The field of asset management, including contracts, documents, need to be digitalized to keep up the development of the world economy. However, there are still many technical and economic difficulties in digitalizing data. Will Blockchain solve these problems?
Digitalization in asset management
In the global wave of The Fourth Industrial Revolution, advanced technologies have been applied in almost any aspect of life. It is not difficult to list down the benefits of technology for businesses and individuals. Today, most of the daily transactions and activities can be done with just a few taps on smartphones or computers. Although technology presents in most areas, the digitalization of asset management still needs improving.
This is a potential market with a total market value of 1,240 billion USD in 2018 and promises to increase to 6,910 billion USD by 2024 with an average growth rate of 34% per year. The Asia Pacific is the fastest-growing market in the world because some Asian countries, especially Japan, have a positive attitude toward Blockchain technology – a key technology for asset management digitalization. This figure shows that data digitalization and digital asset management is a new trend in the world because it helps businesses save costs and time while improving the quality of services and sharing information easily inside and outside the organization.
Challenges in digital asset management
Currently, the field of digital asset management is quite limited. Most of the contracts, asset certificates are still stored mainly in traditional physical documents. At the same time, administrative procedures, information authentication, asset transfer are still handled manually through repeated checks, reconciliation, and confirmation based on the original documents, contracts, or certificate of assets. These are the root causes of wasting in time and cost of society, businesses, individuals, and administrative agencies. Taking the real estate transaction field as an example, in order to certify the accuracy of the real estate documents, it is necessary to involve intermediaries such as state agencies. These agencies will review and trackback both the original documents submitted by the requesters and their recorded information to check the accuracy of the documents. When performing transactions, the two parties must sign the contract and notarize it at the notary office with the inspection and authentication of all documents and contracts again. All these procedures must be carried out directly at the notary office and cause a lot of cost and time for all parties.
The administrative procedures and information verification, which are time-consuming and costly, cause from the lack of trust. Therefore, it is necessary to have an intermediary to confirm transactions, prevent forging documents, and frauds in transactions. Most procedures requiring original documents for comparison and verification will cause difficulties in transferring and risk of losing documents. Moreover, this also takes much time to extract, retrieve documents, and related information, thus, lead to errors in the process of retrieving information.
Manual management of documents, data is time-consuming and costly (illustration image)
From this situation, digitalizing the management of documents, data, and property rights is essential. However, the biggest obstacle in digitizing assets and data is from the technical aspect. The current technologies of document digitalization have not been able to solve the problem of trust and transparency in transactions and management. Organizations and businesses that have applied digital asset management still use the internal centralized database. With this type of database, the system can be attacked, resulting in loss or leakage of data. Meanwhile, the data on the centralized system is changeable and modifiable; then, the information is not transparent and trustworthy. Information retrieval and the ability to upgrade the system are also weaknesses of the centralized database system compared with the decentralized database system. An important issue that limits the popularity of asset management digitalization is user identification and property ownership in the digital space. To manage and transfer assets or contracts entirely on the digital space, an immutable identification mechanism for users and property ownership is required to avoid possible frauds and violations, also, help to control assets and transfer more easily.
Benefits of Blockchain in asset management
The development of Blockchain technology has paved the way for the remarkable growth of digital asset management globally. With high security and immutability of data, information stored on Blockchain is indelible, unmodifiable, and absolutely safe. Therefore, Blockchain makes all information transparent and secure, along with easy access. When participating in Blockchain, each user will be identified with a unique string of texts and numbers called a private key. This secret key represents the users on the Blockchain and is used to sign, confirm transactions and ownership of digital assets. Consequently, Blockchain solves the problem of user identification and asset ownership verification, making transactions easy and secure. One advantage of applying Blockchain for asset management is the ability to upgrade and expand the system easier and less costly than the centralized database system. Thereby, Blockchain is a flexible and optimal solution for asset management, data, contracts, and documents for organizations and businesses.
Blockchain advantages over centralized database
The Vietnamese Government is interested in promoting Blockchain application in asset management
Blockchain is also a key point in Vietnam’s Government’s technology development strategy. Recently, the Vietnamese Ministry of Justice has cooperated with Infinity Blockchain Ventures Company (IBV) to hold a Seminar on Building the Legal framework for the application and development of products and services based on Blockchain technology. The goal of this seminar is to promote the implementation of Blockchain in asset management, data and information authentication, and motivate integration in the digital economy. The seminar was organized with the participation of representatives of the Vietnamese Ministry of Justice, representatives of the Department of Cyber Security, and the Prevention of High-tech Crime from the Vietnamese Ministry of Public Security and other professionals from Blockchain businesses and organizations. Through the seminar, representatives of government agencies expressed their support for the application of Blockchain in their lives and absorbed the opinions of businesses to complete the legal framework for the application and development of Blockchain-based products and services. At the same time, businesses and organizations also explained Blockchain applications based on professional and practical perspectives and highlighted the difficulties remaining when applying Blockchain, from there, both sides can have a comprehensive view on Blockchain application in Vietnam.
During the seminar, the representative of the Vietnamese Ministry of Justice also said that the application of Blockchain technology to the traceability of information, asset management, data and documents without any relation to cryptocurrencies is appropriate, and not violating the law. The representative also acknowledged the outstanding advantages of Blockchain in reducing costs, processing time, increasing transparency, preventing fraud in property ownership, as well as identifying precisely the owner. According to Dr. Nguyen Thanh Tu – Director of the Civil-Economic Law Department of the Vietnamese Ministry of Justice, to promote Blockchain application, the government should pioneer the application of this technology to solve problems related to transparency, and assets identification on a digital platform and create a pilot legal framework. Cooperation between the Government and businesses is needed to push Blockchain adoption in the economy. He also encourages businesses to develop Blockchain products and services to gain broad acceptance from users.
Dr.Nguyen Thanh Tu – Director of Civil – Economic Law Department of the Vietnamese Ministry of Justice spoke at the seminar – source: Asia Blockchain Review
One of the projects gets the most attention of the guests at the seminar is WOWTRACE – a Blockchain-based digital asset management application. By using traceability technologies via QR codes, barcodes, or NFC, WOWTRACE offers users the ability to retrieve information immutably and easily based on the Blockchain platform. The WOWTRACE solution also validates ownership of the property owner via a secret code and can be applied to property transactions quickly and conveniently, saving time and money. The solution also allows state agencies to perform notarization of documents, retrieval of information, transaction history of assets. From there, all information related to documents and assets can be retrieved on Blockchain, minimizing the lack of transparency, crimes in exchanging and trading properties, and helping owners, agencies. Strict and continuous control of state assets.
With WOWTRACE, each document or contract is identified by a unique ID and stored on Blockchain. Whenever a property transaction occurs, the buyer and seller must use their private key to confirm the transaction; then, the ownership is transferred to the buyer. Similarly, the notary also has his / her private key and uses it tas the replacement of traditional sign on paper. In the same way, information about the transaction history of assets, contracts are stored and continuously validated with undeniable evidence based on Blockchain.
WOWTRACE’s Blockchain-based Asset Management Solution
“WOWTRACE’s solution is built on the private Blockchain platform and completely unrelated to cryptocurrency. Moreover, the asset management solution of WOWTRACE also helps organizations, individuals, and businesses to track transparent information about the transaction history of assets, verify the truthfulness of assets, minimize costs, time, and the need of intermediaries. It also helps manage and store data, documents, and asset certification safely and effectively, prevent document fraud and business fraud. ” -Mr. Nguyen Duc Phuong Nam – Managing Director of WOWTRACE, shared.
Mr.Nguyen Duc Phuong Nam – Managing Director of WOWTRACE presented at the seminar – source: Asia Blockchain Review
WOWTRACE is a completed ABCD (AI, Blockchain, Cloud, Data) Traceability Solution that brings sustainable growth and transparency to the supply chain across Asian countries. Thereby, all stakeholders achieve end-to-end visibility and control over their operations on the supply chain.
Learn more about WOWTRACE at: https://www.wowtrace.io/
In 14th December 2019, the Vietnamese Ministry of Justice has...