Bitcoin was created with disruption of the financial system in mind. Almost a decade on, it is well on course to shake up the financial world through its underlying technology — Blockchain Technology.
Blockchain Technology is the first form of ledger to eliminate the need for a third party. It makes it possible for a ledger (a record of anything of value) to be distributed among all those using it, putting the responsibility to maintain and validate it in the hands of those using it. The result is a decentralised system of data registry where transactions are instant, transparent, reliable and incorruptible.
In case you’d like to learn more about DLT before diving into it how it could re-shape industries, you can read more about it here.
In this series we’ll be diving into how blockchain technology can impact the Financial Industry. We’ll be exploring seven different areas of the industry in a series of short blog posts. We hope they help to enhance your understanding of how the technology could change the industry, what opportunities it may present and what challenges lie ahead.
1. Loyalty & Rewards
Blockchain technology offers transparency, accountability and traceability of transactions. This will help organisations create more captivating programs that benefit both the customer and the organisation he or she is interacting with.
2. Smart Contracts
Originally taken mainstream by the Ethereum Project, smart-contracts exist solely between permitted parties. They execute exactly as intended by their creators and bypass the need for middlemen, saving a substantial amount of time and conflict.
3. Stock Trading
Computers and the internet turned trading on its head. Now, blockchain could not just cut out brokers, it could also do away with the need for a centralised system to bring supply and demand together.
4. Online Identity
Registering online for financial services currently means meandering through an ever-growing list of costly processes. What if you could only register once and be able to reuse the same secure, verifiable online identity?
The advent of the internet made the transfer of information around the world instantaneous. The transfer of value, however, remained stuck in the past. Blockchain could finally provide the long awaited breakthrough for cross-border payments, peer-to-peer payments and micro-payments.
6. The Unbanked
Two billion people still don’t have a bank account. Financial institutions consider the operation costs and risk to be too high for certain individuals, thus denying them access to financial services. Blockchain can change that.
7. Raising Capital
ICOs (or Initial Coin Offerings) have taken the best parts from IPOs and Crowdfunding and merged the two. One might even say it’s become too easy to raise money. Whatever your view on the matter, the future of raising capital is bright one.