Blockchain in international projects: how much does the technology reduces costs

Closed information and high costs are the main factors that reduce the effectiveness of international projects. Many industries rely on blockchain to solve these problems.

Trade

Traditionally, the movement of goods between States is associated with cumbersome paperwork right up to the physical movement of large volumes of documents. This makes international trade extremely vulnerable to fraud, errors committed by employees of the sphere, and unintentional delays. Another point is the high administrative costs associated with processing, moving, checking and ensuring the security of documentation.

Industry players believe that the blockchain, which is an open and reliable data system, can significantly improve the situation. Companies tend to move to the blockchain transactions, commercial agreements, insurance documents, etc., so that this information was made immediately available to participants.

Plus, an important problem, blockchain being the technology that is hoped to be a solution, is to monitor international supply chains. So that the final recipient of the goods was sure that he pays for what he wanted to buy. That is, for example, that he buys fish extracted in the Pacific ocean, not in a nearby river at the price of fish from the Pacific ocean.

Some of the players are already actively testing the technology. For example, the Danish company Maersk, in partnership with IBM, began to test blockchain-based technology for tracking shipping. London-based startup Everledger has also started “piloting” the use of blockchain to track and protect its assets, for example, diamonds. The platform for e-Commerce T-Mall of the Chinese company Alibaba Group is going to transfer international supply chains to the blockchain. As a result, consumers will be able to track logistic data of more than 30,000 products from 50 countries of the world using a mobile blockchain application.

Payments and transfers

International payments and transfers are one of the most expensive and difficult to-structure areas of the financial industry. The fact is that the intermediaries between the original sender and the final recipient are not one, but several banks. A long chain is formed, as a result of which we get a very high commission rate.

This has the most depressing effect on the lives of migrants who regularly send money abroad to their families. In 2016, the amount of such transfers totaled to $575 billion, the problem is that the poorer the country or region, the more commissions have to be paid for such transfers. Transaction costs today amount to about $30 billion a year.

If we use blockchain technology in transfers and payments, the transaction fee is reduced significantly and, as industry participants say, it is possible to reach zero. For example, at the beginning of last year, the payment application Abra Pay announced its entry into the world market (previously, the project was successfully tested in the Philippines and the United States). The app allows you to exchange cash instantly to residents of different countries without having a Bank account and paying a fee for it.

Investment

Blockchain makes investing abroad more open and reliable.

For example, our project SHIFT.cash provides investors with a platform for high — yield investments in the lowest-risk segment of lending — collateral. Thanks to blockchain, the platform enters the international arena. Now the investor and the borrower can be located in different parts of the world, while the investor does not worry about the safety of transactions.

We specialize on loans secured by car titles. The built-in big data processing system (Big Data) evaluates the value of the collateral (vehicle) and translates this information into the application system. Converting the value of a real asset into a digital format is called tokenization. This is a big step forward for international investment. On the principle of securities, but in the digital environment, you can work with real estate, jewelry, art, etc. It is not necessary to hold the value in your hands, it is enough to have proof of ownership of this value, which is perfectly implemented by the blockchain.