If you have been following the news revolving around the financial industry, you probably have encountered the term ‘Blockchain’. The ever-increasing popularity of the term can be linked back to cryptographic currencies like Bitcoin.
Bitcoin has introduced us to a new technology known as the Blockchain, thanks to Satoshi Nakamoto’s idea of a decentralized financial system. This idea was made possible thanks to the Blockchain technology acting as a public ledger, recording all transactions and ultimately diminishing the need for a central authority or management.
So… what makes it interesting? According to an article on Forbes, Harvard Business Review has quoted the Blockchain technology as the next great disruptor, one that is even more likely to change the next decade of business than big data or artificial intelligence (AI).
Just like how the internet was seen during the early 90s, Blockchain is going through a process of massive transformation from a hard-to-access technology limited to engineers into a widely adopted technology, used by everyone.
During the recent Global Ecommerce Summit, the Blockchain technology along with cryptocurrencies were mentioned as the future of online payments. It is indeed the future of financial technology (Fin-Tech) and here are a few reasons why the Blockchain technology is amazing.
No central management/authority required
Middle men are simply not required anymore. The technology eliminates the need for a bank or an escrow. It records all transactions as well as validates them accordingly. However, the technology is not limited to financial use. It can be used for literally everything. You can record your contracts, properties, assets, and even your art works through the Blockchain. Everything that has been recorded cannot be undone and will remain permanently on the Blockchain. All those real estate agents, art dealers, middle-men contractors, and even some Government departments are now simply not necessary, thanks to the Blockchain technology.
Nowadays people prefer to use digital signatures when signing contracts due to its convenience. Contracts can be signed, encrypted, recorded, and transacted, all through the Blockchain technology.
No banks nearby? Not a problem
Many small towns around the world as well as some cities in third world countries do not have a bank. It can be especially difficult for people living far away from cities and Blockchain can help solve these problems. It provides a non-bank for the un-banked. People can transact and keep track of their money or assets digitally. All they will ever need is a phone and an app.
Secure and validate anything and everything!
The Blockchain technology can be utilized to store, secure, and validate anything and everything. Contracts, health records, intellectual properties, art works, and even your birth certificates! It is far safer than storing files on standard cloud environments.
It is absolutely transparent
The most charming factor of the Blockchain technology is perhaps in the fact that it is absolutely transparent. Completely open to the public, it prevents history from being re-written. This means whatever gets recorded on the Blockchain stays as it is permanently.
The technology is still in its early stages with limited use within the Cryptocurrency and financial industry. However, we are discovering its endless potentials as more and more companies move to adopt the technology. According to the recent Harvard Business Review article, Blockchain could slash the cost of transactions and reshape our economy. It is indeed, not only the future of fin-tech but the future of the financial industry as a whole.