Blockchain is considered one of the most important and new technologies in the industry. Because the blockchain is the source that is changing the structure of the economic system, there are so many positive and negative rumors available among the people. People need to know what blockchain is offering to them and what the various things they must know about blockchain are. So many financial institutions accepted blockchain as the heartbeat of their system. This stated that blockchain technology is playing a very important role in the BFSI market.
Today I am going to break all the rumours about blockchain and let you have what are the various things about the technology you must know so stay tuned.
1. Blockchain promotes Quick settlement
Every user or person wants to save time and try to use applications and technology that can give them instant responses and results. And if we talk about transaction processing then I must say blockchain is the fastest method ever for the processing of transactions. Blockchain development services let you settle the transactions with optimization to reduce the requirement of time and money.
Besides that blockchain removed the middleman and other third parties which take part in the involvement in transaction processing. This also reduces the cost because people now don’t have to pay extra fees to third-party organizations. Now people can make their transactions digitally without taking care of additional expenses.
2. Blockchain provides many superior products
Blockchain provides a range of solutions for many common problems by creating funding mediums. These common problems are transparency and security. With the included feature of crowdfunding in blockchain, many types of funds are introduced. Improvement in money circulation is one of the examples of this feature. Blockchain has the ability to let people trust and use technology as much as they can. Blockchain also provides people with the best financial services they ever experience.
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These are described as tokens which are treated as the shares of the organization without equity exchange. These tokens are also known as cryptocurrency in technical terms. Companies can exchange these tokens with other parties as well and also use them to make their payments. The major advantage of Crowdfunding is that it ensures transparency and decentralization in the funds-transferring process. But there is a major lacking point of crowdfunding also available. It is lacking in terms of rules and regulation which is a big concern of the organizations.
3. Better Accounting
Blockchain helps to eliminate the chances of error. It is believed that “human is prone to errors”. When the records are saved by human beings then there are so many chances of errors and it is considered as nature of human beings. But when the records are stored with the help of blockchain the chances of error are reduced or we can say just eliminated. In Blockchain, scripting language is used for record-keeping which makes the whole accounting process digital and more efficient. It also increases the integrity of blockchain in the BFSI market. Digital ledgers created by blockchain are also easy to maintain and store, you don’t need to maintain big rooms full of files. It’s just a matter of digital space which may be cloud storage or the physical space of the computer system.
4. Use of Blockchain in Making Global Payments
Blockchain allows you to make global payments which means if you want to pay someone who is sitting in a different country and use a different currency then you can make the transaction with the help of blockchain. This is possible because so many institutions like Western Union or Swift accepted blockchain as their part. If you look at the benefits then the transfer will be faster and cost-effective.
But there are also some cons detected in this scenario. While doing cross-border payments there is a high risk of fraud. Imagine if the system suffers from a hacker attack then all money will be lost in the way. Also, the money releaser or the wallet or any service provider became bank corrupt. In this case, the loss has to be suffered by the two parties only. So have to be careful while making cross-border transactions.
5. Every time Digital Identification required
Transactions through blockchain are impossible without the digital identification of the client. There is a process followed by all the blockchain applications to avoid fraud. Below stated are the steps followed by the applications in a certain process:-
- The client has to make face-to-face identification with the other party. There are multiple mediums that can be used to make this possible like Skype.
- The bank of the client has to approve the details of the client without that identification is not possible.
- The purpose of the transaction should also be defined by the client with appropriate proves.
All the above points are very important to follow in a world full of hackers. If the transaction is going to happen with the mutual consent of the parties then still they have to cross the process to make it possible. But some people also find it difficult due to which they ignore blockchain to make their transactions.
Conclusion
Blockchain is a new technology, but so many BFSI institutions are making their organizations innovative with the acceptance of blockchain. It will take time for the institutions to accept it till then it will be never clear to people what the benefits of blockchain are and how people can avail of these benefits. But yes people who are using this technology always respond with positive feedback. They also reported that the technology made their transactions safe, and also fast.
So, make sure you know all about blockchain that others don’t know. If you have some new things about blockchain then feel free to share them with us. For more interesting facts about blockchain stay tuned, there is much more to come.
