of commercial banks.
• Transparent and open-source protocols for greater visibility.

#5 Better payment processing and remittances

• Faster payment process that can be completed in significantly less time (e.g., Payouts.cash).
• Lower fees for consumers, as demonstrated by partnerships like Coinbase and Remitly.
• Enhanced security through blockchain networks’ inherent security features.

#6 Revolutionized asset management and trading

• Appearance of crypto investments and crypto asset management platforms.
• Intellectualized assets with clear views and predictions for investment strategies.
• Predicted stability to investors in a volatile market.

#7 Better fraud detection and prevention

• Immutable decentralized ledger for secure storage of sensitive information.
• Smart contracts for automated fraud prevention.
• Secure identity verification through decentralized data storage.
• Real-time fraud detection algorithms to flag suspicious activity.

If you’re interested in creating blockchain solutions, you may also be curious about how to launch a neobank. 

Blockchain Use Cases in Fintech

Blockchain technology is both a threat and an opportunity for conventional financial institutions. Here are cases of some established banking institutions and their experience with implementing blockchain solutions in fintech:

• J.P. Morgan 

J.P. Morgan is a multinational financial services firm specializing in investment banking, asset management, and private banking.

They utilize blockchain through “JPM Coin,” designed for instant settlement of payments between clients. This digital coin represents fiat currency electronically, facilitating real-time value transfer and improving the efficiency of international transactions.

• Asian Bank

DBS Bank is a leading financial services group in Asia, headquartered in Singapore, known for its extensive banking services across key Asian markets.

DBS utilizes blockchain technology through its involvement in the “Partior” platform, aimed at transforming cross-border payments and trade finance. This blockchain initiative should serve the goals of reducing settlement time, cutting costs, and enabling more transparent and secure financial transactions.

• HSBC

HSBC is one of the largest banking and financial services organizations worldwide, providing a wide range of banking services.

They have integrated blockchain to digitize and streamline the letters of credit process in trade finance, reducing transaction times from days to under 24 hours and enhancing the security and transparency of these transactions.

• Swedish Central Bank

The Swedish Central Bank, also known as Sveriges Riksbank, is the central bank of Sweden and the world’s oldest central bank.

Riksbank is exploring the use of blockchain for the “e-krona,” a proposed digital currency aimed at providing a government-backed alternative as the nation moves towards less cash usage. Blockchain would secure and facilitate the efficient distribution of this digital currency.

In case you need development advice, don’t hesitate to request fintech consulting services by DashDevs.

Popular Blockchain Fintech Solutions

Finally, let’s have a look at some popular blockchain-based multipurpose products on the market: 

#1 Sweet

Sweet is a cutting-edge digital platform that connects some of the world’s most well-known companies with their customers via digital collectibles. This platform intends to democratize access to branded NFTs by eliminating conventional entrance hurdles and streamlining the procedure as much as possible.

What it Offers:

• User-friendly marketplace for NFT auctions and sales
• Simplified transactions with secure and adaptable blockchain technology

#2 Coinbase

Coinbase was founded in 2012 and has since grown to be one of the world’s biggest and most well-known cryptocurrency exchanges. It offers a user-friendly platform for users to purchase, trade, and manage a diverse range of cryptocurrencies. By 2024, Coinbase will have over 98 million registered users and have completed $300 billion in transactions.

What it Offers:

• Easy buying, selling, and management of cryptocurrencies
• Features like recurring buys and vault protection

#3 Coinme

Coinme is a cryptocurrency company that collaborates with Coinstar to offer Bitcoin purchase functionality at thousands of kiosk locations across the United States.

What it offers:

• Cash investments into Bitcoin via kiosks
• Investment management through the Coinme app
• Public access to cryptocurrency investments

#4 Mythical Games

Mythical Games is a platform dedicated to developing games in which users enjoy complete control of in-game assets. Mythical Games uses blockchain technology to verify asset scarcity and provenance, while also providing creative game experiences and introducing a new degree of economic opportunity to the gaming industry.

What it Offers:

• Ownership and trade of in-game digital assets
• Creation of a secondary digital economy within games
• Blockchain verification for asset scarcity and ownership

#5 TRON

TRON is a blockchain platform. It intends to decentralize the web and reshape the internet via its decentralized apps. TRON has swiftly grown its user base and transaction volume, establishing itself as a key actor in the worldwide movement for a decentralized, blockchain-powered internet.

What it Offers:

• Decentralized applications (dApps) development
• A large user base with extensive transaction capabilities
• Integration with BitTorrent for a decentralized internet

Final Take

Embracing blockchain in fintech means recognizing its potential beyond just cryptocurrency. This technology enhances cybersecurity, efficiency, and transparency across various financial processes. With a highly fragmented market and significant growth projections, blockchain stands as a promising avenue for innovative and disruptive solutions in fintech. 

Integrating blockchain-based solutions requires substantial expertise and experience in fintech. Partnering with a trusted vendor of fintech services is half the battle, so should you intend any blockchain project, don’t hesitate to reach out to DashDevs. With over 13 years of experience and 500+ projects successfully delivered, we can help you enter the market with your unique digital product. 

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