Why Blockchain will end banking industry as we currently know it.
Updated: Jan 4
Within the last few years, you have heard of Bitcoin and cryptocurrencies. The term "blockchain."
Blockchain is a type of digital record that uses cryptography to secure transactions through decentralization. The blockchain applications vary, but the potential is excellent. They applied for many different kinds of events that must maintain their integrity. Some examples are medical information, political or historical events, and financial transactions, to name a few.
When it comes to financial transactions, Blockchain could become the wave of the future. Some people even believe Blockchain may end banking as we currently know it.
The main problem that continually plagues our current monetary system is theft. Paper bills, metal coins, credit cards, and other payment forms are all susceptible to criminals who wish to steal them. Also, these transactions are vulnerable to forgery.
However, completing the same transactions through
Blockchain would make them secure. In fact, due to Blockchain's very design,
any financial transactions conducted through its use should be safe.
Banks do offer a degree of protection when it comes to credit card fraud. Many will cover your losses if you are cooperative and report any card loss within 60 days.
But what if you could prevent credit card fraud from happening. Blockchain technology offers us eliminating the need to use the bank at all, let alone to cover those losses.
Eliminates the need for Banks
Eliminating the need for banks is a one-way Blockchain could end banking as we currently know it. Using Blockchain, you could complete the exchange of money without using a centralized server.
Information, such as financial transactions, in a blockchain is not only shared but continually updated. Because it is not held in a single location, you do not have to go through a bank to exchange money.
Blockchain will end banking because it saves time.
Imagine yourself in a store where it takes several minutes to complete your credit card transaction when you pay your bill. Now imagine yourself using Blockchain to pay for your purchase. It would go through almost instantly.
What is the reason for this difference? A computer located in the store you are in no longer has to "talk" to a bank or other financial institution to complete your transaction.
International transactions, the potential for time savings in these transactions is apparent. You would no longer have to convert currency through a bank to complete financial exchanges.
With people and businesses going paperless, the theory has yet to be put into practice in many instances. Truly going paperless, though, would be possible with a blockchain. Since all of the information is shared over many computers, there is no need to send data to and from a bank.
The savings both lowers costs and eliminates the need to use a bank. Blockchain may end banking as we currently know it. It may be only a matter of time before banks become obsolete as we know them today.
Source: Kayla Sloan & Lawrence Cummins