Many consider Blockchain as a tool to trade cryptocurrencies. But only the learned realize that it is much bigger than that. The distributed-ledger architecture (DLA), the basis of Blockchain technology, is a dynamic digital financial instrument that has the ability to optimize and transform the financial sector.
The seller and buyer agree on terms of the database, and a digital ledger is developed that is beyond the authority and control of both parties. Blockchain, thus works in a more decentralized manner and bypasses the middlemen. Moreover, it also drives asset management details directly and only to relevant stakeholders. Chances of corruption and cheating are minimized, as Blockchain is a highly transparent system.
Savings are Huge on Remittances
Blockchain technology can help to reduce transaction costs. Along with financial efficiency, inclusiveness, improved operational speed and security. Overall effect of Blockchain technology on the economy is far-reaching and gigantic. Significant savings can be found mainly in cross-border payments.
Big Money for Blockchain
Big financial research centers and banks are investing big in Blockchain solutions for banking, as it is the future of the modern day economy. Research shows that Blockchain can reduce the operational cost of international transactions by 10%, consequently savings of $27 billion can be realized till 2030, making Blockchain a necessary tool.
8 Main Advantages Of Blockchain Technology Include:
Effective Cost Border Transactions: International migrants tend to send billions of dollars each year to their families. Third parties handle most of these transactions and charge the users for remittances. Moreover, disputes and delays are often observed. Blockchain eliminates third-party involvement, facilitating cross-border payments in terms of cost, delivery, and dependability.
Digital Currency: The technology can serve as a great tool to develop a digital currency. With cryptocurrencies banks will have a great option for a globally accepted trade entity. This can improve customer satisfaction and add more flavor to banks’ outlook.
Enhance Security and Privacy: Achieve digitally encrypted security and privacy for your assets with single-source truth platforms. Besides data integrity is never compromised in Blockchain.
KYC/AML Attributes: Advance identity features such as (Know your Customer) KYC work perfectly with Blockchain, loading all the information in one encrypted database. This feature provides user authenticity and as well as data privacy. Therefore, solid and protected KYC, as in Blockchain, is a vital tool that makes the Blockchain inherently AML (Anti Money Laundering). A feature that makes Blockchain economically viable and legitimate.
Cost-Effectiveness: Achieve the most cost-effective financial mobility with more direct transaction facilities that can reduce the operational costs by 10 times.
Simplified Processing: Based on a simple architecture that operates in real-time, achieve an easy optimization system that can be tailored to suit user demands.
Suits Well With Modernization: Develop a highly flexible and scalable system. The system is so efficient that it is adaptable from micro to macro level, without compromising system quality.
Private Systems: Blockchain aims to provide more peer-peer linkage. Private systems can be developed for a more restricted and controlled data sharing.
Redundancy: The system operates in a fail-proof mechanism. So even if a single node of participant goes down, the system will continue to operate without compromising the Blockchain in any way.
Timely Error Handling: The processing time of Blockchain is very fast. It can check for errors and fraudulence, before the actual transaction takes place. This helps to check corruption and as well as wrong transactions.
Blockchain has a solid potential to dominate the financial sector. A lot of research activity and IT outsourcing has been put to bring Blockchain into the masses. You never know when Blockchain may become the go-to tool for global trade, retail, and commercial banking. Even possible that it might revolutionize the banking sector completely. Fingers crossed.