Introduction to Blockchain Technology
When people experienced a new wave of digital currency, they became curious to know about it. They began searching for various topics like the best STO to invest in, how to buy Bitcoin anonymously, which are the best cryptocurrency exchanges, what are airdrops, ICO, and so on.
Although there are many sites to know about all these topics, still, they are unable to find the desired results for their search. In that way, Cryptoknowmics proves to be the best site to provide all updates about Bitcoin, altcoins, or blockchain technology.
Most of us think that Bitcoin is the one and the only factor that determines the success of cryptocurrency, but it is not so.
The digital ledger behind the running of the latter cryptocurrency also has its lion’s share of success. Yes, I am talking about blockchain technology.
If you are newly introduced to this digital monetary field, then you need to have a clear understanding of this crypto technology.
Blockchain is the digital ledger technology that functions in keeping the record of all transactions, called as blocks to various public databases, called chains.
One needs to understand that Bitcoin might not function without blockchain technology, but the latter can continue to operate without the crypto coin.
Today, the importance of this digital technology is acknowledged by several sectors, be it textile, education, health, commerce, advertising, marketing, fashion, pharmaceuticals, and even banking.
Now, you may wonder, how does blockchain technology be of any use in the banking sector, when it is itself the technology behind the digital currencies that don’t follow any of its regulations.
It is indeed a fact that digital currencies restrict the interference of central authorities like banks, but that does not mean blockchain will also apply to it.
How It Can Be Useful For Banking Sector
Blockchain is a technology that is not confined only to Bitcoin, it can be useful for other operations also. It is really useful for the banking sector. If you don’t believe it, then let me explain it to you.
Expediting Payment Speed
Blockchain technology can be much useful for banking sectors when it comes to do payments in a much speedier way.
Besides this, it will also benefit at minimal cost for the paying process. It would initiate banks in coming up with a different mode of providing service to their customers.
Also, it will make them competitive with startups equipped with unique financial technology. With the acceptance of blockchain technology, there would be no compulsion for the need for a third-party check. Moreover, it would speed up the timing of processing transfers for regular banks.
Keeping Track Of All Transactions
With the help of blockchain technology, tracing the transactions publicly will become possible for the banks. It would curtail their dependency on regulatory bodies akin to SWIFT. Transactions on the public blockchain would be settled straight away by banks.
Trading Of Assets
Blockchain has the potential to disrupt or say reform the financial markets. And it is possible with the creation of digital assets having a decentralized database.
Cryptographic tokens might become the medium on which asset rights would be transferred by the blockchain technology.
And it would be done with the help of digital assets like BTC and ETH. Nowadays, companies that have been using blockchain might come up with a new solution to the tokenization of precious assets like gold.
There are also possibilities of real estate getting tokenized. Cropping the role of middleman will lead to minimizing the fees for asset exchange and can even expedite the processing speed.
Would Speed Up The Process of Identity Check
It has been noticed that the process of verification makes consumers very irritating. It is all because they have to go through many stages.
But banks cannot just omit this process of checking especially for the financial transactions done online. But blockchain technology is accepted wholly by the banks, then such hassles will no longer bother consumers and firms.
The digital ledger would simplify it with the utilization of ID checking once again to apply to other services. The best innovative example to quote is ZKP. It stands for Zero-Knowledge Proof. This mechanism has been adopted by several countries and big businesses.
Kudos to blockchain technology, that would allow users to give their identification according to their own chosen way. It will require a one-time registration.
Service providers won’t have to re-register themselves. This would certainly ensure safety for the information on it.
After reading some of the possible functions of blockchain, now you must have been convinced that this digital ledger will prove useful for the banking sector.
Even though banking experts do acknowledge the importance of blockchain technology, but according to them, it will have to come at par with many factors, until it is finally accepted.
And for it, the development of the framework is necessary for the banks to run this worldwide technique. When it will be accepted on a wider scale, only then it will become possible to see favorable changes in the banking sector brought by blockchain technology.