Blockchain is one of the most exciting and talked-about emerging technologies. Providing the operational framework for cryptocurrencies, Blockchain’s potential has already been seen the world over – most notably in the remarkable rise of Bitcoin.
So What Is Blockchain?
Blockchain acts as a very secure method of data transfer; this makes it the perfect conduit for the buying and selling of digital currencies. The technology is unique in that every data transfer is permanently recorded with a ‘hash’, which includes the exact date and time of the transaction. This advanced level of security acts to allow traceability and prevent fraud.
For example, in Bitcoin, Blockchain works as a transparent ledger of all transactions; this information is stored on the computers of all Bitcoin users, making hacking almost impossible. This is in contrast with more traditional methods, where transactional data is stored on one centralised computer; this data is vulnerable to hackers who only need to infiltrate a single machine in order to access a mass of important information.
Blockchains bypass the need for intermediary verification; the data contained within the blockchain positively identifies the source of the transaction. This means transactions can be completed and authorised in as little as a few seconds.
Is The Hype Surrounding Blockchain To Be Believed?
Although the technology is still relatively ‘young’ and lacks widespread usage outside of cryptocurrencies, many experts view Blockchain as a fundamental part of the future in many industries.
Blockchain And Lending
The high levels of security and transparency within Blockchain give it the potential for successful adoption across many sectors, but it lends itself most clearly towards the financial industry – the future of which will be heavily influenced by the technology.
The process of financial lending will be positively impacted by the use of Blockchain technology. Both the speed and security of transactions are paramount for lenders and borrowers alike; the current state of the industry means people often have to wait to gain access to funds. Blockchain will speed up this process, improving customer satisfaction and reducing the need for human verification.
Blockchain has the potential to help companies to cut costs and further boost the efficiency of many processes. The use of the technology will also have the effect of boosting customer confidence in the security of transactions.
However, successfully integrating Blockchain within the finance industry represents a huge challenge and undertaking – not least in terms of passing stringent financial regulations. Nevertheless, the insatiable need for speed and security improvements within the industry necessitates the use of the most secure and up-to-date technologies.
Ultimately, the financial industry is built on trust. Banking customers’ trust can be wiped out in a moment through a system that is either flawed or inherently lacking. However, Blockchain almost literally builds trust through its high level of data security – the degree of which is visible for all to see.
It is evident that Blockchain will be crucial to the future of the finance sector; it is now a question of when and how implementation will occur.
Do you think the use of Blockchain in banking will have a considerable effect on your experience as a customer?