Blockchain: The Future of Banking

Blockchain Technology: the next stage of conventional electronic cash system

Date 07.04.2021

About Blockchain: The Future of Banking –

Blockchain technology and cryptocurrency have always been hot topics in the market since their evolution a decade ago. The idea of decentralization was probably the greatest thought in this digital world. As said by Bob Grefield “Blockchain is the biggest opportunity set we can think of over the next decade or so”.

Peer-to-peer electronic cash systems is always been appreciated by innovators in various fields. But, with the emerging of many crypto-currencies, Blockchain technology is now disrupting the conventional financial industry. Almost all renowned names are turning towards this technology for safe and secured transactions.

With all such hypes around Blockchain technology, one should indeed have a clear idea about it to sustain the competition. Well, now that you are here you are going to grab every inch of information about Blockchain and its applications. So, without seconds late, let’s dive in!

What is Blockchain? 

Blockchain is a decentralized system able to record information in such a way that it is impossible to hack, cheat or change. It can also be defined as an advanced distributed ledger system in which only approved and verified participants can become a part.

As the name “Blockchain” refers, every computer network forms a block, which is added to the ledger to form a chain. Consequently, there is no single central computer involved in it. Thus, none can hack or corrupt the system. Being secure and impossible to breach makes it one of the best ways of financial transactions.

Some characteristics of Blockchain which makes it disruptive in the modern era of digitalization are: -

1- A smart distributed ledger-

Blockchain is basically a smart and a well-developed ledger similar to an excel spreadsheet. But there are some key differences which enhance its potential to a whole new level. A few of such key changes include-

  • The data recorded in the Blockchain is unchangeable or irreplaceable and only new transactions i.e. credit or debit can be recorded
  • Encrypted and cryptographically secured with literally no chances of tampering
  • The ledger can be shared among multiple users and every participant can see the records containing every single transaction
  • Users of a Blockchain network can make a mutual agreement on which their company will work in future

2- A transparent record of the supply chain-

End-to-end transparency is probably one of the major benefits of Blockchain technology. A fully automated Blockchain can increase accountability and supports during disputes among different parties.

As all your previous moves are in front of you, you can make better business decisions to reach your business goals. Besides, the entire supply chain of an end-product is listed in this ledger which ensures fair trade practices.

3- Advanced support for business- 

When multiple attributes of a Blockchain are brought together, the real power of Blockchain technology is revealed.

Let us consider a scenario where Peter is a salesman of e-scooters that are from a startup company. If a customer asks for the authentication of the scooter, he will have every single piece of evidence of the supply chain to display.

Is Blockchain going to disrupt the entire traditional system?

Bitcoin and other cryptocurrencies included in Blockchain were quite famous since they emerged. But it was 2020 when the price of bitcoins smashed the market with an astonishing increase of 224% by December.

You must have come across some popular coins like Dogecoin, Etherium, Cardano and Stellar, etc. Recently, the world's richest man Elon Musk investing 1.5 billion on has sky-rocketed its market value. Experts say that the value of Dogecoin increased up to 26% soon after the announcement made by Tesla Company.  It turns out to be 50000 USD, the highest point ever seen in history.

Now, the price of bitcoin is ranging around USD 54,241.30 and is expected to increase twice the rate of the previous year. Increasing interest and awareness on the beneficial factors of BlockChain is the reason for this prediction.

Today, Bitcoin users are more than ever recorded before as more companies are starting to accept them. Besides, the use of Blockchain is proving the legitimacy of a business in the global market today. Recent statistics say that 1.1 million bitcoin wallets are added in the last few years. 

Reasons why companies are using this technology

The exchange of cryptocurrencies is not the only application of Blockchain Technology. The distributed and decentralized nature of this technology brings tons of benefits to several Industries.

  • Transparency

        One of the most significant characteristics of Blockchain is the open transaction ledger. The ledger holding every single transaction is visible for public addresses. Thus, every sector of a business is responsible and accountable for the financial systems.

With such a transparent system company can make employees responsible to work for the growth of the business. It also decreases the proximity of the company to the community and customers.

  • Increased efficiency due to decentralized system

        Blockchain is a peer-to-peer electronic system that doesn’t need middlemen for payments. Thus, unlike traditional financial services, this facilitates faster transactions with digital currency. If you are into real estate, Blockchain is probably the best cash system you can opt for.

The cohesive system of records and contracts can make the agreements crystal clear without any sense of confusion. 

  • Unbreachable security

          Yes, it is true. Blockchain is one of the few electronic cash systems that is Unbreachable. It is way more secure than any standard financial or record-containing system.

Each transaction made in the Blockchain network is encrypted and is linked to the previous transaction, thus forming a chain. Thus, it is quite impossible to alter the string which is formed by complex mathematical numbers.

Being immune to hacks, corruption, and falsified information, the decentralized system assures the complete safety of every single transaction. Thus, neither customer nor company needs to worry about their payments.

  • Authenticity and Traceability

        An audit trail works to trace the goods every time the exchange takes place and is recorded in the Blockchain ledger. This process of tracing prevents the chances of fraud in any business related to exchange.

Not only in the exchange-related business, but medicine industries can also use this system to track the supply chain to check authenticity. One of the best things about the decentralized system is that the end-user can have a clear track of authentic ownership over the period. Such a system can be highly efficient in the art industry.

By now, you are well familiar with all the tweaks of Blockchain technology and how it is superior to conventional financial or business-related systems. With all these benefits on a single desk, there is surely a possibility that Blockchain is going to rule the internet.

Overstock, the infamous company succeeded in their business by partnering with Coinbase, which lead them to gain international customers. As per recent statistics, overstock has witnessed a significant rise of 15% soon after they went for Bitcoin acceptance.

So, it is better to keep an eye on Bitcoin every single day if you are about to start a business or already in the market. IBM can help you in the digitization of your transaction through Blockchain technology. The tweaks of the Blockchain technology will surely help you in making an unmatched reputation.

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