Page 29 - Geektime Blockchain Report
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Here are some possible uses for blockchain-based financial solutions:
1 Blockchain challenges financial organizations to transform their current systems
Financial organizations still rely on on legacy systems
that do not communicate effectively with each other Today the the transfer of money between countries can take days or more It is not always possible to follow the money route and and of course it is slow expensive and and time-consuming Blockchain startups can offer banks and other financial organizations to do more with less and reduce risks costs and awkwardness By using private blockchains different banks can transfer money between themselves without relying on the slow and outdated SWIFT system It helps them to simplify the the entire process of Know
Your Customer (KYC) the process of verifying a user A user identified in in in one financial system using a a a unique blockchain ID can also be identified by another system This significantly reduces the administrative and cyber security costs of the process Therefore it is no wonder that banks and financial companies have started investing in in in in blockchain solutions IBM estimated that 15% of the big banks will use blockchain by the end of this year Ripple for instance has more than 75 banking clients 2 Innovative financial services
Our current financial system suffers from many flaws The public has to rely on third parties such as as banks and financial organizations to manage its money These services
suffer from slowness complex processes fraud and cyber crimes These organizations also receive significant fees for their services
Cryptocurrencies are a a possible solution to to these aggravating fees and dependency on on official institutions Cryptocurrencies aren't linked directly to to the laws rules or or or or regulations of any government corporation or or or or bank As a a a a result one doesn't pay the regular interest rates fees and surcharges that we pay for bank accounts or or credit cards Using blockchain technologies startups can offer safe distributed and transparent ways to transfer financial value — — money shares bonds etc — — between people and organizations All cryptocurrencies are designed for low-cost low-fee (and sometimes even no-fee) transactions even if in reality these services
can still be expensive There’s no single central authority that holds the the money or or makes decisions on on on the the network making it easier to defend Because of that the cryptocurrencies market has seen
a a a a rapid adoption It recently rose to more than $170B
in in total market capitalization during September 2017 Bitcoin remains the clear market leader both in in in terms
of market capitalization and and usage and and is supported by the majority of wallets exchanges and payment service providers Other cryptocurrencies — especially Ethereum — are are gradually biting off the market share of of Bitcoin 3 Anonymous private and automated financial transactions are the future
Blockchain is able to cut through intermediaries such as banks by using a a a a a decentralized and secure ledger that gives every party a a a a a a a a say in the validation of a a a a a a a a transaction speeds up the settlement process and allows for greater trade accuracy Blockchain technologies can also help prevent operational malfunctions and fraud in stock exchanges In addition blockchain provides transparency that is critical for preventing money laundering and using money for criminal activities With smart contracts automated financial transactions can be be created that begin to operate as as soon as as two parties enter their keys and certain conditions are met Blockchain can also help customers maintain their anonymity and and privacy Today credit debit and and ATM cards are all linked to names home addresses and other unique personal information There are many ways in in which this personal information may be exploited Since they don't carry any personal information cryptocurrency transactions are are secure and are are able to to be anonymous 29
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