How can the Blockchain Change the Financial Industry?

The technology most likely to change the next 10 years of business is not the cloud, Big Data, Artificial Intelligence, social media or even robotics. It is the blockchain. 

The blockhchain technology is complex, but the idea is simple. It is a vast, distributed ledger that runs on millions of devices and caters to everyone. It moves and secures information, money, titles and anything of value. It establishes trust through mass collaboration and clever code. In a word, it ensures integrity and trust between customers, partners, suppliers and even strangers. Thus, with the technology, it is difficult to cheat.    

Today, the financial industry is the most centralized institution. It is also the last to adopt technological revolution. Many financial services are monopolized and are elusive of disruptive innovation. The industry runs on outmoded technology and follows regulations imposed since the 19th century. It is fraught with problems, which make it insecure, and nontransparent to stakeholders. The financial industry makes our global economy buzz; thus, it needs to break free from contradictions and uneven developments.      

The blockchain can fundamentally change the financial industry in many ways:

  • Reducing costs
  • Making complex financial transactions easier
  • Making a viable new market from the world’s unbanked
  • Improving regulation
  • Promoting transparency

Indeed, the blockchain is already making a big impact to the financial sector. The increased security it provides will make it a popular store of money.

The technology holds great promise to revolutionize the financial industry – for good. It can liberate many financial services from the confines of old institution. It will foster both competition and innovation. With the blockchain, people can become more connected. They can participate in financial activities and get a chance to a prosperous life. When everyone shares the same distributed ledger, settlements occur instantly. Billions will benefit, empowering entrepreneurs all around the world.

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Blockchain and Its Effect to the World

Once information is updated on the blockchain, no one can attempt to alter or forge the records.

Blockchain is a disruption that will have the greatest impact to the financial industry. Big banks and some governments are already using the blockchain to revolutionize the way data is stored and transactions are processed. Representing the second generation of the Internet, it holds a huge potential to transform the industry and the world extremely. Whether we like it or not, we simply have to embrace the technology.

As a distributed ledger, the blockchain aims to increase security, lower costs, and eliminate errors and failures. It enables a reconciliation of digital records in real time. Unlike the first generation of Internet, it will transform:

  • insurance
  • risk management
  • funding and investing
  • moving value
  • authenticating identity
  • reputation
  • lending and borrowing
  • exchanging value
  • storing value

The technology does not only store and move information securely, but also money, titles, equities and other values.

It is already known that the blockchain keeps a permanent record of all transactions over the network. It can be used to verify transactions and cryptographic keys. It does not only allow us to store information but also gives us complete control over it. It also helps us verify the timestamp, validity and status of entries on the register. Furthermore, it makes it impossible for anyone to make changes to any information in the blockchain without explicit permission from the entry or the creator.

Through the blockchain, trust is established with clever code and mass collaboration. It is a platform of transparency with regards to structured recorded information.  It is an open source code, which everyone can download for free and develop new tools to manage transactions online. In a word, it holds the potential to unleash numerous new applications and unrealized capabilities to transform many things.

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