Blockchain, Technology

How Goldman Sachs Integrated Blockchain Into Their Business Model?

Blockchain technology and the blockchain ecosystem are on a mission to change the world. From accounting to database management, transactions, digitized contracts,...

Akash Guha Written by Akash Guha · 3 min read >
Blockchain Business Model

Blockchain technology and the blockchain ecosystem are on a mission to change the world. From accounting to database management, transactions, digitized contracts, and anything a world without blockchain can’t think of, blockchain can make them possible. In 2008, blockchain came with the concept of Bitcoin, an alternative transaction system. Both the concepts came along, but blockchain Business Model technology has more than to be a crypto.

Whenever industry leaders compliment or talk about a new approach. The whole industry starts bubbling around that thing. Something likewise happened after Goldman Sachs disclosed implementing blockchain technology through their ecosystem.

Today, this blog post will precisely explain how Goldman Sachs integrated blockchain technology into their business model. And how a blockchain business model development company should scale their services through projects like Goldman Sachs made.

Before upholding something unfamiliar, let’s get familiar with the business model of Goldman Sachs.

The Business Model of Goldman Sachs

Goldman Sachs comes along the world’s leading financial service providers and mainly focuses on the four pillars of financial management. The four principal business pillars are asset management, investment banking, consumer and wealth management, and the global market. Let’s understand these four concepts clearly –

Asset Management

Goldman Sachs helps people scale their wealth through its asset management strategies. As a global trend maker, Goldman Sachs serves worldwide investment funds, hedge funds, credit funds and fixed income, equity, and a whole range of asset management.

Managing people’s assets makes an investment bank successful and lucrative, but there’s more with Goldman Sachs.

Global Markets

Global Markets management, fundraising, financial product selling, and currency exchange-related services also make money for the Goldman Sachs foundation. Valuable clients also get trading information, effective trading strategies, and investment technique-related services; also, this segment participates in options and futures market-related activities.

Investment Banking

Goldman Sachs provides investment banking services for firms and governments. This service spectrum includes financial advice for startups and firms and participating in equity and debt underwriting processes. Goldman Sachs also handles Initial Public Offering activities for various companies in exchange for a small percentage of that total amount. Firms that took Goldman’s Initial Public Offering services are Ezfill, Blue Apron, Cargurus, etc. Investment baking brings the most amount of revenue for Goldman Sachs.

Consumer and Wealth Management

Handling wealth management activities, tax reduction, and management strategy creation are one of the main tasks an investment bank participates in.

Goldman Sachs is extensively known for providing tax reduction and wealth increment services to firms and institutions.

Through these four business services, Goldman Sachs reached the mountain of the financial service market and became the leading investment banking provider. Although Goldman Sachs faced notorious reviews during the 2008-09 market crisis, this company has proved itself as the best over the years.

Now, as we are familiar with the business model of Goldman Sachs, let’s have a detailed discussion over how Goldman Sachs incorporated blockchain services.

Blockchain With Goldman Sachs

With their veteran market services, Goldman Sachs is working towards implementing blockchain-based solutions. Taking blockchain into action is a complex process, but they’re trying with the best blockchain development company. Let’s take a glimpse at the implementation of blockchain throughout their services.

Security

Operating with currency, commodities, and significant global market financial aspects requires high levels of security. Though a shark-like Goldman Sachs isn’t frank with security issues, they work with the world’s best digital security providers, but the necessity of invulnerability cannot be neglected.

So, Goldman Sachs is working on complementing their secret providing services with the blockchain system.

Decentralization

Buying and selling financial services, mortgages, loans, and equity-related things are common in their daily work. A decentralized system would provide transparency over every information and incident on the blockchain network. Also, data changes in any block are evident to every participant, reducing the chances of any data issues.

Data Integrity

Data disintegrity and cohesion is a sensitive issue in the financial industry. Whether a minuscule data manipulation can harm the whole economic cycle, fighting that must be necessary.

Fighting with data disintegration is effortless with blockchain systems. As every block is connected with the other through hash code, and each block depends on the prior block, data stored in one block can’t be edited or manipulated without dealing with every block the blockchain network contains.

These blockchain features can remove the current financial market issues, soothing the perfect flow of investment and banking-related problems. The work behind these technological features is currently under construction; as time moves, everything will be sorted with blockchain and Goldman Sachs.

However, a permission and private blockchain system would be okay for Goldman Sachs. Because financial information is sensible, and a market leader would not bear losing data confidentiality.

Let’s talk about some blockchain projects Goldman Sachs has worked on.

Blockchain and Capital Market

In 2021, Goldman Sachs collaborated with a European investment bank on a blockchain-based project. The following project has been established on the Ethereum blockchain network, with future potential for capital markets.

Evolving with the constant uprising needs of issues, EIB and Goldman Sachs created a public digital issuance with Central Bank Digital Currency. Let’s understand the benefits of this issuance.

  1. Securities usually take T+3 days for settlement. With this technology, the settlement tasks will not take more than T+1 days to fulfill and pay to investors.
  1. It was the digital public issuance in the Ethereum blockchain network as EIB and Goldman Sachs participated in this project. The majority will take action to invest in similar projects based on blockchain.
  1. Since blockchain technology is known for providing time efficiency and cost-benefit, this digital public issuance system will work more accessible and cheaper for investors, as well as banks.
  1. More people will get accustomed to blockchain technology, and the world will change.

The Effect of Goldman Sachs on the Market

Goldman Sachs maintains a high role in global markets and the investment banking industry. The company is a trendsetter for its followers. As Goldman Sachs integrated blockchain to provide better services and similar companies will get interested in blockchain and blockchain development projects. Venture capitalists and governments will definitely take blockchain technology as investable in the long term; the latter depends on how blockchain companies pitch themselves.

Conclusion

As changing the world with blockchain is the main motto, Goldman Sachs also explained how blockchain development services shouldn’t take as supreme in current timings. However, that doesn’t mean blockchain technology can’t sustain itself in the long term, but it requires far more advancements. Let’s end the discussion and say goodbye!

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Written by Akash Guha
Akash Guha is a budding writer with almost a year of experience in content writing.
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