The blockchain technology has gained a lot of popularity in the recent years. The blockchain is expected to disrupt the entire banking industry in the upcoming years. How is the blockchain convenient for the customers?
– Peer to Peer Transactions
Blockchain provides the platform for peer to peer transactions without the involvement of a third party such as a central bank or any bank.
– Global Payments
People can make payments to anybody from anywhere in the world using the blockchain technology. A user only needs the cryptocurrency wallet and an Internet connection to store, send and receive the cryptocurrency.
– Low Transaction Cost
The transaction costs with the blockchain technology are really low as compared to the transactions costs involved with the traditional methods used by the banking industry. There are no currency conversion charges involved either.
– Real-time Transfer
The real-time transfer makes using the blockchain technology very convenient for the users. They don’t have to wait too long for settling the payments.
– Identity Protection
Users don’t need to share their data with the person or organization if they are using blockchain.
How does blockchain work with the banking industry?
A blockchain is a digital ledger that stores all the transactions in the form of blocks. The transactions made on the blockchain needs to be confirmed before they are added to the blocks and the blockchain. Banks have to process a large number of transactions every day. The blockchain is expected to be used for the international money transfers. Banks could also retain the customer data on the blockchain which will help them safeguard the consumer data from leakages and theft. The banking industry will start using the blockchain technology as it is far less expensive and significantly faster than the technologies banks use today.
How safe is the blockchain technology?
As we know that the digital blocks store the records of transactions. All the blocks are connected to the entire blockchain. It makes tampering with a record extremely difficult for the hackers. To change a record on the blockchain, the hacker will have to tamper the entire block and all the blocks that are linked to that particular block.
All the records on the blockchain are secured with the cryptographic techniques. The users have the private keys assigned to their transactions. The private keys work as digital signatures which makes hacking even more difficult for the hackers. Even if a hacker manages to change a record, the private key will not be valid the network will be able to identify the hack instantly.
– Point of Failure
As the blockchains are distributed across a large peer-to-peer network, they are kept in sync and being updated constantly. As blockchains are not contained in a single location, they cannot be altered using a single computer.
As there is no one point of failure, the hacker would need a very powerful network of computers to access the entire blockchain.
Blockchain For The Future
Blockchain can work as the payment gateway for settling international transactions at a fraction of the current transactions costs and time.
For instance, Ripple(XRP)
Ripple Labs is working to leverage the blockchain technology for quicker banking transactions across the globe. Ripple is supported by some very large financial institutions like American Express, UBS, RBC, etc. As the Ripple is not decentralized like other cryptocurrencies like Bitcoin or Ethereum, many people are averse to it. However, Ripple can revolutionize the entire banking industry as they can use the technology to settle transactions globally.
For Instance, Cryptoforce(Crypton)
Crypton uses the blockchain technology for data protection, loss of data and safe transactions. It uses the proof-of-stake mechanism for the creation of new blocks on the network. The miners are rewarded for confirming the transactions and makes hacking even more difficult. This added layer of protection makes the Crypton a secure investment for people who buy the cryptocurrency or invest their time in mining.
To Sum Up
Some experts claim that how Internet revolutionized the media industry, blockchain will do the same to the banking and financial sector. Blockchain can save huge costs associated with the transfer of funds. It is very convenient for everybody from consumers, banks, financial institutions, and businesses.