It’s no news that technology is one of the most advanced mechanisms any economy could harness. With technology, you can make very excruciating stress-free, facilitate your activities, and even make some problems appear simple. Thanks to technology, we now have cryptocurrencies that have been developed to overtake traditional fiat. Technology in the crypto community is termed blockchain, the bedrock of all cryptocurrencies, old and the ones to come. Blockchain is changing how money is distributed in the private market and also everything regarding payment transactions. So it’s a big player in the financial sector. Over the last decade, blockchain technology has not only gained the attention of investors, but has put the central governing body of traditional fiat money on its toes. With blockchain, several amendments could hit the financial sector of every economy and, if not properly managed, could crush the whole existence of fiat money.
The big question now is, how can blockchain technology help revolutionize the crypto community? Blockchain technology provides the bedrock for cryptocurrencies like Cardano, Ethereum and Ripple. So, say, for example, you buy ripple, you have just invested in the blockchain technology, and with several investors joining the crypto community, it becomes impossible for the traditional fiat to outperform crypto.
How do blockchain works?
Blockchain is primarily an individual chunk of data having series of related transactions arranged in a given order. The blockchain is such that it works on a programmed ledger without a centralized body. With blockchain, there’s easier access for banking as efficiency and transparency are key factors. With blockchain cross-border transactions are easier, with an incredible transaction speed.
Typically, a blockchain follows this order;
- Customer A wants to send money to B
- The transaction is recorded in a database as a block, token or coin.
- Every party in the network gets the block broadcast
- The block gets approved by those in the network
- The block is added to the transaction chain after it has been validated, providing a transparent transaction record.
- Money is moved from customer A to B.
It should, however, be noted that these processes are automated and are executed in less than a minute after transaction initiation.
How can blockchain improve banking processes?
As explained earlier, blockchain technology is an integral part of the revolution in the banking sector. It’s the basis on which the revolution is pegged. With blockchain comes cryptocurrency, which makes cryptocurrency the number one way blockchain can help revive the banking system.
Cryptocurrency (digital assets):
One of the major reasons’ blockchain will help modify the banking sector is via the introduction of cryptocurrency. Since cryptocurrency won’t run without blockchain technology, we’d better begin moving our fiat money into digital assets. With digital assets, you don’t need to worry about failed transactions or charges; in fact, your assets don’t stay the same value as what you bought initially, it’s either they increase or decrease. This makes cryptocurrency quite volatile. If you want to move your fiat into cryptocurrency, buy ripple, or Cardano, Bitcoin or Ethereum as they are an excellent store of value and in the top 10 cryptocurrencies.
In a nutshell, cryptocurrency is one of the first cards blockchain is playing into the centralized banking system to cause a revolution into the world of decentralization.
The transition from centralization into decentralization:
Another important reason why blockchain would improve the banking sector is the transition into decentralization. With blockchain comes decentralization. Recall that decentralization is also a key player in the blockchain. With decentralization, there won’t be any need for a central governing body to keep transactions coming in and out, meaning every transaction is automated with 100% assurance of transparency. Decentralization also means every transaction is recorded on an open-source ledger, where transactions in a particular block can be monitored. However, centralization has made the financial sector breed incompetence and inefficiency. But with decentralization there’s no room for human error, as every transaction is carried out automatically. So, blockchain will ensure this transition with more upgrades and deployment of new cryptocurrency in the crypto community.
The banking sectors are taking note of the revolution brewing from cryptocurrency and blockchain technology, and while some countries have banned all transactions that had to do with crypto, others are setting up limits and restrictions on crypto-related transactions. Nonetheless, the future of money seems to drift towards flavoring cryptocurrency than fiat. In the next couple of years, bitcoin and other crypto-assets are projected to be up-ed at high prices, making blockchain technology a big game-changer in the financial sector.