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The Latest in FinTech: Blockchain for Business

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Among the recent developments in the rapidly evolving field of financial technology (FinTech), blockchain has an extraordinary potential to revolutionize the way business is done. Blockchain technology was first utilized in 2009 to create the Bitcoin cryptocurrency, which to this day remains its most well-known application.1 But while cryptocurrency has enraptured everyone from billionaire venture capitalists2 to Wu-Tang Clan member Ghostface Killah,3 blockchain has so much more to offer to businesses in the financial sector and beyond.

Learn more about the basics of this vital FinTech innovation, and what building a skill set in blockchain could do for your organization and your career.

What Is Blockchain, and Why Is it Secure?

Blockchain is defined at its most basic as an “append-only” digital transaction ledger, which means information can be added to it but not edited or deleted once it’s been posted.4 A blockchain’s unchangeable structure is achievable because of the complex process by which a “block” of new data is added to it. Users who wish to have a new block of information validated and recorded must solve a mathematical problem, and every time a new block is successfully added to the chain, the problem required becomes increasingly complex. Editing information on any block would require the recalculation of every math problem completed throughout the life of the chain, which would demand such an unrealistically large amount of computing power and time that the blockchain is functionally tamper-proof.1

Blockchains are also consensus-driven, which further secures them from tampering. The mathematical problems that must be solved to add to the chain are so complex that they require multiple users working in tandem to solve them. These users are driven by the incentive of a valuable asset (such as a bitcoin or other cryptocurrency) distributed to the user who eventually solves the problem in a process known as “mining.” This decentralized structure prevents a single bad actor from recording a transaction alone and ensures that all transactions recorded to a chain are publicly visible and verifiable.4

Blockchain Makes Contracts Smarter

Savvy businesses are already adopting blockchain to create what are known as “smart contracts.” These are contracts that automatically execute and transfer funds out of escrow when all signatory parties meet certain conditions. In a sense, every blockchain addition is a smart contract, as each addition requires the consensus of multiple parties who must fulfill the condition of solving the mathematical proof together to trigger the desired action (the recording of a block of data).

While this arrangement has been most popular in the arena of cryptocurrency mining to date, an exciting new direction for smart contracts is the incorporation of real-world market conditions into those that must be met for the contract to be executed.5 The stumbling block for these contracts thus far has been scale: Financial organizations that are working to develop private blockchains to administer specific contracts have struggled to create the consensus-driven security that defines larger blockchains with many more contributing users. But as the technology develops and organizations become more comfortable with its complexities, you can expect to see these blockchain-enabled contracts become business as usual.

Blockchain: FinTech Without Borders

If you work—or would like to work—for a company that transfers funds internationally on a regular basis, you should absolutely consider learning more about how blockchain can remove some of the typical roadblocks encountered during this process. Consider how funds are typically transferred across borders: with the participation of multiple intermediary banks calculating fluctuating exchange rates, which takes valuable time and can generate fees that average 7 percent of the total transaction amount.6

In contrast, blockchain payments are immediately available to the receiving party the instant a transaction is recorded, regardless of where the participating parties are located in the world. They can be completed either with no fee, or with a nominal fee set by the agency administering the blockchain, and they are as secure as every other transaction that utilizes blockchain technology. If your organization’s payroll includes a number of international workers, their wages can be distributed more regularly and consistently with blockchain than via conventional methods, which can help with retention of your global workforce.7

New Solutions for Storage Beyond the Cloud

Blockchain’s capacity to streamline storage for businesses worldwide is another potentially game-changing application. Data storage in cloud-based systems today is centralized, trust-based and subject to cybersecurity risks. Blockchain offers an alternative to these systems, a new method of storing large quantities of data securely.8

According to some analysts, the excess hard drive space on computers used to sustain blockchain networks worldwide could hold an amount of data totaling up to 300 times that currently stored on the cloud today.8 This untapped asset could drive down storage costs and improve data security for businesses worldwide.


Add Blockchain to Your FinTech Toolkit With EmergingEd

EmergingEd offers 100 percent online, industry-approved courses in blockchain, designed and delivered by leading experts in this burgeoning field. Start with a foundational approach to its basic concepts, or explore more advanced blockchain applications through real-world case studies.


1. Retrieved on February 18, 2020, from cnbc.com/2018/06/18/blockchain-what-is-it-and-how-does-it-work.html
2. Retrieved on February 18, 2020, from money.com/money/5002207/richest-people-with-bitcoin/
3. Retrieved on February 18, 2020, from digitalmusicnews.com/2018/07/23/ghostface-killah-cream-cryptocurrency/
4. Retrieved on February 18, 2020, from forbes.com/sites/forbesagencycouncil/2018/04/05/what-is-blockchain-and-what-can-businesses-benefit-from-it/#5e806618675f
5. Retrieved on February 18, 2020, from americanbanker.com/opinion/smart-contracts-are-the-future-of-blockchain
6. Retrieved on February 18, 2020, from forbes.com/sites/forbestechcouncil/2019/03/12/how-blockchain-is-transforming-cross-border-payments/#49f334957df2
7. Retrieved on February 18, 2020, from execed.economist.com/blog/industry-trends/5-applications-blockchain-your-business
8. Retrieved on February 18, 2020, from venturebeat.com/2015/03/28/4-ways-blockchain-technology-will-change-the-world/