Blockchains create an indisputable digital record that is decentralized, i.e, cannot be changed by a single actor. Using blockchain is generally for digital security.
Here are few reasons to use a blockchain:
Tokenization
A user can authenticate a unique physical item by pairing them with a corresponding digital token. In that sense, these tokens serve to connect the physical and digital worlds. With a token assigned to each physical good, that can revolutionize supply chain management, managing intellectual property to prevent against counterfeiting, and fraud detection.
Digital Identity
Blockchains are not based on having “accounts” or any associated “permissions” for accessing them since ownership of digital assets is based on ownership of private keys. This gives people a new and secure way of managing assets and identity in a digital world that removes exposure to theft and fraud, and it prevents users from having to share too much vulnerable personal information.
Clearing and Settlement of Trades
Every seasoned investor knows that when you make a trade in an account, you generally have to wait for 2 - 3 days before the cash “settles.” Using blockchain technology, there would be no need to wait for 3, 2, or even 1 day for the cash to settle. Since the value of the assets would correspond to a digital key, it could securely be used again immediately.
Government Regulation
Governments could have many uses for blockchain technology, the most important of which is verification of transactions in the capital markets. The government is consistently trying to track financial transactions - whether in the stock markets, corporations, or individuals - and blockchain technology can provide them a new set of compliance regimes to do so effectively.
Audit Trails
At present, banks and other large financial institutions have to take multi-level measures to secure the client account information they hold. Banks can spend billions of dollars to keep information secure, but not all businesses that have sensitive information are banks. The end result is a field day for hackers who want to target businesses and expose customers' intimate financial details. Think Equifax.
Blockchain technology offers a method for automatically creating a record for who has accessed information or records and to set controls on permissions required to see the information.
Markets
If you think of blockchain as digitally unique keys that control code, and in turn, that code expresses ownership rights of any asset or physical item, then it wouldn’t take much additional imagination to see how that ownership of code can come to represent a stock. Blockchain technology can then be calibrated to perform transactions or report transactions of trades, keeping an exact digital record that cannot be altered or fabricated.
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