October 2020 | Guest article by Evgeny Matershev, CPO and co-founder of iVE.ONE and partner of neoFIN Hamburg
Blockchain has become increasingly well known in Germany in recent years. About 15% of the companies already benefit from the technology (PWC Global Blockchain Survey 2018).
Although most people associate it with crypto-currencies like Bitcoin, the range of application is much broader and offers innovative application possibilities in almost all business areas, from logistics to corporate financing. Almost half of the companies see the greatest potential of blockchain technology in the financial sector (PWC Global Block Chain Survey 2018).
In brief: The technology allows transactions between individuals and companies without having to resort to intermediaries – e.g. banks and clearing houses, notaries and brokers – i.e. middlemen who incur unnecessarily high costs. For companies, this means enormous savings potential and at the same time the entry into the digital world of tomorrow. Comparable to disruptors such as Uber or Airbnb, which changed the way we travel and stay overnight, iVE.ONE is now revolutionizing the financial world.
Previously, securities were stored in physical form in central securities accounts of intermediaries, which made processes more expensive and delayed them. This prevented paper certificates from being integrated into new, digital processes. Previous attempts to integrate block-chain technology into outdated securities processes have failed due to non-existent regulation and anonymous data. iVE.ONE offers fully regulated and legally compliant digital securities on the block-chain, which are therefore more efficient than outdated traditional processes.
Digital securities issuance
For example, if a company decides to issue shares, profit participation rights or other securities to finance itself, the iVE.ONE platform enables the company to do so quickly, digitally and cost-effectively. Since iVE.ONE is intuitive and easy to use, comparable to online banking, it becomes straightforward for both issuers and investors to process securities transactions without having to understand the technical background.
How does it work?
The listed securities are offered to potential investors on the iVE.ONE investment platform. Here, securities trading is no longer processed via a single central register, but via several interlinked machines. Each of these linked registers is identical and notes who owns which security. Anonymity is guaranteed to the outside world, as the register only contains the securities account number of the respective investor. However, the identity of the investor is first verified by iVE.ONE’s KYC/KYB technology.
The blockchain technology not only provides transparency and digitalization, but also the existence of a decentralized account book, since the technology is part of the Distributed Ledger technology. While expensive errors and fraud attempts can still occur with a single register, this decentralization makes it (almost) impossible to subsequently alternate the confirmed data.