Though our financial world has transactions of millions of dollars, serving billions of people worldwide on an everyday basis, it is a system that has existed with several problems throughout. There are fees, delays, onerous and tedious paperwork, lengthy bureaucratic systems that hamper business, rather than advance it. The opportunities for fraud and crime, in such a centralized system, is high, though one could expect that it was low. All transactions require financial intermediaries, which delay transactions, and also cost more. Moreover, these financial intermediary channels are existent with a plethora of problems of fraud and crime. To meet with these challenges, banks come up with newer measures of regulations, and they increase every single time, which becomes a top concern for the financial world, with every passing day.
These issues call for a solution that does away with all these challenges, while making things easier for the financial world, globally. Digital solutions are one way to look at it, but the popularity and prominence of blockchain technology in recent days have predicated a lot of changes for the financial world over the last few decades. This decentralized and distributed ledger system allows you to make transactions that are direct and does away entirely with the need for third parties or intermediaries, thus removing delays and fees. Unlike the fiat currencies, this does not have a regulatory central authority, and hence does not suffer from bureaucratic delays that might be harmful to your business, or have regulation measures and fees involved.
The fact that it has a distributed feature allows you to transmit transactions, to a wider range of networks. The potential for a scam is insanely low because it is immutable. There is no way to delete or alter a transaction that has taken place. Hence, you cannot add false information, which makes it safe, secure, and reliable than fiat currency exchanges. This quality of it to follow its own trail of transactions, through distributed ledger technology (DLT) which records transaction details of assets in a number of locations, and allows everyone in a particular network to view all transactions, thus ensuring higher levels of transparency, which was impossible in our previous financial world. The increase in transparency and accountability is one of the many ways in which blockchain technology has changed the financial world.
There are numerous places in the world where banks have still no access or availability, blockchain solves this problem by adding inclusion to the populations that are essentially unbanked. The use of cryptocurrencies, and blockchain, through smartphones with easy to use software like bitcoin loophole, makes sending and receiving money an easy venture, which was unprecedented in the erstwhile financial world. What is phenomenal and has been prompted by the blockchain world, is the speedy transfer of money across borders. Transfer of fiat currencies across borders has to go through numerous checks, takes an insane amount of time, and has transfer money, which makes money transfers difficult, hefty, and expensive. Blockchain does away with this problem, by facilitating money transfers not only in a speedy manner but without the intervention of any third parties which does away with the need for extra fees. Blockchain transfers are not limited by geographies, they can be made directly from a person to person, which is quite a way of revolutionizing the financial sector.
Also, transactions via blockchain technology are completed in less than a second, which is great for everyone involved, as there are no delays and other inconveniences, which come with financial delays. So, holidays, weekends are no longer a problem for you. No matter what the time of the day, you can send and receive money from anywhere across the world anytime!
Frauds happen when there are inadequate personal verifications done, blockchain technology does away with this problem, too. Blockchain relies on the safe identity of its users and operates in a network, which ensures that personal identities are verified and confirmed, and no scams can occur as transactions are transparent to everyone. The tendencies of money laundering which happen over bank transactions lessen and reduce, with the help of blockchain technology.
The changes blockchain technology with it’s decentralized set-up has brought about is not only limited to the financial world, but it can do away with the ways we use money. It has seen a shift in online transactions and might do away with the need for banks, or a centralized system that comes with its own array of faults and delays. Blockchain technology has changed the financial world, the ways the government can operate, the supply management chains as well as the healthcare systems in the globe, by virtue of how transactions are made. Taking into consideration the speed and no extra money, this is a system that continues to revolutionize the financial sector.