Blockchain the – immutable, encrypted, decentralized – account has a capacity of making every centralized process, activity, and institutes fully independent. This means we can eliminate middlemen, government, and churn. Therefore, streamlining every business, governance and non-profit activity. While this sounds astounding it is yet a faraway dream despite everything we are still attempting to make genuine moves. In the midst of all the developments circulating around blockchain, there is a lot of confusion about the future of this technology.
With blockchain peer-to-Peer (P2P) technology we are moving into a new digital generation that has the capacity to change finance as we know it. The future of finance could be without banks but with transactions approved automatically in seconds or minutes, thereby reducing price and expanding efficiency.
Of all the captivating new technologies that have surfaced in recent years in the financial service department, the best option for being a real game changer is the technology that enables decentralized cryptocurrencies, known as “blockchain”. The first and most popular of these currencies is Bitcoin, which appeared in 2009.
All Bitcoin transactions are carried out peer-to-peer and thus outside the control of any central entity, whether commercial or governmental. This lack of oversight has made Bitcoin a famous means for buying contraband drugs and weapons on the dark web, especially on sites such as the bad and now defunct Silk Road.
The original intercessors for Bitcoin were libertarians and cyber-anarchists, people who chose it solely because it removed the need for banks or other middlemen. Few envisioned in the early days that blockchain, the technology underpinning Bitcoin, could have usefulness in conventional financial services.
2015 welcomed huge interest in blockchain technology. Over 1 billion USD was invested in Fintech startups that could potentially distort the big financial activist with services such as bank transfers and peer-to-peer loans.
Blockchain technology also captured the attention of the big activist themselves, and it became a topic of discussion in Roland Berger’s digitization initiatives like Terra Numerata.
A survey carried out by some experts in the digitization prospects in Switzerland found that crypto-technologies and blockchain had the third greatest influence in digitization in coming years, after wealth management and security/digital identity services. Yet those interviewed revealed that they were uncertain in the direction that the technology would take. “We really have no idea what this whole thing is going to turn into,” the director of the MIT Media Lab disclosed.
On the one hand, it has the ability to increase gain by introducing greater automation into bank transfers, thus delivering more efficient service – a report suggests savings of up to USD 20 billion a year for banks – while on the other hand, “the ability to process transactions directly between parties… is risky to traditional banking.”
Transaction costs are reduced, typically free for the recipient and only a few cents for the sender. In essence you only need a computer software: a bank account is no longer required.
The importance of blockchain technology goes higher beyond currency exchanges. It could be repurposed for any system where maintaining public data in a decentralized manner is useful. Plans are under development to introduce it on stock exchanges, to initiate automatic contracts that would be important to the insurance industry, and it has been proposed for maintaining land registries.
Some predict that blockchain has the ability to disrupt all centralized Internet systems; it could be used to obtain, authenticate and forward any kind of information in the Internet of things. Blockchain technology may also create the backbone for machine learning and true artificial intelligence.
Bitcoin’s early volatility as a currency, and its adaptation in the popular mind with illegal and fringe Internet movements, distracted from the basic importance of cryptocurrencies based on blockchain. We are entering the future of where blockchain networks work more like the internet. The future of blockchain will not be one network working independently, but rather an interconnected network of multiple blockchains. This will allow diverse networks work together to create a scalable, truly global, and evolving blockchain layer of the internet.