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  • Writer's pictureLawrence Cummins

Why Blockchain will end banking industry as we currently know it

Updated: Aug 26, 2023

Blockchain is a revolutionary technology that can potentially transform various industries, including finance. It is a type of digital record that ensures the security of transactions through decentralization and cryptography. With the ability to maintain integrity in various events, such as medical information, political/historical events, and financial transactions, blockchain could potentially end banking as we currently know it.

Elimination of Banks:

One of the most significant ways in which blockchain could end banking is by eliminating the need for banks altogether. Traditional financial transactions rely on centralized servers, which are vulnerable to various risks. However, blockchain technology allows for the exchange of money without the involvement of a centralized authority. As information in a blockchain is shared and continually updated, there is no longer a requirement to route transactions through a bank. Therefore, the reliance on banks for financial transactions could be eliminated.

Enhanced Security:

The current monetary system faces significant security challenges, such as theft and forgery. Traditional forms of payment, including paper bills, metal coins, and credit cards, are susceptible to theft, and transactions can be forged. Although banks offer some form of protection against credit card fraud, blockchain technology takes security to another level. Financial transactions within a blockchain are secured through the use of cryptography, making it extremely difficult for fraudulent activities to occur. This technology not only eliminates the need for banks but also provides a secure environment for financial transactions.

Time-Saving Transactions:

In our current financial system, transactions can often be time-consuming. For instance, completing a credit card transaction at a physical store may take several minutes as it requires communication with a bank or financial institution. In contrast, blockchain technology enables instant transactions. This is because the need for communication with a bank is eliminated, and the decentralized nature of a blockchain ensures quick and efficient exchanges. International transactions would also benefit from blockchain technology, as there would be no requirement for currency conversion through a bank. The time-saving nature of blockchain transactions can greatly improve the efficiency of financial exchanges.

Cost Reduction:

A drive towards a paperless society has been observed in both individuals and businesses. However, this transformation has yet to fully materialize due to the reliance on banks and other financial institutions. Blockchain technology can potentially enable a truly paperless environment by sharing information across multiple computers. With this approach, there is no longer a need to send data to and from a bank, resulting in cost reduction. The elimination of banks not only saves on transaction fees but also eliminates the need for physical infrastructure, reducing costs further.

In conclusion, blockchain technology can potentially disrupt and revolutionize the banking industry. Through its ability to eliminate the need for banks, ensure secure transactions, save time, and reduce costs, blockchain could reshape the financial landscape as we currently know it. With the continued advancement of this technology, it may only be a matter of time before traditional banks become obsolete. As we embrace the era of decentralized and secure transactions, the future of banking lies in the hands of blockchain technology.

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