Blockchain is the underlying platform that makes cryptocurrencies a possibility. But the applications of blockchain have spread beyond the cryptocurrency sector now – every other industrial sector is now embracing this cutting-edge technology.
To an extent, the increasing adoption of blockchain can be attributed to the huge popularity of Bitcoin. And the intrinsic properties of blockchain, such as absolute accuracy and transparency, robust security using sophisticated cryptographic algorithms, and lightning speed of transactions, make it especially suitable for financial services sectors where escrow plays a crucial role. This has led to the development of escrow services that integrate blockchain, also known as blockchain escrow.
The chief utility of escrow lies in helping dispense funds or vital documents as an unbiased third party. Documents or funds are dispensed only when certain predefined conditions are fulfilled. When integrated with blockchain, it involves private and public keys that are assigned to function as an escrow.
You might think that the use of blockchain escrow services is primarily associated with cryptocurrencies. But today, the adoption of blockchain escrow is not just limited to the cryptocurrency market alone. It is being increasingly embraced by the financial services industry and many other sectors too.
So what are the key industrial sectors heavily using blockchain in escrow? Let us find out below.
Insurance
Blockchain technology is heavily used in the insurance sector in KYC/AML processes, P2P insurance as well as escrow insurance services. P2P insurance is an emerging concept in the insurance sector wherein a set of individuals consolidate their finances and manage their insurance privately. P2P insurance models that integrate blockchain are also emerging, where the insurance premiums of members are deposited in an escrow-like account and claims are settled automatically when certain preset conditions are fulfilled. Adopting blockchain can be revolutionary for insurance companies, by automating routine tasks for greater veracity and efficiency, and containing funds in escrow on smart contracts.
P2P credits and loans
Peer-to-peer (P2P) has emerged as a popular alternative to conventional lending systems, wherein businesses and individuals can borrow and lend to each other on Fintech platforms. The parent companies behind these platforms carry out due diligence, assessments, and verifications, approve credit applications, and even hold money in escrow funds. But the role of mediator, played by the companies, can be eliminated by using blockchain escrow. Smart contracts in the blockchain escrow network fulfill this part through a “trustless” mode of functioning, thereby facilitating real P2P financing where lenders and borrowers can transact directly.
Real estate
The real estate sector comes with tremendous complexities and the involvement of various participants like sellers, buyers, brokers, and agents. Consequently, escrow which is heavily used in real estate transactions, is prone to risks with chances of irregularities and security breaches. Blockchain escrow is rapidly emerging as a valid and scalable alternative that helps parties exchange money, legal contracts, records, and other confidential details over a secure and safe network automatically. It can effectively eliminate the dependency on middlemen, promote fluidity, and enable real-time detection of fraudulent activities too. Exchanges can be scaled up with blockchain in escrow, without impacting the speed of transactions.
Cryptocurrency trading
Blockchain is the fundamental functioning layer of cryptocurrencies. But blockchain escrow is a ground-breaking model that can revolutionize how cryptocurrency trading is carried out now. It aims to ensure greater safety, security, fairness, and transparency in crypto trading. Escrow transactions with blockchain are lightning-fast and secure, which means traders can aim to beat sharp price fluctuations of cryptocurrencies while the trading transactions complete execution. Peer-to-peer (P2P) escrow platforms offer a greater level of security to cryptocurrency investors and traders who are engaged in crypto transactions.
Apart from offering a highly secure and reliable platform to carry out cryptocurrency transactions, blockchain escrow involves lower expenditures compared to other conventional escrow services. So traders can also look forward to saving more money while trading.
Legal
Nowadays organizations are preferring contracts that are digitally secure to facilitate the real-time execution of business deals. As more and more law firms engage in developing standards for “smart” legal contracts and agreements, adopting blockchain guarantees data integrity and transparency. Blockchain is also widely being used in other legal services such as document notarizations, drafting property deeds and land registries, and dispute resolution. Blockchain being implemented in the legal industry can bring radical changes with automation, using algorithms designed to manage escrow accounts automatically with absolute transparency. While resolving financial disputes, money held in escrow as part of smart contracts is automatically disbursed to the party that wins.
Final words
Now, when adopting escrow services to enforce transparency, security, and speed, it is imperative to go with reliable blockchain escrow services like Uniscrow. Uniscrow facilitates safe and verifiable transactions including B2B, goods, services, and crypto assets trading through the creation of digital escrow wallets that are safeguarded using blockchain and cryptography.
Whether you are a marketplace or an individual seller with an escrow account, now is the best time to embrace blockchain escrow services for your business. Reach out to Uniscrow today for a free consultation.