It may not be an exaggeration to say that "security", "finance" and "trust" go hand in hand! Since finances are a money issue, care must be taken not to jeopardize the security of funds. As the book containing all transactions is the only reliable source, the "trust" that all parties involved place in the legend maintainer is another important aspect.
When we introduce the blockchain – the secure, immutable and transparent book – the financial department sees unfathomable magnification in a geniality through the blockchain lens.
As we saw earlier, the traditional way of keeping financial records was in a big book. The problems of this method are the intentional breach of trust – financial institutions with malicious intentions and unintentional errors – inadvertent erroneous entries as they are managed by the human being.
In a decentralized general ledger system, there is no single centralized party that has the power to write or modify the general ledger. In fact, once a block in the general ledger has been created with the transaction data, there is no way to go back and edit the details.
This decentralization and automation brings speed, confidence and security, important assets for financing and transactions in today's world.
Benefits of blockchain in finance:
Blockchain has the skills to implement existing financial systems, introducing many benefits in terms of trust, transparency, efficiency and, last but not least, inclusion.
Costs – time and money – Sending money from one bank to another across international borders can take days and cost a lot – because of its centralized nature. However, with a large distributed book such as blockchain, the transaction can be performed relatively faster and at a significantly lower cost. This potential has been realized and recognized even by global banking giants such as JP Morgan, who operate their own semi-centralized private blockchain.
Project financing – There have been instances where potential companies and projects have choked and failed due to lack of funds. The process of funding your project in the current VC or IPO system seems like a tedious process. However, with blockchain technology, you can finance your project using a number of methods such as ICO, STO and IEO. Technology breaks not only bureaucracy but also international borders – budding startups in remote areas of the world have had access to funds and have developed solely because of the blockchain.
Trust – This little word has a lot of meaning and meaning. There have been allegations that the current financial system works for the benefit of a few. With the blockchain and the immutability attribute that it brings, it is always possible to track transactions and eliminate opportunities for bad practice. The blockchain, with its global reach, has the potential to operate in the best possible state of health, while being completely immune to monetary manipulation by governments.
L & # 39; inclusiveness – All you need for the blockchain to work is a device with minimal computing power – conditions that can be fulfilled more than conveniently by a smartphone. This would mean that the blockchain has the potential to even make the classic brick and mortar obsolete. The Blockchain can bring banks to the most remote areas of the world – all you need is a mobile device.
Private blockchains have emerged as bridges between banks and blockchains. While the immutability, security, and transparency of technology are kept in their default form, the "trust" factor is taken outside. Participants must believe that all members will act according to the rules.
"Trust" has always been in this form for the banking sector, and if the benefits of speed and security can be achieved, why not use private block chains, right? It may not be the "all", but it's sure "something" in the unification of the big Bs – the bank and the blockchain!
What does the future hold?
From the events occurring up to now, the blockchain for finance is not a fad, but a hard-hitting and influential reality. Larger banks such as JP Morgan, technology providers such as IBM and even the Malta and Germany stock exchanges have accepted and adopted the blockchain. The industry, valued at around $ 200 million, will reach $ 3 trillion by 2023, according to Cointelegraph.
Blockchain for finance was then a fashion, now a reality and will soon be mandatory!
The wide range of Blockchain App Factory services, including trading, encryption, OIC and STO, will keep you in the game and stay relevant in a world where finance and blockchain are inseparable. !