In 2017, a total of $250 trillion in international payments was performed worldwide. These payments, have generated an excess of $200 billion in revenue for the banks sending/receiving the sums.
- International money transfers take an average of 3 to 4 business days to be completed successfully.
- Huge manpower is required to record transactions and keeping books on both sides of the transactions
- Prone to human errors
- Lack of transparency, especially with the advent of black hat hackers and other bots.
Here’s why blockchain and cryptocurrencies are the future of transactions.
1. Transparency in all records
Because of the relationship between all blocks, the information in a single block cannot be altered without changing all subsequent blocks in the chain. Along these lines, blockchain technology produces a dependable ledger without requiring record-guardians to know or confide in each other, which eliminates the dangers that come with data being kept in a central location by a single owner.”
Blockchain technology fosters trust – Blockchain, basically, is “an open, conveyed record” that can record exchanges between the two parties efficiently”.
In a blockchain, information is hosted on a decentralized peer-to-peer network, instead of a centralized server.
“Transparency and decentralization are the most impressive features of blockchain that establish trust, providing a paper free way to establish ownership of information or even money!”
3. Replacement of third party intermediaries
A simple act of an online transaction might look simplistic in nature but requires a huge cumbersome process of managing books and accounts on both sides of transaction. This requires manpower, viz. accountants and book keepers to ensure that all transactions are up to date. Having a peer-to-peer network allows you to cut some slack on these intermediaries and reduce human error.
4. The potential is immense
The business world is largely governed by huge and speedy transactions, every second. The potential for blockchain technologies and cryptocurrencies are immense. Once a peer-to-peer model is adopted, the banks will enjoy tremendous benefits as reduced costs on transactions, delays and general complexity of the transactions. Since banks today verify all transactions manually, this problem is solved when we adopt blockchain as a means of digital transactions.
From insurance to supply chain management to finances, the potential for blockchain is incredible and the years ahead look quite positive for this disruptive technology.
5. Worldwide adoption
In the financial sector, enormous banks like Barclays are progressing in the direction of embracing blockchain, the innovation behind Bitcoin, to make their business operations faster, more efficient and secure.
The technology also finds use in supply chain management as it records transactions in a transparent and decentralized manner.
6. Compatible with Internet of Things (IoT) devices
By the year 2020, IoT device market is anticipated to reach 50 billion.
Through integration with blockchain, these IoT devices will acquire the much need security levels as companies using the devices can track their products and they will have the ability to exchange information easily.
7. Blockchain can be used both privately and public
A public blockchain like Bitcoin allows anyone around the world to be a part of their peer-to-peer network. However, the public system takes much more time compared to a private group where a single entity decides how much transaction should be carried out in a given instance.
It is without a doubt that blockchain is disrupting the world with its transparency and swiftness. As with all the latest technological breakthroughs in the world of technology, many countries have been a little conservative in their approach to adopt this technology. However, as more and more industries and key players adopt blockchain in digital transactions, the rest will reluctantly embrace the change like always.