Blockchain technology is bringing a revolution to the transaction system. Having doubts about it being a bubble has not stopped anyone from looking for further possibilities in it.
Blockchain Vs Banks
The accountability, removal of any third party and the extent of traceability it offers in the transaction is a major advantage for blockchain technology. A decentralised system of transaction records and builts an extra layer of trust and security. Purchases made through the blockchain system provides solid proof of the ownership of the concerned property without the need of the middleman. It eliminates the need for banks. The use of “smart contracts” automatically executes the processes of the exchange.
There are several advantages that blockchain technology offers:
- A decentralised platform enables faster and more economic transactions. International transactions also speed up the transactions with a decrease in cost.
- Tokenization of assets by depositing them on public blockchains creates an accommodating system for raising capital.
- Blockchain will also result in low-interest rates and provide a more secure platform for lending.
- Trading will also become more transparent and result in more accountability.
- The information is stored on a decentralised platform making the identification process effortless for different financial institutions.
- If every exchange happens through blockchain technology, there will be no scope of unaccounted money which is a great advantage of having a decentralised platform.
Bitpesa, a digital platform for international exchange and payment, leveraged blockchain technology and successfully reduced the transaction fees to 10% of the most expensive region.
The process of replacing Fiat currency with cryptocurrency is going to be a tedious and time-taking process. We do know that “Lacasa De Papel” (Money heist) is one of the most treasured web series, but something like that in real life is indeed a nightmare for the banks as the physical transportation of money is way too risky. It is one of the reasons why this revolution in the financial system can bring a lot of benefits. Documents like wills and insurance need high specificity. Blockchain will solve the challenge of the verification of transactions and claims.
Banking is just the spark of the fire. It is going to blaze through other industries too, leading to a transformation of stocks exchange, crowdfunding industry, the insurance industry, etc.
Taxation will have an efficient system of records that will ultimately assist the governance. It will improve the verification process (regarding fines, insurance, ownership and tracking of automobiles as well.