How Blockchain is changing finance?
On some of our previous posts at Money Trade Coin, we talked about cryptocurrency, its uses and some of its application. We haven’t yet really dived into the technology that’s behind digital currency, the blockchain, and how it is pioneering a paradigm shift in finance, with effects stretching across e-commerce, real estate, investment and business in general.
That’ll be today’s focus. Get your pen and paper ready.
Let’s first remind us of what blockchain is. The blockchain is a digital ledger, composed of numerous blocks, that act as transactional records of all financial activity on the network. The difference between a traditional paper-based financial ledger and blockchain is that the latter cannot be corrupted or altered without changing the entire blockchain and the consensus of all involved in the network. What this boils down to is unparalleled security.
Right. Now how is this changing the financial world?
The CitiGroup, among many others, are already putting time and effort into blockchain. Blockchain’s features let banks operate their financial dealings with more efficiency and without extensive human intervention. This alone could save bank huge sums, as well as time. In effect, they are capable of doing a lot more with a lot less.
E-commerce has seen a big boom over the last 5 or so years. More than any other business sector, blockchain has the potential to truly disrupt the e-commerce space. One of the great benefits of the technology is that allows for direct dealing between a merchant and buyer, and offers unmatched transparency.
One obvious benefit is that it results in lower fees for all involved. No middlemen are involved either. And lastly, transactions are available to the entire network, meaning merchants can readily see what the buying trends are. With our current system, we’ve got to purchase this information from large companies, who often monopolize this market. A fundamental aspect of cryptocurrency is democratization.
Investing in cryptocurrencies like Bitcoin, Litecoin, Money Trade Coin, and Ethereum is quite simple. It’s much like investing in the Forex trading system. What’s more, you can create tokens at fractional amounts with the digital currency. Some startups have designed systems that let you trade real estate, antiques, and stock using cryptocurrency. Because tokenization is possible, you can own assets at very specific token amounts.
We mentioned tokenization earlier. That’s influencing the real estate market as well. The cryptocurrency world has recently been introduced to Smart Contracts, which combined with the tokenization of assets, permits people to sell the property through purely digital means. You won’t require lawyers, they are easier to liquidate and platforms for bitcoin-based property transactions already exist.
Expect to see more and more industries being disrupted by these contracts and tokenization.
Blockchain is like an early point on a non-linear curve. With every passing month, it makes more
progress than the one before. In a few years time, you’ll see wider adoption of the system and many more practical uses.