Blockchain technology is now a hot tech. Cryptocurrency, Bitcoin, Ethereum, etc. work through the cryptocurrency blockchain, making it one of the most important recent innovations in the financial field.
In this article, I will talk about the four main areas by which blockchain fintech is revolutionizing.
It creates a digital ledger by Blockchain technology
Blockchain time-stamps each transaction and records them chronologically. So that a blockchain can digitally log the entire life cycle of money. As it is processed and changed hands.
Automated recording greatly improves the efficiency of the process of recording blockchain transactions, reducing the amount of time required to record manual ledgers and reducing the cost of doing so.
It protects against fraud
Blockchain is decentralized, which means no one has control of the chain. It cannot be changed in any way. Using distributed laser technology, every transaction, or block. It is recorded through a node that can be any smartphone, computer, or server.
There is nothing to link the nodes. Although there is still little chance of blockchain being hacked. Even if someone owns more than 50% of the nodes in a chain.
The combined value of all cryptocurrencies available in 2021 is over $ 1.7 trillion, while Bitcoin is worth over $ 1 trillion. As a fully digital currency created with code, the crypto market can be a lucrative earner for any hacker.
But since Bitcoin commence as of the world’s first cryptocurrency and blockchain in 2006. The chain has never been hacked due to its decentralized structure. This is where the potential for security comes in and this is where the blockchain has the greatest potential.
This removes the third party from the transaction
Increased blockchain security offers multiple advantages. One of which is that you can bypass traditional counterfeiting methods. Because multiple parties are required to verify transactions here.
Each financial transaction requires a separate authority to verify it, whether it’s Visa or American Express or a transaction from your bank.
In 2020, multinational investment banks and financial services provider, Citigroup, mistakenly paid $ 900 million for failing to verify their validity.
Such errors in the blockchain would be impossible due to the decentralized network. Transactions in a blockchain are automatically verified. This eliminates the need for third parties or middlemen. Through a blockchain, we are able to get rid of those steps and pay for the products or services we need most.
It makes money management democratic
The most high-profile use of the Fintech blockchain is a cryptocurrency, which allows you to keep your money without a bank. Those who purchase Bitcoin, Ethereum, or any other coin can keep their currency in their own digital wallet. Wallet-holders have a private key.
Which they must use to send and receive crypto. Those who have the key are the sole owners of the coin. There is no bank holding money as opposed to the conventional currency. This is where the real value of Fintech’s blockchain lies.
Bitcoin and other cryptocurrencies give you the freedom and ownership that you don’t have to rely on or trust anyone else with your money.
Conclusion
However, there are still some risks to keeping money like this. There is no way to get your money back. And you will be solely responsible for That is why many cryptocurrency holders choose a custodian to save their money, who keeps their currency like a bank. The largest of these services is Coinbase.
They have more than 43 million users and $ 90 billion on the platform In short. The real advantage of blockchain is that it allows everyone to control their own money using cryptocurrency.
When people really start taking ownership and responsibility for their own assets, it will become a huge threat to the banks.
Although blockchain affects the financial industry in many ways, blockchain technology has the greatest potential to bring about a huge change by challenging traditional practices in banking.