The ever-increasing popularity of Cryptocurrencies has also helped shed light on what is known as the Blockchain technology. It is what helps decentralize Cryptocurrencies like Bitcoin as with its ability to act as a public ledger, recording and verifying transactions, and ultimately diminishing the need for a central management system.
The Blockchain technology is quoted as being the “next great disruptor, one that is even more likely to change the next decade of business than big data or artificial intelligence (AI)” on a recent article published in the Harvard Business Review. It is certainly going through a similar phase to what the internet experienced during the early 90s: slowly transforming from something that was limited to engineers into a widely adopted technology used by the masses.
Here are a few reasons why the Blockchain technology could really be the future of Financial Technology (FinTech):
Diminished Need for a Central Management System
Part of the reason why the Blockchain technology is considered innovative is its ability to completely diminish the need for a central management system or a central authority. It allows connected/synced applications to communicate data (information) directly. This brings about a truly peer-to-peer environment whereby users can transact with one another directly. All transactions on the Blockchain are recorded and validated by the crowd, accordingly. The crowd (people) acts as the sole regulator.
Great Financial Applications, Great Potentials
The first application on the Blockchain was Bitcoin, introduced by Satoshi Nakamoto, in a bid to decentralize our monetary system. However, more and more companies and institutions are realizing the true potentials of the Blockchain technology, which goes beyond the application of currencies. Many Blockchain projects are helping people around the world to easily utilize and integrate the Blockchain technology into their existing financial data-keeping and data-recording systems.
For instance, Proof Suite has recently launched a platform whereby anyone can upload, record, and tokenize just about anything such as contracts, properties, intellectual properties, health records, artworks, and even invoices on the Blockchain. Projects as such are helping many companies quickly adapt to the innovative technology. Through ‘decentralizing’ existing financial data-keeping and data-recording systems, companies save papers, labour (which can be focused on more important areas), and of course, money.
Whatever gets recorded on the Blockchain stays as it is permanent. Any history – recorded information – cannot be forged or re-written. Security and transparency are guaranteed.
Many people today do not have access to banks simply because there are no banks around them. This is especially true for those who live far away from towns or cities. Financial applications such as Bitcoin on the Blockchain technology simply diminishes the need for a physical bank around to open a bank account and send or receive money.
Although it is true that the technology is still in its early beta stages with limited use cases within the Cryptocurrency industry, many projects are being introduced to help expand the use of this innovative technology. Blockchain could slash the cost of transactions and reshape our economy. It is indeed, the future not limited to financial technology but the future of the financial industry as a whole.