E-commerce has truly revolutionized the way you think about money. With the arrival of so many platforms of digital money transaction, you can now easily purchase online by being assured of so much trade security. However, you must be oblivious how slow the process is in terms of communication. It takes days before the money passes through clearing hoses, central depositories and finally, corresponding banks. In short, while you receive and transfer the money within a flash, it does not happen like that in the real process.
However, Blockchain has arrived at the fray to solve this issue. It used to be the base of Bitcoin where it can communicate between computer networks regarding transactions using a superfast peer-to-peer networking system. While the financial sector uses the technology most widely as of now, its ability to augment transaction speeds can be utilized to do much more. However, Blockchain can boast of serving some big names like Deutsche Bank, Barclays Bank, NASDAQ and US Federal Reserve etc. So, you can understand how significant this technology already is.
The advantages of Blockchain
Blockchain is an extremely trustworthy system because of zero third party involvement. You can easily verify your transactional details without risking a case of backdoor transaction and more importantly, intervention of unauthorized forces. Because of that, it takes huge amount of malicious force to attack the database if it wants to tamper the data. Thus, data centers are also safe from such attacks.
As it is with most technologies around the world, the control is being given to the user as much as possible. Similar is the case with Blockchain too as you can now view and control every single transaction and related information. With such high level of transparency, it is obvious that more users will get attracted to it.
Blockchain is exceedingly fast considering it takes days to settle financial transactions between two different banks while it takes minutes in Blockchain. If this process is adopted globally, huge amount of energy and transportation will be saved that will enhance the efficiency of the process manifold.
Once the back office cost gets reduced and the third party intervention is eliminated, the cost comes down automatically. Then, you can easily reduce the transaction costs and banks will require less force to govern the process. Audit costs will decrease immediately and as a result, banks will now be empowered with greater chances of providing financial products at lower costs.
In fact, Blockchain can have significant impact in fields beyond the financial sectors. Given its ability to transmit data exceedingly fast without interventions, it can be used further in gaming and streaming, supply chains and transmission of EMRs or electronic medical records. So, it is a technology that is here to stay and significantly change the world of data transmission and sharing.
Problems and limitations of Blockchain
Blockchain, despite its insane popularity all of sudden, is not without its critics. Quite a few big names have expressed that the proposed Blockchain revolution will not be permitted simple because banks will not be able to profit from transactions if Blockchain becomes a pervasive reality. Often, banks use outdated technology for transaction and implementing the technology will require a completely redressing of the whole system, which can be a Himalayan task for some of the biggest banks.
More importantly, the hubbub regarding the Blockchain does not mention one extremely important word: security. Blockchain is extremely secure and it is precisely why it is gaining so much attention. However, utilizing the security advantage requires the banks to look beyond the simple equation of money. The amount of bureaucratic red tapes that Blockchain will ruffle is simply the reason why it is not being accepted wholeheartedly and globally. While the investment is huge, whether such investment brings in effective changes depends on the fields that will implement the technology. As of now, hopes are yet to flourish.