How Can Blockchain Technology Change the Financial Industry?
Blockchain has been touted as the 'next big thing' in the world of technology. Many who are skeptical about the viability of cryptocurrencies like Bitcoin express optimism at the immutability and security of blockchain and its vast potential across a variety of sectors.
Blockchain is of particular interest in the world of finance. A Bitcoin Exchange facilitates traders' ability to buy, sell, and trade cryptocurrencies built on blockchain, a form of distributed ledger technology (DLT) that underpins the entire crypto ecosystem.
Many believe blockchain has the ability to speed up transaction times, promote financial transparency, and introduce lower fees into the world of finance.
Promoting Accountability And Transparency
One of the most enticing features of blockchain is its distributed nature. Public blockchains are copied in multiple places, and all transactions are sent to a vast network of blockchain participants.
The system is designed to ensure that every blockchain contains the same information, without anyone single actor in control. Multiple copies of the ledger make it impossible for someone to copy or edit transactions, ensuring every record is permanently able to be viewed by anyone.
Blockchain is immune to risks that plague traditional finance, like hacks, DOS/DDOS attacks, and other forms of digital criminality. Blockchain ledgers are unable to be taken down or temporarily disabled, as a criminal would have to somehow successfully hack and begin to change every copy of every ledger in every location.
Digital immunity and accountability have a profound impact on the world of finance. Implementing blockchain technology in global banking and commerce can provide great peace of mind to customers who are concerned about potential scams, fraud, and other illicit activity.
Having a digital paper trail for every transaction that is unable to be modified or altered promotes financial integrity and presents an easy-to-access record to verify information as needed.
Remittances And Global Financial Flows
Traditional finance has struggled to find ways to improve the flow of remittances and cross- border transactions. Currently, it can become very difficult to send money between different countries due to high fees and slow settlement times.
Hundreds of millions across the world still remain unbanked, meaning they are shut out of participating in the global economy altogether. Some banks have started to utilize blockchain technology to improve the flow of remittances via mobile phones, a process where money can be sent in seconds with extremely low fees.
Some cryptocurrencies built on blockchain, like Ripple, are specifically designed and focused on promoting transactions across borders. Blockchain technology allows people to send and receive money without working through an agent or another third party, even if they do not have a bank account.
This can help those who are unbanked send and receive money to improve their livelihoods and support family members living in other parts of the world.
A Safer Way To Send And Recieve Money
Cash, a wire transfer, and a cashier's check remain some of the safest ways to receive payment. However, checks are able to be faked, while many are not comfortable transacting (especially in high amounts) with cash.
Depending on the jurisdiction, wire transfers can include costly fees and take a few days to clear. With blockchain technology, a buyer can quickly send money safely to a seller and have peace of mind that the transaction cannot be reversed or otherwise manipulated.
Blockchain dramatically reduces the risks of a seller scamming a buyer, which fosters more people to conduct transactions. A marketplace where buyers and sellers feel comfortable opens up financial opportunities and can lead to the creation of more cutting-edge financial technology to either provide competition or open up new avenues.
Blockchain's Impact On The World Of Finance
Some banks and other financial entities have seen blockchain's advantages and are expressing interest in its use. The immutability, security, and seamlessness of blockchain can revolutionize the world of finance and give consumers a safe tool to buy.