Most of us probably see at least one published article each day popping on the internet about blockchain technology. Certain, it’s something worth to know. But still, can blockchain transform the whole idea of how we exchange value in commodity trade sector?
The blockchain is a list of digital blocks that have a connection with each other. They’re secured and serve the role of the public ledger of every cryptocurrency transaction.
By offering such platform where Bitcoin overpowers all the challenges of conventional banking, blockchain serves as a distributed public ledger. That’s where everyone can have a copy of every transaction ever took place. The good thing here is that everything operates under hash encryption. In that way, everybody can see the transactions without accessing the personal data of the transaction.
The Power of Blockchain in Commodity Trade
The public ledger technology offers remarkable solutions to financial services and transactions in the commodity trading sector. There’s no need for clearing houses if you have the opportunity of having automated post-trade smart contracts.
Trading soft commodities need management of supply chain as well counterparty risk. The idea of blockchain could make a perfect fit for monitoring such physical commodities along the supply chain. That’s where countless transition processes are still recorded on paper.
If you have the benefit of organizing every title transfers automatically via a distributed public ledger, verified by any counterparty of the supply chain, it could boost trust between the market players and simple heading processes.
We are all persuaded that technology will transform a lot of things. Eventually, it will also change the industry of commodities trading. These include the ones who still keep the conventional mindset of keeping records in paper and spend long days in organizing their bookcases. However, there’s an extensive way to feel secure and allow technology surpass our businesses in that range.
Still, we can make baby steps in accepting the fact. Facilitating commodity trading and risk management software is perhaps one of the initial steps. Only once you’ve digitized the transaction and trade management processes, you can make a pace towards blockchain.
In short, blockchain is considered the future for transaction validation. Today, it’s starting to become the trend in the variety of transitional environments. This technological idea is activating the foundation of the new period in commodity trade. It’s also an inspiration for the CTRM software solution providers out there.
For instance, XDC blockchain is one of that technology who strives to be the marketplace of smart contracts. The platform envisioned a regulated marketplace along with a well-defined process of security audibility. Also, smart contract writing companies will undertake the creation of standardized contracts for typical financial uses cases. However, it will also cater to more tailored applications. XinFin strives to guarantee hacks do not happen on the XDC blockchain.
To conclude, we could approve that evolution of things is the moving force of the humanity. From that perspective, commodity trade industries and information technology are bound to become close friends in the future.