Some financial gurus are convinced that blockchain (the underlying tech behind bitcoin) is the future of business, and they might already have some proof. The Commonwealth Bank of Australia and Wells Fargo have conducted the first international, inter-bank trade deal to use blockchain for the transaction. It was a relatively modest experiment that shipped $35,000 in cotton from Texas to China, but it demonstrated the advantages of taking humans out of the equation. The deal included smart contracts that automatically sent payments and transferred ownership as the cargo reached certain locations. The companies involved didn’t have to waste time sending documents, processing money or worrying about potential fraud.
Don’t expect blockchain to be a mainstay of trade in the near future. Wells Fargo tells the Sydney Morning Herald that there are “significant regulatory, legal and other concerns” that have to be resolved before it’s used on a regular basis. However, the advantages make it hard to ignore. Existing shipping processes can take days, especially for cross-continent trips where time zones are a major factor. Blockchain reduces the transaction time to minutes — cargo could arrive much sooner, which means less time waiting for the products you want to buy.
Source: Commonwealth Bank of Australia