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Benefits of Blockchain Technology to Businesses

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The year 2008 saw the introduction of bitcoin (decentralized electronic cash system). Since then, many more cryptocurrencies have been introduced to the market and turned doubters into believers. Those who had misgivings have slowly and surely embraced it as the future and alternative to fiat currency. Indeed, it is correct to say that the blockchain technology has greatly evolved and with it, a whole lot of benefits across industries (from finance to medicine).

Many businesses across different sectors are now looking for ways in which they can integrate the blockchain technology into their infrastructure. Without a doubt, it is correct to say that the future is here. We are firmly in the era of the blockchain technology and cryptocurrencies are slowly providing a paradigm shift to the way we view fiat currency and even transact. That said, how do businesses benefit from the blockchain technology?

If you thought that solutions brought about by blockchain are confined to the exchange of cryptocurrencies, you couldn’t be more wrong. Through its decentralized nature, businesses across various sectors and industries stand to benefit in the following ways.

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1. Increased And Greater Efficiency

As a decentralized digital currency, blockchain has fully done away with the need for middlemen especially when making payments or engaging in transactions of whatever nature be it in the real estate or any other lucrative industry. When you compare blockchain to conventional financial services, there is no denying that it’s faster, instantaneous, and its peer to peer decentralized nature made transactions to be more efficient.

2. Transparency

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If there is something that puts blockchain on a different level, it has to do with the fact that transaction ledgers for public addresses is accessible for viewing by pretty much anyone. This level of transparency and an unprecedented layer of accountability is one of the reasons why blockchain has become very popular with businesses. This greater transparency has in essence held businesses to higher standards and essentially made them to be more open and ascribe to higher levels of integrity in so far as their dealings with customers is concerned.

Source: Pixabay

3. Traceability

The beautiful thing about the blockchain ledger is that every single time there is an exchange of goods or a transaction recorded in the blockchain, there is an audit trail. This audit trail is instrumental in providing an irrefutable proof of ownership or simply to let a person know where goods came from. This improved traceability provided by blockchain is instrumental especially in industries or sectors where verifying authenticity of transactions or traded assets improves efficiency and customer confidence.

4. Security

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Where security is concerned, blockchain is way ahead of other record keeping systems. Why is this the case? Well, every new transaction is not only linked to a previous transaction but also encrypted. There are zero chances of a transaction being altered and this gives individuals a sense of security and trust. The decentralized nature of blockchain also ensures that individuals can transact without having to answer to central governments.

To sum it up, if you are a business in whatever sector, you cannot afford to wish away the key benefits of blockchain outlined in this post. If you are keen on being transparent, efficient, and keen on winning the trust of your customers through secure transactions, blockchain is the way to go. The future that was blockchain is now here with us.

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Blockchain

Jack Dorsey Takes A Big Bet on Blockchain and Crypto, Rebrands Square to Block

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Two days after appointing India-born Parag Agarwal as the new CEO of Twitter, founder Jack Dorsey has set himself for another mission. The Twitter founder is hinting at putting a major focus on developments in the blockchain and crypto space.

On Wednesday, December 1, Dorsey’s financial services firm Sqaure Inc. announced its rebranding to Block Inc. hinting at a major transition into blockchain. In its justification for the rebranding, the company said that Sqaure Inc has grown beyond just a financial services company citing its recently acquired majority stake in music streaming service Tidal. Speaking of this development, company CEO and cofounder Jack Dorsey noted:

“We built the Square brand for our Seller business, which is where it belongs. Block is a new name, but our purpose of economic empowerment remains the same. No matter how we grow or change, we will continue to build tools to help increase access to the economy.”

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The lagal transition from Sqaure Inc. to Block Inc. will happen by December 10, 2021. However, the company’s NYSE ticker symbol SQ won’t change by this time.

Block Inc. – Signifying Company’s Accelerated Growth

The change of name to Block Inc. majroly acknowledges the company’s growth. Since its inception in 2009, the company has added multiple businesses like Cash App, TIDAL, and TBD54566975. Despite the rebranding, all these businesses will continue to maintain their individual brand.

Block Inc. will serve as an overarching system of different businesses united with a common purpose of economic empowerment. It includes a community of sellers, developers, individuals, artists, and fans. The official press release notes:

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The name has many associated meanings for the company — building blocks, neighborhood blocks and their local businesses, communities coming together at block parties full of music, a blockchain, a section of code, and obstacles to overcome.

Jack Dorsey stepping down from Twitter shows that the he will stay more focused towards further developments in blockchain and crypto. Dorsey has been a strong Bitcoin proponent and believes in its ability to be the currency of the internet.

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Grayscale predicts metaverse gaming market could reach $400 billion

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Revenue generated from blockchain-based metaverse games could reach $400 billion in 2025, according to a report published on Thursday (25) by digital asset manager Grayscale. The company estimates that the new market, leveraged by NFTs and metaverses like Decentraland, could reach $1 trillion in revenue a year in the long term.

According to Graysacele in the publication entitled ‘The Metaverse, Web 3.0 Virtual Cloud Economies’, the metaverse is a market opportunity that is still emerging. “The metaverse is in its early days”, says an excerpt from the document, which highlights that many important elements have yet to take shape.

Web 3.0 is understood as the new generation of the internet, that is, decentralized, which is aligned with the metaverse, non-fungible tokens (NFTS) and the ‘play-to-earn’ modality (play-to-earn), is revolutionizing several sectors, such as e-commerce, media and entertainment, even real estate, says the report.

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Grayscale highlighted revenue of $180 billion noted last year and revenue generated in the last quarter of this year, estimated at $8.2 billion. Of that amount, the report says, at least $1.8 billion came from Web 3 and blockchain game-based economies.Graph with revenue generated by decentralized platforms (Image: Reproduction)

To make the estimates more clear, Grayscale took, for example, the economics of the play-to-earn game in Decentraland’s metaverse, powered by the MANA token, which has gained millions of users globally.

Example of blockchain-based games (Image: Playback)

Another point, the report says, is interest in the potential of the new ecosystem by big companies that are focused on Web 3.0, like Facebook, which last month announced its new name, Meta.

“At this inflection point, other leading Web 2.0 technology companies likely need to start exploring the metaverse to stay competitive, and the spotlight has spawned a new wave of investment in this emerging cryptoeconomy category,” says an excerpt of the document.

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On the metaverse concept, the authors defined it as “interconnected, experiential 3D virtual worlds where people located anywhere can socialize in real time to form a comprehensive, user-owned internet economy that extends so far into the digital world as for the physical world”.

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Regulation Is Coming, These Blockchain Projects Are Ready

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Over the last couple of years, blockchain technology and the DeFi applications that it supports have spread far and wide.

From collateralized lending to yield farming, liquidity pools to fractional ownerships via NFTs (non-fungible tokens), the DeFi ecosystem offers way better returns than traditional finance (TradFi). 

The expansion of the DeFi sector has been so rapid that most governments and regulators worldwide found themselves unprepared.

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Until recently, financial regulators have primarily been trying to catch up to the evolving technology.

Ever since the US SEC issued its investigative report on “The DAO” in 2017, concluding that “investment contracts” offered via DAOs or self-executing smart contracts should be treated similarly to traditional financial instruments, progress towards a more permanent DeFi framework has been limited.

Enter, Caroline A. Crenshaw, Commissioner of the United States Securities & Exchanges Commission (SEC). Through her latest opinion piece, “DeFi Risks, Regulations, and Opportunities,” the SEC Commissioner urged decentralized finance (DeFi) participants to comply with all applicable securities law regulations voluntarily. 

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Acknowledging the ongoing uncertainty surrounding the new regulatory framework for DeFi, Crenshaw reaffirmed SEC’s previous announcements, highlighting that “old and existing” laws that apply to securities can and will be applied to blockchain-based financial products and solutions.

The SEC Commissioner also touted dApps (decentralized apps) and DeFi protocols, calling them a “disruptive and beneficial financial innovation” while pointing out the transparency problems in DeFi due to on-chain pseudonymity. 

The article goes on to clarify that within the US, multiple federal authorities, including the Financial Crimes Enforcement Network (FinCEN), the Commodity Futures Trading Commission (CFTC), the Internal Revenue Service (IRS), the Department of Justice (DoJ), and the SEC, can exert jurisdiction over different aspects of the DeFi ecosystem. 

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Commenting on the problems of on-chain pseudonymity as pointed out in the article, JD Gagnon, CEO of BENQI, notes, “It’s a really tough one, but I do generally agree that some form of market gatekeeping to protect less educated individuals might be a good thing.

It’s probably why we’re seeing a strong push to get all Centralized Exchanges to perform strict KYC checks as most of these exchanges are usually fiat off-ramps for exploits or hacks.”

He continues, “But it should also be noted that overregulation may potentially hurt innovation, which has been a key driver for growth in most countries. It’ll be interesting to see how pseudonymity is handled as most honest pseudonymous individuals choose to go that direction because of regulatory implications towards them for being involved in crypto/DeFi.”

With the SEC Commissioner urging DeFi participants to collaborate with regulators and help come up with a more refined regulatory framework that works for all.

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Let’s take a closer look at some blockchain projects that offer better security within DeFi while ensuring compliance with regulatory policies.

KYC-Compliant DeFi Pools For CeFi Institutions

Founded in 2018, Alkemi Network bridges centralized finance (CeFi) to decentralized finance (DeFi). The platform has developed an institutional-grade liquidity solution for financial institutions and investors, allowing them to access “professional” DeFi and earn yields on a range of Ethereum-based assets.

Using Web3 technology, Alkemi removes the hurdles for CeFi institutions to enter the world of DeFi. Alkemi Earn (Earn), the platform’s KYC-permissioned digital asset pools, guarantees institutions with compliant access to participate in a trusted-counterparty environment of allow-listed users.

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Alkemi Network also offers “institutional-grade” reporting, advanced risk management features, and multi-sig wallet functionality to support institutional adoption further.

With the SEC concerned about on-chain pseudonymity, Alkemi emerges as a possible solution that follows KYC and AML guidelines and ensures that CeFi institutions can seamlessly portal into the DeFi ecosystem. The platform has already made a name for itself, closing a $4.6 million funding round with over $32 million TVL (total value locked) in its network. 

Alkemi Network is working together with a consortium of industry leaders, including Shift Markets, LedgerPrime, JST Capital, Autonomy Capital, Validation Capital, Kronos Research, and many more. 

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Military-Grade Secure Crypto Vaults For Institutions

With the total value locked (TVL) in DeFi inching closer to $300 billion, there has been an increasing number of targeted cyberattacks on several DeFi platforms. As such, the need for robust security solutions is at its peak.

While several promising Web3 projects aim to secure the DeFi ecosystem, Prosegur Crypto, the digital asset custody solution of Prosegur group, has introduced an end-to-end security solution for the safekeeping of digital assets, especially for institutions. 

Prosegur is one of the most prominent names within the International Security industry.

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The platform has operated for more than four decades across 26+ countries, managing upwards of $400 billion in assets in the traditional financial (TradFi) world.

Owing to the legacy of Prosegur, its latest crypto-security product, Crypto Bunker, is said to be the most secure and advanced crypto asset custody solution for the institutional market.

By design, the Crypto Bunker offers a multi-layered asset protection model based on the 360-degree inaccessibility concept.

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This means that Prosegur has implemented more than a hundred security measures in six integrated security layers while considering all possible risks revolving around the custody chain. 

Crypto Bunker makes use of two unreachable environments, with the custody mechanism’s core being completely offline storage.

At the same time, it uses an air-gapped HSM (Hardware Security Module) to store the private keys. Furthermore, the platform ensures no single point of failure by using a secure multiparty computation (MPC).

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