Fintech, like many other technology-driven industries, is constantly evolving. There are new financial apps that seem to be evolving every day, offering bold new approaches to managing and processing payments. While the industry is constantly evolving, the emergence of blockchain technology threatens to lead to an unprecedented level of disruption to financial technology. So, let’s talk about blockchain and the revolution of blockchain fintech.
Optimizing blockchain Fintech with Blockchain Technology
Essentially, the Blockchain exists as an immutable block. With this technology, it is possible to develop an entire ecosystem of fintech applications. Blockchain technology can transform conventional financial processes into fully transparent ones built on secure and efficient transactions.
When used properly, blockchain can create a blockchain fintech ecosystem that can completely revolutionize finance. Financial transactions on the block do not require the presence of a middleman and are capable of establishing a peer-to-peer network, transactions are lightning-fast and completely transparent.
However, the application of blockchain in the financial sector can explain more than transparent transactions. With blockchain technology, users can finally regain full control of their assets – helping to pave the way for a fully democratized financial landscape.
Bankless Financial Management
We have seen numerous cases where blockchain allows individuals to manage their assets without the need for a bank.
Those who choose to hold cryptocurrencies like Bitcoin, Ethereum, or any other form of digital asset, can do so using a blockchain digital wallet. These wallet owners are protected with a private key, while possessing their own unique public address to allow them to send and receive payments with others.
Through the use of blockchain technology, wallet holders owning private keys are the sole owners of their assets – unlike traditional currencies, there is no bank responsible for holding your funds.
It removes third parties from transactions
The advanced security of Blockchain offers many advantages, one of which is that you can bypass traditional fraud prevention methods that require multiple parties to validate transactions.
Every financial transaction requires an authorized authority, whether it’s Visa or American Express that processes payments with your card, or multiple people who work in investment banks as transaction validators.
In 2020, the multinational investment bank and financial services provider, Citigroup, mistakenly paid $900 million due to a failure in their validation process.
This type of error would not be possible in a blockchain because the network is decentralized. Transactions on the blockchain are automatically validated as they are sent to all nodes in the network for validation.
Another revolutionary feature of blockchain is that it supports borderless transactions through decentralized currency using its framework. The technology could also pave the way for faster and simpler payments due to less cost of transferring between accounts. Because blockchain transfers don’t require authorization through a middleman and banks don’t have to use resources to transfer funds, the payment processing fees for international payments are also much less.
Blockchain will pave the way for a better flow of money around the world. Normally, banks will charge around 10% to 15% of the transferred amount as a remittance fee – with blockchain, however, this can drop to as low as 3%.
Payments on the blockchain, as we have already noted, are also extremely secure as all participants of the chain’s transactions need to provide their approval for the transaction to go through – and any Anyone can check the up-to-date ledger for details surrounding the transfer.
Blockchain fintech has grown to play an important role in the hi-tech lifestyle. As a result, the past 10 years have seen us transition faster towards a cashless society, with more investment opportunities and options for storing our wealth than ever before. Blockchain and the revolution of blockchain fintech are becoming more and more popular, and believed to be the future technology.
If you want to know more about Blockchain and the revolution of fintech as well as other blockchain problems, smartOSC experts are always willing to help you.
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