by Apoorva Komarraju
July 1, 2021
There’s More to Blockchain Technology than just Cryptocurrency.
Blockchain technology has taken the FinTech industry by storm. This new disruptive technology is best known for powering cryptocurrencies, making it a recent buzz in the finance industry. While this is still a new technology that has the ability to leverage several services, the FinTech industry can transform its traditional practices and upgrade to modern techniques that will safeguard the most important industry in society.
Here are four ways blockchain technology is set to revolutionize the FinTech industry.
1. Creating a Digital Ledger
In a physical ledger, transactions are noted down on papers that are time-stamped and annotate. Blocks also record transactions in a similar way. Blockchain technology has the ability to digitally note the entire cycle of transactions, time-stamp them and record them chronologically. Having an accurate and precise record of every transaction is essential for the banking and accounting industries. By recording the transactions automatically, blockchain technology significantly improves the efficiency of the process and reduces the risk of anomalies.
2. Secures Transactions Against Fraudulent Activities
Blockchain technology is decentralized, which means no one can access the blocks and alter them. Every single transaction is recorded on a unique node that cannot be tampered with at any point. This makes every record extremely secure. The only chance of hacking comes when a person owns more than 50% of the nodes in a chain, but that scenario is unlikely.
At present, a value of about US$1.8 trillion is stored in blockchain, with Bitcoin alone amounting to US$ 1 trillion of it. If blockchain could be hacked easily, cryptocurrencies would be the ultimate loot for cyberattacks.
3. Elimination of Third-Party Interference
When multiple parties are required to validate a transaction, there is a chance for things to go wrong. With blockchain technology being so secure, payments can directly reach the said vendor to purchase goods and services.
4. Restores Monetary Power to the People
The most prominent application of blockchain technology is in cryptocurrencies, which is basically holding the value of your money in digital coins without a bank. If you have invested in cryptocurrency, you can hold the crypto coins in a digital wallet with a private key that is only known to you. There’s no other financial institution holding your money. This is one of the main USPs of blockchain technology.
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