Multi-faceted Use Cases of Blockchain in the FinTech Industry
If you want to use the technology but are unsure about the applications of Blockchain in the industry, here is some inspiration:
More than the security concerns, the cross-border payment requires the involvement of at least two financial institutions for the processing of the payment. In such a case, Blockchain can help individuals to carry out transactions with as minimal entities as possible.
Lending or borrowing of money requires trust and a middleman. However, rather than looking for a middleman for mutual trust between the lender and the borrower, Blockchain technology can be integrated for the development of a lending portal. This portal can create smart contracts, wherein if borrowers pay late, the smart contracts can automatically add the late payment fees.
When an individual has to avail a loan, the person has to submit a credit score. The bank or the financial institutions have to then go through the entire application and gauge whether that individual can repay the loan. In such a case, numerous business hours are spent looking at applications, which can be better taken care of using Blockchain.
- Invoice Management and Billing Solution:
Since the advent of digitalization, the client-vendor relationships have developed not only at a local level but also at the overseas level. Though electronic invoices are helping companies to manage their invoices in a seamless manner, it still requires an added layer of security. Blockchain can help vendor companies to identify the authenticity of their clients.
Regulators, stock marketeers, brokers, listed companies, and the list of stakeholders is still high in the stock exchange. A decentralized platform using Blockchain technology can help increase the efficiency of stock market processes.
These are some of the traditional applications in the FinTech industry that can be traded with the Blockchain technology for better efficiency and productivity, without any concerns of security.
How to Leverage Blockchain for FinTech App Development?
Despite being in the known for over a decade, there are only a few experienced Blockchain developers in the marketplace. As a result, the cost of the development is high since these developers have high hourly cost.
In such a case, you can choose to build a FinTech app on your own, or you can hire an experienced Blockchain development company that offers affordable development. If you wish to outsource Blockchain development service, there are three things where you should not look at Blockchain for the solution:
You should not opt for a Blockchain-based solution when you are low in resources and are looking for an automated solution. An automated solution can be developed without putting a big hole in your pocket using other technologies. Blockchain technology can be used when you seek transparency and security of the process.
- Business Efficiency with Little Impact:
Blockchain solutions are a huge commitment, and they have the potential to influence the operations and processes. If you are looking at the technology to optimize your business’ operations but are not ready to undergo significant changes, then you should opt for technologies other than Blockchain.
Companies out there perceive Blockchain technology as a means to outperform their competitors by improving their processes. In such a case, it won’t be an exaggeration to say that Blockchain requires a long-term and futuristic vision. You should probably shift your gaze to other technologies if you are looking for a short-term solution.
To put these points into perspective, you can opt for the development of an app on your own rather. However, you will have to get well-acquainted with technicalities that are associated with the development.
Challenges during the mobile app development are quite common. Learn more on how we offset the technical challenges through innovation.
Which Frameworks are Used for Building FinTech Apps Using Blockchain?
Frameworks are a foundation for the development of an application. Every language requires a specific base for its existence, and the framework acts as this base. Below are some of the best frameworks that you can use for creating a FinTech app.
CryptoNote is an open-source technology that is evolving to underpin the Blockchain-based applications of the future. It leverages advanced mathematical analysis assisted with innovative ideas to offer personal and financial privacy to end users.
Advantages of Using CryptoNote:
- Untraceable Payments
- Unlinkable Transactions
- Double-spending Proof
- Blockchain Analysis Resistance
- Egalitarian Proof of Work
- Adaptive Parameters
If you want to use CryptoNote for the development of your financial application, here is the reference repository to a new CryptoNote currency.
Similar to CryptoNote, ZeroNet is an open-source technology that is developed to facilitate dynamic and real-time updates on a platform. Using the framework, you can process any type of file from VCS repositories, databases, etc.
Advantages of Using ZeroNote:
- Peer-to-peer Distribution
- Uncensored Operations
- No Hosting Charges
- Easy to Launch
- Accessible Round-the-clock
- Faster Page Load Times
- No Passwords Required
- Offline Access
Want to get started with ZeroNet? Here is a guide to help you join.
Ethereum is a technology, which is being developed by a community that strives to offer open access to digital currency as well as data-friendly services to end users. Using Ethereum, you can develop new digital assets and uncensorable web apps.
Advantages of Using Ethereum:
- Commerce Guarantees
- Highly Compatible
- Value-based Economy without Surveillance
- Peer-to-peer Distribution
Games, coins, and whatnot…
You can develop almost anything that you can think of using Ethereum. Here are some of the examples that you can use to get started.
Getting Started with the Blockchain App Development
Let’s learn the steps to build a FinTech solution using Blockchain. We will use Python as the base programming language for developing a simple public Blockchain application.
We will be creating endpoints for various functions for decentralized networks.
- Eclipse or any text editor
Create a basic Blockchain for the data mining system between two or more peers.
Before starting to code, create a project name and a class. For this project, we will call our project ‘Noobclass’ and create the class using the same name
In this program, every block in the Blockchain will contain a special digital fingerprint and also the digital fingerprint from the previous block.
This data could be information or transaction for any other program.
Below is a step-by-step guide on how to code a Blockchain:
1. How to Create a Block?
In this code, string hash holds the digital signature and the variable previousHash holds the digital signature of the previous block. Also, String data is used for storing the block data.
2.How to Generate a Digital Fingerprint?
Among the other cryptographic algorithms, SHA256 fits the best for the Blockchain. However, before this, we will have to create a utility class using StringUtil.
This code uses a string and applies a layer of SHA256 on it to generate a digital signature.
3.How to Calculate Hash from the Other Parts of the Block?
In this code, we will use applySHA256 for calculating the hash from the other parts of the block. Here, we will use timeStamp to know the time of transaction, data to understand the information, and previousHash to find out the previous value.
Now, we will add previousHash, timeStamp, and data to the Block constructor.
We will create the blocks now. The first block will have ‘0’ value because there is no previous block.
Here, every block will have its individual digital signature that depends on the information and signature of its previous block.
This is not a lot of Blockchain. We will have to store blocks in an ArrayList besides importing GSON.
Now, we can view multiple blocks in the code that can store multiple information.
4.How to Check the Integrity of Blockchain?
We will create an isChainValid() in our class to loop all blocks and compare all the hashes.
If there’s any modification in the Blockchain’s block, it will break the chain.
Let’s add an int called nonce that will be included in calculateHash() and the mineBlock().
The isValidChain() will check if the block can be solved by mining.
When you mine data using the following code, it might take a couple of seconds. You can play around with the difficulty value to note the time it takes to mine a block.
- Your block is ready to store data and information.
- Your block has a digital signature that keeps the blocks joined.
- You can use the blocks to check if data is valid or not.
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You may take a while to get well-acquainted when it comes to using Blockchain functionality to code. I recommend you to explore the applications of Blockchain for the transfer of data. Blockchain technology enables verification without having any dependencies on any other party.
The data structure is append-only, and so any type of data is not lost. Every transaction or transfer of data is recorded in chronological order, wherein all these blocks are time stamped.
Time-stamped blocks and redundant supervision makes the Blockchain technology a viable solution for the FinTech industry. However, you might need a lot of practice with the blocks before moving forward. If you want to develop a solution using Blockchain, it is advisable to seek assistance from a Blockchain solution development company to cut down on time required for the practice and to reach perfection.
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