Benefits of Blockchain in Financial Applications
The impact and advantages of Blockchain technology on our Financial lives today, can simply, not be ignored.
The 21st century is now being called the era of decentralized technology, especially with the new technology developments and advancements over the last few decades.
It’s quite fascinating Because the benefits of this technology we enjoy today may seem unbelievable, and quite unreal, at times.
Infact Our forefathers wouldn’t have believed any of this if they were told what the future holds for them and their generations.
Here are 6 benefits of Blockchain Technology in Financial Applications;
- Reduces Settlement Time: Payments and remittance settlement can happen rapidly allowing people to access their capital when they need it. Time and cost efficiencies could support large amounts of small transactions or micro transactions within a trusted network. (How long does it take to Receive a Bitcoin Transaction.)
- Trust by design: Blockchain provides a way for participants in a business network to continuously store, amend and share verified data in a transparent manner. More than one party needs to verify each set of transactions before a block can be added to the chain. Thus, participants in the blockchain can put their trust in the verification process, even if they do not know each other.
- Auditability: The blockchain provides a traceable, timestamped trail of transactions between the participants in the chain that cannot be deleted or changed. This feature of blockchain could especially be useful in the Microfinance model to prevent fraudulent and duplicate transactions.
- Efficiency: The decentralized nature of blockchain, with immediate validation of every transaction, allows for real-time data entry to the digital database without verification by an intermediary such as a clearing house or payments gateway. This can speed up and streamline the processing of financial transactions.
- Cost Reduction: Blockchain enables low-cost, peer-to-peer transactions, offering an alternative to expensive and potentially inflexible centralized solutions, infrastructure and authorities.
- Support Smart Transactions: Smart contracts extend the functionality of the blockchain by allowing transactions to be settled automatically when certain conditions are met. The terms and conditions will be set by the parties that use and control the blockchain. This will allow the unbanked not only access to bank accounts but access to global capital markets as well by providing all types of value transfers automatically.