What is blockchain technology?

A blockchain is a peer-to-peer network of computers or servers known as “nodes” that both participate and monitor the transfer of information and assets. Every transfer is recorded on each user’s computer (node), generating a platform of trust based on several identical copies of the ledger.

Blockchain is the technology through which cryptocurrencies and information can be shared.

What makes blockchain technology so valuable is that it removes the need for a centralized third party, ultimately improving efficiency, security, and reliability for countless industries.

Blockchain technology is revolutionizing industries from finance to agriculture. Businesses large and small are taking on the challenge of integrating this technology into their operations.

Blockchain has especially impacted marketing, legal, and payments for countless businesses.

In short, a blockchain uses a public ledger that can be traced and recorded by all participants.

Similar to the way Google Docs allows users to work on the same project simultaneously, Blockchain gives users public access to money transfers that would otherwise be private. As a result, any modifications are monitored by all users, adding further security measures.

Distributed ledger technology vs. blockchain technology

These terms are often used interchangeably, which can cause a ton of confusion around an already complex topic. For those uninitiated, here’s a little more information on the difference between blockchain technology and distributed ledger technology.

Distributed ledger technology

Man on computer with secure folders overlaid on images

A distributed ledger is a directory or database that’s stored across various computers (aka nodes). All nodes possess an exact copy of the ledger. When new information is added, the nodes conduct an automatic vote to verify the authenticity of the update.

When the majority of nodes agree (aka gain consensus), the system updates itself accordingly (ie. adopting the new information into all copies of the ledger, or rejecting it). Distributed ledgers run without a central authority, revolutionizing the way we think of democracy.

The technology is able to reduce the “cost of trust” (aka the amount of money you need to pay for various services that authenticate transactions). Because transactions are transparent, the ledgers are distributed across several computers and encrypted to ensure protection, tampering with data is almost impossible without detection.

This means that distributed ledgers can optimize various business tasks while saving you money you’d otherwise spend on fees for your lawyers.

You’re probably thinking that these sounds exactly the same as blockchain technology. Not so. Remember biology class? That’s where you’ve probably heard the phrase “All bugs are insects, but not all insects are bugs.” Same goes here.

Blockchain technology

Blockchains and distributed ledgers have a very similar relationship to each other. Blockchains are a type of distributed ledger technology where data is structured into blocks. When new data is added, new blocks are created, forming a chain of blocks (hence the name). As with distributed ledgers in general, cryptography provides security for the system.

This is the only significant difference between the two phenomena. Because of the specific structuring of data, blockchains are sometimes considered more advanced and more expensive, hence their use in financial transactions.

The reason these terms are used synonymously is because blockchains are the most widely used iteration of the larger, umbrella technology known as the distributed ledger. For our purposes, we’re going to use the more widely known term to avoid confusion, and because we will mostly be referring to the financial use-cases of these technologies. In this space, blockchain reigns.

Conceptual image of distributed ledger.

How was blockchain created?

Graphic of chain made up of digital points with binary code in the background

Blockchain technology found its origin in cryptocurrencies like Bitcoin. It enabled the exchange of currency, recording each blockchain money transfer into a publicly-accessible digital ledger.

Blockchain was initially released in 2008 as a vehicle to transfer Bitcoin. But since then it’s been recognized as a way to share more than just currency, including records, electricity, contracts, etc.

Notable users of public blockchains are Ethereum, Ripple, and of course Bitcoin.


Blockchain originated from cryptocurrencies as a vehicle to transfer digital assets. While a cryptocurrency is decentralized and thus a global digital currency, fiat currencies are government-backed, legal tender. Here are three cryptocurrencies that blockchain helps to facilitate:


The first major cryptocurrency, Bitcoin, blew up newsreels in late 2017 when its value jumped to nearly 20,000USD. It was created by the unidentified Satoshi Nakamoto in 2009. Bitcoin’s blockchain ledger is the most popular and widely-used public blockchain. Despite its potential as a global digital currency, it has attracted stigma and critique due to heightened criminal activity and value volatility.


Ether is a cryptocurrency created by Ethereum, a computing platform focusing on blockchain smart contracts. Ether is arguably the world’s second most popular cryptocurrency behind Bitcoin. Like Bitcoin, it’s value has skyrocketed, while fortunately lacking the reputation in criminal activity of its predecessor.


Ripple worked with B2B payments as a currency exchange and remittance network before releasing its cryptocurrency, XRP. Arguably the third most popular cryptocurrency, XRP doesn’t require a proof-of-work system like Bitcoin. Instead, blockchain money transfers with XRP follow a consensus protocol in order to secure account balances within its system.

Since its peak in 2018, Bitcoin remains the most popular cryptocurrency, maintaining a price of at least $3500 above the previous year. 2019 has proven to reinforce interest and trust in cryptocurrencies.

Blockchain is nudging its way into the mainstream. But what does this mean for the future of payments? While governments struggle to regulate cryptocurrencies and fear the devaluation of their national currencies, some are taking measures to compromise. The future of digital and fiat currencies may be intertwined.

Using blockchain to send money

Globe with lines to show something traveling

Blockchain is groundbreaking technology that optimizes the way money is transferred and transactions are processed. While it has been used in many fields since its introduction in 2009, blockchain technology is still most widely used in money transfers and transaction reconciliation.

But, cryptocurrencies aren’t the only funds that can be transferred on a distributed ledger.
Blockchain was built for the purpose of facilitating money transfers that are fast, safe, and secure.

How does blockchain work?

In order to send data, blockchain uses a distributed ledger and hash function. What does this mean? A transaction is converted into a code, which is added to a ledger and shared with multiple fact-checking computers. Let’s break it down.

A hash function is a code comprised of numbers and letters that’s used to identify blocks of information. There is no way to determine the algorithm that creates the hash. And although a hash is completely randomized, it includes certain features that makes it very difficult to falsify.

The codes (hash) are entered into a distributed ledger (the blockchain). They’re copied with each new block and each new entry needs to match with the last entry, therefore preventing any tampering. If someone attempts to change one hash, they would have to change all in the chain. And while that sounds simple, there are some restrictions that make it almost impossible.

For one, these hashes are compiled and then shared with computers around the world, known as nodes, which track and approve each transaction. Once the majority of Nodes agree the transaction is valid, and the new data matches the prior entries, it’s entered into a block. The process of tracking hash is what’s referred to as proof-of-work.

A block is a collection of hashes that are compiled and shared with each node, making up a blockchain.

For two, the blockchain is automatically updated every ten minutes. And once it updates, no one can alter it. Humans and computers are not able to manipulate a block in that amount of time, making the process virtually impossible to hack.

What do you need to send money using blockchain?

In order to initiate a transaction, blockchain users must create a wallet, which works as an address, and a private key. These two things represent a user’s identity within the blockchain. Unlike the private key, the wallet is public. They work together to maintain security and accountability.

Is blockchain safe?

Pad lock on a chain

A publicly-accessible ledger may seem like a breach of privacy. However, its public nature allows a blockchain money transfer to be monitored by all participating parties (nodes), providing a platform of trust that is tamper-proof and immutable.

In fact, one of blockchain’s key features is its security. Blockchains are encrypted and virtually hacker-proof. This has benefits for users and concerns for regulators.

Blockchain’s data structure cannot be altered or deleted. To tamper with the information in a blockchain, each copy of the ledger on the majority of participating computer nodes would need to change the same piece of information. As a result, a 51% attack is the only way to effectively change the information contained within a blockchain. But with the proof-of-work consensus mechanism used by public blockchains, this makes this type of attack impractical.

Or in other words, nearly impossible.

With recent banking scandals and financial crises in mind, blockchain technology provides an extra level of security for small business payments. It may be in the best interest of small businesses to secure their funds with blockchain technology.

Trust often costs businesses money, and banks and government institutions take advantage of that fact. Blockchain removes the need for it at all. Trust is expensive and businesses have to work for years to build it. But with blockchain, users have the benefit of abandoning trust, both for governments or transacting partners.

The irony of blockchain is that the incentives for using it are also points of criticism. Regulators in many countries are wary about a decentralized currency. And governments recognize the potential blockchain technology has for criminal activities, due to its anonymity. Blockchain uses a public ledger, but personal information is limited to the user’s digital signature and username.

Where can you send money?

Globe showing connections

Blockchain money transfers can be sent and received in any country that allows the technology to exist. However, with Veem, blockchain money transfers can be sent to Mexico, Brazil, and the Philippines.

The legality of cryptocurrencies varies by country. Where some countries identify blockchain technology as a threat, connected to illegal activities, others accept cryptocurrencies along with their national currency, and others yet have developed, or plan to, their own electronic currencies.

Many governments warn of cryptocurrencies’ volatility and lack of regulations, meaning that there is no legal recourse to protect users from loss. For example, Taiwan’s government has stated that a cryptocurrency “is not issued by any monetary authority and is therefore not entitled to legal claims or guarantee of conversion.” Most countries have released similar statements but have not developed regulations over general use outside of banks.

Where are cryptocurrencies illegal?

Gavel on table with law book and metal scale
Bitcoin and other forms of cryptocurrencies are prohibited in Algeria, Egypt, Morocco, Bolivia, Ecuador, Nepal, Pakistan, Indonesia, and Vietnam.

These countries have different reasons for banning cryptocurrencies. Ecuador, for one, established a now failed state-run electronic money system. Morocco claims cryptocurrencies infringe on exchange regulations. Others have conflicting ideas about taxation, since unregulated organizations open doors to data mining, which poses tax complications.

Where are cryptocurrencies legal?

Gavel on table with law book and metal scale

In other countries, bitcoin and other digital currencies may be legal, but are restricted from banks. Countries in this category include Canada, China, Columbia, Saudi Arabia, Jordan, Iran, Bangladesh, India, Taiwan, and Cambodia.

For example, in Canada, “dealers in digital currency are regulated as money services businesses.” Only companies dealing in digital currencies that are registered with the Financial Transactions and Reports Analysis Centre of Canada (Fintrac) can open and maintain bank accounts. Some major Canadian banks have banned credit and debit card users from purchasing cryptocurrency altogether.

Similarly, China has banned financial institutions from facilitating bitcoin transactions. China’s recent cryptography legislation, effective January 2020, is a part of Chinese President Xi Jinping’s initiative to “seize opportunities in blockchain technology.”

Benefits of using blockchain

There are many benefits to using blockchain. What ties them all together is that blockchain erases the need for a human mitigator. No intermediary, such as a banker or lawyer needs to approve your transaction. If the transaction is deemed legitimate, it’s blocked and added to the chain. This makes the process quicker, cheaper, and of course free from human error and fraud.

Blockchain speed

Blockchain is particularly used for its speed.

Being a digital platform without any intermediaries or third parties, blockchain money transfers are sent and arrive almost immediately. Any possible delays would stem from the regulations or policies forbidding or stunting blockchain technology in particular countries.

Time for transfers:

Bitcoin: 30 minutes to 1 day

Digital payment providers: 1-3 days

Paper check: 3-10 days depending on mail system, sufficiency of funds

Bank wire:
Domestic: a couple minutes
International: at least 3 business days

Blockchain fees

In theory, there are no fees when it comes to sending or receiving blockchain money transfers. However, this doesn’t account for foreign exchange (FX) or transaction fees that could be charged depending on the company or platform that the funds are transferred through.

In fact, blockchain is suggested to cut costs by reducing the need for middlemen or third-party authentication.

Cost of sending money

Bitcoin: Zero fees, only FX and transaction fees by company

Digital Payments Providers: 2.9% + $0.30 for local transactions

Paper check: Between $4 – $20

Bank wire
Domestic: $30 for senders / $15 for receivers
International: $45 for senders, $15 for receivers + FX/other fees

Restrictions to blockchain

Although cryptocurrency technology has been developing since the 1980s and blockchain itself was introduced in 2009, it’s still new to the payments world. For this reason, specific countries are resistant to accepting it.

Because of its age, the vocabulary surrounding blockchain is complicated and unfamiliar.

Additionally, blockchain is disruptive. Although this is a very positive quality in the eyes of users like business owners, it threatens the platforms of banks and government institutions that benefit from the outdated, slow, costly, and unsecure processes blockchain seeks to correct.

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Other business uses for blockchain

Blockchain has a widespread impact outside of money transfers as well. Countless industries and multiple levels of business leverage blockchain to automate and optimize their processes and operations.

Marketing with blockchain

Blockchain is drastically changing how marketing is done today. Editing, SEM (search engine marketing), and targeted advertising are just some of the areas of application. But, most importantly, blockchain marketing allows campaigns to be tracked, verified, and quantified without the need for a centralized intermediary.

The performance of marketing campaigns is notoriously difficult to gauge and track, as it involves multiple parties and layers of influence. So, having data and results publicly tracked and displayed using blockchain technology cuts down on the potential for fraud and tampering.

Streamlining business operations with blockchain

Blockchain improves processes across a wide variety of industries and verticals, streamlining operations and allowing businesses to optimize. Most importantly, payment operations benefit from blockchain by enabling senders and receivers to publicly transact without the fear of losing money or revealing their identity if they wish to keep it private.

Smart contracts with blockchain

Shaking hands, hands are made out of digital lines

Blockchain smart contracts can be used to automate asset transfers without the need for manual input, while providing an extra level of security to protect transfers. Since these contracts incorporate blockchain technology, they are decentralized, enabling equal authority for both parties.

Overall, smart contracts limit possible errors in communication and workflow through their automation and accuracy, greatly reducing the possibility of corruption and mishandling by eliminating the middleman.

Blockchain has the potential to fix one of our biggest challenges: record keeping. It allows our most precious information to be effectively secured and yet efficiently accessible. This can help with more than just business, but also other industries, personal documentation, and even the electoral system. From government ID, healthcare, and education records to gym memberships and gift cards. The future of blockchain is in every industry.

Healthcare with blockchain

Tablet on table with xray on screen

Blockchain is characteristically interoperable in that its sole purpose is to securely keep and share information.

Health care is a sector that could definitely benefit from the clear, transparent, and instantly available records provided by blockchain. SimplyVital Health has recognized that need and launched a blockchain network, nexus, that creates decentralized patient records. These can be immensely helpful for patients seeing multiple caregivers, since their chosen doctors will be able to access and update their medical records instantly.With blockchain, data is compiled and identity is verified instantly and securely.

Voting with blockchain

Voting is an extremely sensitive process and involves a lot of security and measures and accountability. However, elections face the risk of human error and fraud. Blockchain fixes this issue by removing the need for intermediaries.

Education with blockchain

If you’ve ever forgotten or lost your ID, you understand real frustration. You’ve likely wondered at that moment why something so valuable and necessary to our everyday lives can be so easily misplaced. Why don’t we have safety nets? Or maybe something more permanent?

One thing about personal identity is that it’s all in physical records. Driver’s licence, passport, birth certificate, and even your official transcripts, and diplomas or post-secondary certifications. If these things are lost, it takes time and money to get them back.

Blockchain in retail

Woman handing credit card to a retail worker with a debit machine

Cutting out the middlemen and thus streamlining operations is one of blockchain’s best features. No other sector could use this feature as much as retail, an industry crawling with middlemen.

OpenBazaar, like many other applications, is a blockchain-powered marketplace that tries to cut out the middlemen by connecting businesses directly with each other. While the idea is not new, trusting complete strangers on the other side of the world doesn’t come easily to most people, especially when it comes to choosing business partners.

This is about to change. Thanks to its security and transparency, blockchain can create the necessary trust among participants. This wouldn’t be possible without the technology, since building trust via traditional means (i.e. meeting in person and getting to know each other) is often not feasible.

Blockchain and the government

Cutting out the middlemen and thus streamlining operations is one of blockchain’s best features. No other sector could use this feature as much as retail, an industry crawling with middlemen.

OpenBazaar, like many other applications, is a blockchain-powered marketplace that tries to cut out the middlemen by connecting businesses directly with each other. While the idea is not new, trusting complete strangers on the other side of the world doesn’t come easily to most people, especially when it comes to choosing business partners.

This is about to change. Thanks to its security and transparency, blockchain can create the necessary trust among participants. This wouldn’t be possible without the technology, since building trust via traditional means (i.e. meeting in person and getting to know each other) is often not feasible.

Blockchain in cyber security

Digital rendering of a lock

When it comes to cyber security, blockchain is one of the best solutions to ensure the integrity of sensitive data. Blockchain encrypts its data and creates a log of persons who accessed and modified it. This means that it’s really difficult to access, steal, or modify information without instant detection, which is why many experts claim that it’s impossible to tamper with data stored on the blockchain.

Applications like REMME try to strengthen cyber security solutions for businesses and individuals alike. With a decentralized authentication system, REMME aims to replace vulnerable passwords to create a new web security standard.

You might be wondering, if blockchain is so good, why isn’t my bank using it to send and receive money? There must be a catch.

Blockchain in banking

Woman on laptop with her debit card

The banking industry has taken a huge hit in the past decade. They need a fresh start. Well, as fresh as they can be. In general, financial institutions aren’t looking so hot. From the 2008 banking crisis in the US to India’s current public-sector banking overhaul, things could be better. The big guys like Wells Fargo and JPMorgan are looking to upgrade their platforms.

But, while things have picked up in recent years, many large institutions are still wary to adopt blockchain as a viable payment method for both international and domestic transfers. Why?


Man and woman looking and pointing at a tablet

Decentralization is what makes blockchain technology unique. The ability to share information with all participating parties is how this technology can be more secure than any other for transferring assets. The fear from analysts and fintech companies alike is that banks are undeniably centralized. A blockchain run by a bank is centered on and controlled by that institution, making hacking efforts much simpler.

Instead of needing to infiltrate over 50% of a blockchain to gain consensus, an attack could potentially take advantage of this central administration and alter records and transaction information.

As well, banks are most likely to use a permission, or private, blockchain. Private blockchains are created by a central user or institution and are different from public blockchains, the standard ledger used by Bitcoin and other cryptocurrencies. While it might seem that private is more secure than public, a blockchain that’s centrally controlled, while not as open to outside attack, is easily manipulated from the inside.

No centralized power means everyone has equal responsibility to the integrity of the ledger. Banks can clearly benefit from blockchain technology, and their customers (you) could as a result. But, a centralized institution using distributed-ledger technology seems to defeat the purpose, and a traditional, distributed framework isn’t something that banks are quite ready to adopt.

The very idea of the bank is still ingrained in our social consciousness. A solid, impenetrable structure that holds all of my money and important information from criminals or other wrong-doers. As our world becomes more technologically advanced, digital, and “online,” the physical structures of these institutions matter less and less.

Stock market board

As customers of these banks, we need to let go of the idea that holding our assets in one place is still the safest option. A great analogy would be to think of the stock exchange. If your financial advisor told you to invest all of your money into one stock or company instead of diversifying your portfolio, you’d fire them. Why? Because if that stock goes under, everything is gone.

No, it’s not a perfect analogy and no, putting your trust in one central bank doesn’t mean all of your money will disappear. But, if the 2008 financial crisis taught us anything, it’s that our financial institutions and the economics that underlie them are fragile. So, why not hedge your bets?

How businesses can start using blockchain

Person in warehouse holding a tablet with package tracking times on it

Blockchain is helping businesses across various industries develop security and efficiency, and reduce costs. Businesses can use blockchain to dive into the next generation of disruptive tech.

Aside from payments, companies like Auger uses blockchain to help users forecast events and receive rewards based on their predictions.

Stampd uses blockchain’s immutable public ledger to allow business to timestamp documents and prove ownership of original content and intellectual property.

Provenance helps businesses build transparency for their supply chain. Businesses are able to take in and share data and display key performance indicators for partners and potential partners. This way businesses get to show they’re more than “just talk.”

But, it can be hard to identify exactly how your business can use blockchain technology aside from asset transfer. Of course, we’ve listed the kinds of businesses, and some tools. Here are a few tips for actually implementing what we’ve taught you.

1. Proof of identity

Man holding paper with question mark covering his face

Since the blockchain consists of many “blocks” of untamperable data, it’s excellent for proving vital information. Identity-theft is a real threat in the online world, and using blockchain to prove your identity is the best way to protect your security and assets.

Similarly, blockchain technology can be used to verify new business partners (especially international suppliers you haven’t met in person), or check a prospective employee’s credentials and work history. Blockchain opens the door to a sense of digital security that’s much needed in today’s global environment.

2. Validate your supply chain

Boxes on conveyer belt

Since you’re validating your products with blockchain, why not extend it to the whole supply chain? This way you can track where the parts of your products are coming from, and prove to your customers that your business’ supply chain is clean. Ethically conscious consumers will be happy to buy products that had nothing to do with child labor or inhumane work conditions.

3. Protect your intellectual property

Lit light bulb with woman on computer in the background

The protection of intellectual property is especially difficult in the digital era. Using the blockchain to secure your business’ intellectual property would insure that it can’t be stolen from you, regardless of where and how you publish it. Similarly, selling your intellectual property to customers can be easily managed through the use of blockchain technology.

Quality and labor standards

Every small business owner knows how difficult it is to find reliable suppliers to produce goods at a consistent quality. This is especially true if you’re ordering goods from a supplier overseas, and you can’t inspect the quality of the shipment until it has arrived at your location.

But, if you had access to this automatically gathered and untamperable information, you could rest assured that the quality of the goods you’d receive would match your expectations.Imagine your supplier kept a ledger of blockchain containing all the information about the quality of the goods, including the frequency of quality checks and materials used for production. If you had access to this automatically gathered and untamperable information, you could rest assured that the quality of the goods you’d receive would match your expectations.

Instant trust is created, and you can expect no more unpleasant surprises upon arrival of the shipment.

Ever wondered if all the details on a resume are true? Well, if the resume is sent through blockchain, you can rest assured that all those institutions mentioned would have seen and verified the data. No more resume-doctoring, and no more deception about the qualifications of job applicants. The transparency of the technology can ensure that no forced or unfair labor is used while creating a product.

Paying freelancers and contractors can become much easier if you process payments through blockchain. Each time a contractor finishes a job they automatically create a new block on the chain, which can trigger payment for their efforts. But, business owners can have a hard time finding a payments processor that has blockchain capability, as it is one of the most highly regulated forms of asset transfer currently in use. However, there are a few providers that offer blockchain as a payment method. But, only one can determine the best possible path for your payment.

While blockchain may sound like the best possible way to send your business payments, it may not be. The effectiveness of blockchain technology is also hinged on the size of payment, where it’s going, when it needs to get there, and who is receiving it. Wouldn’t it be better to work with a payments company that can assess and identify the best route (or rail) for your money so it arrives on time, in full, and securely?

If that all sounds good to you, then Veem should be your next payments processor.

Veem’s relationship-based payments and use of blockchain

Veem uses blockchain technology among its multiple rails to make payments faster and safer than ever before. Veem’s multi-rail technology incorporates three main routes: blockchain, treasury, and wires.

Behind the scenes, we find the best available route for your payment among these rails. This way, businesses on the Veem network can benefit from faster processing speeds and lower costs associated with their payments. Imagine a GPS but for sending payments, rather than directions. Our system finds the best available route.

Blockchain: Blockchain technology is solely used to speed up settlement times by eliminating the need for intermediary banks. Wire and FX fees that are normally charged during your transaction occur when your payment hits the intermediary bank account. We eliminate all those extra fees by using blockchain.

Treasury: Treasury is our network of local financial institutions across various countries.

Wires: We take over the process of traditional bank wires to make sure your money reaches its destination, on the occasion that this is the best route.

Customer costs don’t vary depending on the route; they’re always the same. Pay $0 in wire fees and enjoy Veem’s competitive foreign exchange rates.

Relationship-based payments
Relationship-based payments are the future of payments. Veem works to bring businesses together. And it’s not just about a single payment, but rather a relationship.

While blockchain smooths the transaction process by getting rid of the need for trust, businesses still need concrete relationships in order to function effectively. At Veem, we believe a relationship exists in the heart of every payment. And you can’t have trust without transparency.

Veem processes payments with improved speed, transparency, and pricing, while still building business relationships through our international network.