Blockchain, is a distributed accounting technology “peer-to-peer” that has the power to provide a platform to eliminate intermediaries, regardless of the industry. It enables real business models based on concepts such as trust, equity, and identity, establishing reliable and secure exchange networks.

This technology allows the creation of a new generation of transactional applications that establish trust, accountability and transparency while streamlining business processes. It can be used to register (in a chain of blocks) and transfer virtually any value – financial capital, an identity, a will, a deed, or almost any type of information asset. It is an operating system for interactions, reducing the complexity of making transactions, the cost and the time required.

Blockchain art is an emerging technology for disintermediation, whose evolution process is comparable to the first days of the Internet when new features and layers were appearing each week, promising that they would change the way we lived, and they did.

Blockchain and the elimination of the “middlemen”

We are living in the era of disintermediation, defined as the reduction in the use of intermediaries between actors in a value chain. Historically, in the case of the financial industry, each transaction has required a counterpart for its processing, to support and build trust from both sides. By definition, disintermediation goes hand in hand with disruption, eliminating intermediaries and radically changing the business model and the incentive economies linked to mediation.

Blockchain, as a technology, aims to catapult this disruption to new heights with the introduction of commerce, ownership and confidence in the equation. Blockchain databases and registers represent an emerging technological pattern that can radically improve banking networks, supply chains and other transaction networks, giving them new opportunities for innovation and growth, while reducing costs and risks.

Among the industries that currently depend on intermediaries are:

  • Insurance, value chain for the issuance of policies and claims.
  • Health care, electronic records of healthcare, health information systems.
  • Financial services, consumer / retail banking, investment, brokerage, corporate banking.
  • Transportation and logistics, services associated with supply chains, including exports, imports, logistics and related services such as finance, funds transfers, contracts and Forex.
  • Retail and real estate, trade in durable goods and non-durable, which is based on large margins and delays consumed by an established system of intermediaries.

If establishing business networks identifies frictions that generate times, costs and risks, Blockchain can facilitate its reduction to such a level that an intermediary will no longer be necessary.

Smart Contracts, the new era of commercial agreements

By design, Blockchain cannot modify, delete or even append any record in the block chain without the consensus of others in the network, making the system useful to ensure the immutability of contracts and other legal documents.

One of the most important layers of a Blockchain solution is the layer of business rules or contracts. These are business terms integrated in a database of transactions and executed with transactions. This is a component of rules, as needed by any business, to define the flow of value and the status of a transaction.

Smart Contracts (intelligent contracts) and Blockchain fundamentally resolve the issues of time and trust and these two constructions are applied to inefficiencies and costs in various industries such as some financial services, the supply chain, logistics and health care by name some.

Smart contracts have already been used with blockchain in securities settlement, which is a business process through which values ​​or interest on securities are delivered, usually against (in simultaneous exchange) the payment of money, to comply with contractual obligations.

Smart contracts can execute the purchase or sale of property, financial instruments, public registry, payment of taxes for the transaction, among others, without human intervention. The benefit is that it eliminates intermediaries, and they will always behave as they were defined by the parties, generating confidence and reducing risk.