In 2009 Satoshi Nakamoto published his white paper and a little-known blockchain cryptocurrency was born. We have come a long way since that time, and we should see some exciting developments in the world of blockchain as we move forward in a world that is not short of offerings.
Revolutionary Blockchain technology has many advantages over the current system. Ranging from better security, lower costs and superior inclusion. Another advantage is the speed of transactions, as the legacy banking system has been using the wire transfer method for generations. Results from a test run by a group of banking interests in Japan has revealed that Blockchain technology is more than ready to move the current monetary transfer system into the 21st century.
Unprecedented Digital Security
Online security has been a worry for many, and with good cause. Of all the developed countries in the world, the United States has been found to be the most susceptible to cyber attacks. Recent surveys have shown over seventy percent of Americans believe it’s getting harder to stay secure online.
Blockchain is nearly-impenetrable against fraud and more secure than what the banks are currently using now. Creating a system that is much harder to fool. The weakness of banks comes from their centralization, which makes hacking easier. In contrast, blockchain keeps track of all transactions in its digital ledger so no one can invent one. Every time this digital ledger is added to by a new block, the security of the entire chain before it is increased. It’s also decentralized, with an enormous peer-to-peer network verifying transactions.
Another key element of digital security is it can help with the Know Your Customer protocols (KYC). This refers to how an institution identifies and verifies a customer’s real identity. Currently, it’s a long process, filled with long paperwork and processes that end up not being very secure (like the security answers you provide that can often be uncovered easily). Blockchain can make KYC a much shorter and smoother process, by entrusting customer identification to a global database.
Is Banking Ready For Blockchain?
Well, Harvard Business Review claims that blockchain will do to banks what the internet did to media. And, as of 2016, 60% of financial organizations plan on using blockchain for international money transfers, 23% for security clearing and settlement, and 20% for Know Your Customer (KYC) regulations and anti-money laundering services.
In the end, there are two primary reasons that blockchain technology is going to revolutionize the banking industry in the next decade.
- It’s far less expensive.
- Transactions are significantly faster.