How to Increase Your Revenue Using Blockchain Technology in 2023

Blockchain is closely associated with cryptocurrencies and yield farming. It gives the technology a somewhat bad impression among users and even businesspeople. However, blockchain technology is much more than just crypto. It can be used in various industries adding more value to cybersecurity, workflow stability and productivity, and cost-effective operations.

First, the blockchain’s market is fragmented. No major players shape it, which opens a lot of space for disruptive innovations and fresh ideas. The CAGR of joint fintech blockchain market is projected to scale up to 43.8% in 2021-2030 period with US$8.7 billion projected market value in 2030.

To be short, blockchain can empower fintechs if not being entangled or confused with crypto currencies. So, let’s take a look at how the blockchain market changes.

How Blockchain Works

First of all, let’s get to the elephant in the room; what is blockchain?

Blockchain is a distributed ledger technology. It enables secure transactions between parties with no need for intermediaries. Any blockchain developer can confirm that the transactions are transparent and cannot be altered after completion.

Blockchain is a decentralized database. It 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.

The decentralized nature of blockchain makes it a secure and transparent way to conduct transactions. You don’t need a central authority anymore. Talented blockchain engineers can use this technology in many ways: in supply chain management, digital identity verification, voting systems, etc.

When it comes to finances, blockchain technology offers a lot:

• spectacular conjunction of advanced security,
• enhanced speed of operations,
• no need for third-parties,
• and 24/7 continuing workflow.

The funniest real-life case of blockchain used in finances is the adoption of bitcoin as a payment method in Kentucky Fried Chicken. Fast-food chain restaurants started accepting crypto in 2018.

As for something more complex, many companies use blockchain for international transactions: Ripple, Celo, etc. Payments without borders is an appealing idea for whimsical customers with growing demands.

And, the bright side that ties everything together is the growth of the blockchain market. Not only is it embraced by fintechs, but the latest blockchain news is that it is also skyrocketing with an impressive 86.2% CAGR in the US.

How to Apply Blockchain in Fintech

An obvious way to use blockchain in financial markets are

• cryptocurrency,
• DeFi exchange platforms,
• smart contracts,
• and NFT.

It allows different marketplaces to create and use their own currencies. In this way they reward customers and allow them to pay for the services with unique internal bonuses and enhance monetization effectiveness.

Yet, there are more non-trivial ways of incorporating blockchain into the financial technology software. In contrast to the traditional ways, they can raise the trustability of your company and enhance the security of your customers’ data. So, in this paragraph we’ll cover how blockchain can help any business streamline the processes and attract more customers, giving them higher value.

Streamlining payment processes and reducing transaction fees

Blockchain development can do wonders for streamlining processes due to its decentralized nature. With innovative technology, many processes related to financial transactions become frictionless and smooth.

This is how blockchain manages to improve the payment processes for fintech solutions:

1. P2P transactions. Peer-to-peer transactions within blockchain are streamlined between the benefactor and recipient. In contrast to the traditional banking transactions, the blockchain system does not need any intermediary. It works throughout the day and night. There is a popular belief that Bitcoin transactions are slow. But Bitcoin is only built on this technology but doesn’t define it. Let’s take the real blockchain use cases; the average Ripple and Solana transactions are near-instantaneous.
2. Smart contracts. Smart contracts are an automated and secure way of streamlining the payment process. It is still similar to traditional contracts in many ways. But smart contracts are self-executive and don’t need any third party involvement. They are capable of digital verification and ease the execution without regulators, which makes them an immaculate helper in cost reduction.
3. Enhanced security. Blockchain networks are crypto coded which makes them incredibly hard to hack. With the decentralized network it becomes invincible to break into one data holder and leak tremendous amounts of data. There isn’t a place that holds this data in the first place.

As for transaction fees, the point is simple. Since there is no need for third parties, there is no need for extra fees. This in turn enables users to transfer funds more quickly, easily, and cost-effectively.

Improving identity verification and KYC/AML compliance

Blockchain technology can improve identity verification and KYC/AML compliance. It provides a more secure, transparent, and efficient way of managing identity data. Here are some specific ways in which you can use blockchain:

1. Secure and tamper-proof identity verification. Blockchain technology can provide a secure, tamper-proof way of verifying identities. It creates digital identities secured through cryptography. They can be used to verify individuals’ identities, reducing the risk of identity fraud.
2. Decentralized identity verification. With blockchain, individuals can control their own identities. They share only the necessary information with third parties, providing a more secure and privacy-enhancing way of verifying identities.
3. Streamlined KYC/AML compliance. Blockchain can automate the KYC/AML compliance process. It securely stores and shares relevant information between different parties in real-time. This can reduce the cost and time required for KYC/AML compliance while improving accuracy and efficiency.
4. Enhanced security and transparency. Blockchain security and transparency are top-notch. This makes it easier to track transactions and detect suspicious activity, thereby improving AML compliance.
5. Self-sovereign identity (SSI). SSI enables individuals to manage their own identities and control how they share their personal information. SSI solutions enhance privacy and security while providing a more efficient way of verifying identities.

Overall, blockchain technology revolutionizes identity verification and KYC/AML compliance. Yet, it is still an emerging technology and requires further development and adoption to fully realize its potential.

Enhancing supply chain management and reducing fraud

One of the major pain points in the supply chain is non-transparency. Logistical routes and risk management becomes more of a challenge. Especially when consumers are relying on last-mile delivery and other quick ways to get the goods to their doorstep. Blockchain is perceived as one of the ways to leverage the innovative benefits of the technology’s transparency.

Here is how blockchain technology handles such complex operations and can help fintech businesses reduce any sweating over the supply chain.

1. Improved traceability. Blockchain technology can enable end-to-end traceability of goods in the delivery process. This can help identify any problems or issues that arise in the supply chain — defective products, ineffective routes, or delivery delays.
2. Increased efficiency. Blockchain technology reduces the time and cost associated with paperwork and data entry. By automating processes and reducing the need for intermediaries, blockchain can also lessen the risk of errors and delays.
3. Fraud prevention. The technology provides a secure and immutable record of transactions. This can make it more difficult for fraudsters to manipulate or falsify data, reducing the risk of fraudulent activity in the supply chain.
4. Better inventory management. Blockchain technology enables real-time visibility into inventory levels and movements. It optimizes inventory management and reduces the risk of stockouts and overstocking.

Enabling decentralized finance (DeFi)

Decentralized finance is a sure way to get intermediaries out of your business. This solution enables companies to power up direct blockchain transactions between parties. It differs from traditional forms of financial operations that have a central server. DeFi uses a blockchain network where each participant holds crucial data.

DeFi has many benefits which fall under our discussion. Here are some of them:

1. DeFi protocols enable businesses to access new sources of funding. It decentralizes lending and borrowing platforms. That is particularly beneficial for startups and SMEs that may struggle to get traditional financing.
2. DeFi platforms allow businesses to access liquidity in real-time, without intermediaries or commercial banks. This can help businesses to manage their cash flow more effectively and reduce the risk of liquidity issues. More so, this can also result in lower transaction costs for businesses, which helps to reduce operating costs.
3. It’s important to note that DeFi protocols are transparent and open source. Businesses can access and review the code. This provides businesses with greater visibility into how the platform operates.

Payments and Remittances

Payments and remittances financial sector is hopping on the digitalization trend. Funds inflow in the segment is expected to grow to $810.79 billion. How can blockchain speed this process up and/or transform the remittance industry? Let’s unwrap it.

1. The payments are going to reach their destinations much faster than we’re used to. A real-life example of this is Payouts.cash. It launched a crypto offering which allowed recipients from African countries to get their payments in under three minutes.
2. Blockchain enables lesser fees for consumers. Coinbase recently gave the wide public image of how this can be done by partnering with Remitly and allowing consumers to cash out digital currencies with minimal fee.
3. Blockchain enhances security opportunities. The chance to pursue both speed and cost-effectiveness looks as beautiful as nature.

Revolutionizing Asset Management and Trading

Asset management and trading software has a great potential of attracting investors. It is growing with $112 billion assets under management globally in 2022. These tools can also win from blockchain implementations in the most non-trivial ways.

The popularity of crypto investments, that shaped blockchain’s image, is going up. Soon we won’t be able to imagine our life without people talking and boasting about owning crypto currencies. Now, as soon as they get those assets, the fun begins for business owners.

The crypto assets market is expected to grow to $1.2 billion by 2026, with more and more people striving to make the most of their investments. Crypto assets management platforms can allow them to do even more: intellectualize the assets with a clear view and predictions for what comes next.

The market is swinging as in 2022 the investments in Bitcoin and other crypto started to decline. With tools to provide stability to investors, people will be able to access the conditions more accurately.

Fraud Detection and Prevention

Finance is one of the most fraudulent markets and one of its largest stumble stones is distrust from consumers. Blockchain can improve the trustworthiness of the industry. It adds more value to the cybersecurity in the sector.

Fake accounts and general account takeover are the most popular types of fraud. Blockchain’s advantages look really good as the chain is transparent and each stakeholder is hard to take over. Here are some other options blockchain has for fraud detection and prevention:

1. Immutable Ledger: Once data is recorded on the blockchain like a timestamp, it cannot be altered or deleted. This makes the solution perfect for storing sensitive information and data that can be used for fraud prevention.
2. Smart Contracts: As we’ve stated above, smart contracts can be automated under certain conditions. This can prevent fraudulent activities.
3. Identity Verification: Blockchain can provide a secure and decentralized way to store and share identity information. And, to top it off, as you remember, the data can’t be altered once it is in the network.
4. Fraud Detection Algorithms: Blockchain can be used to develop fraud detection algorithms that can analyze transaction data in real-time and flag suspicious activity. This can help prevent fraud before it happens or cut the damage caused by fraudulent activities.

Why Blockchain is Better Than Current Systems

Blockchain technology provides many advantages that traditional fintech solutions can’t offer. From a business perspective, blockchain is more secure and offers faster payments. This attracts more customers, corresponds to reducing customers’ churn, and raises the transparency of a business as a whole.

From a customer perspective, blockchain is faster and more cost-effective than traditional banking ways. But the banking industry is also among the most voracious blockchain spenders. It holds 30% of a general number of industries that adopt this technology.

The vast spreading of blockchain technology across the market evolved from:

• decentralization,
• enhanced security,
• advanced transparency,
• cost-effectiveness,
• fast transactions,
• and accessibility to anyone who has internet access.

Final Thoughts

So, the one thing is clear: blockchain technology can do so much more to a fintech industry than just being a Bitcoin distributor. It’s only a matter of time when it becomes an irreplaceable part of our everyday routine.

The only thing that stops the wide public from accepting blockchain to its full potential is regulation issues. But DashDevs will continue to keep an eye on that for you. Check out our blog for updates, and don’t forget that you can ask us anything via a contact form. We can’t wait to get your business thriving!