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Blockchain, a shared, fixed ledger that facilitates the process of recording transactions and tracking assets in a decentralized network, according to US News, is one of the leading innovations in the financial industry and can transform everything from payments transactions to investment funds. This type of technology has many applications that can be integrated into…
Blockchain, a fixed and shared ledger that facilitates the process of recording transactions and tracking assets on a decentralized network, is one of the leading innovations in the financial industry, according to US News, and can transform everything from payments to mutual funds. The technology has many uses that can be incorporated into the financial industry, which leads to many investment opportunities such as cryptocurrencies and NFT, according to CB Insights.
There are many benefits to using blockchain for the financial industry as companies compete to reduce transaction costs and frictional losses and, according to IBM Financial Services, this technology can make it more transparent, less prone to fraud and cheaper for consumers. First, because the blockchain technology is in a public ledger, scams can be tracked and prevented. In addition, payments and money transfers made on the blockchain can be easily tracked and there are fewer scams and fraud concerns.
According to CB Insights, blockchain also has cryptographic algorithms that provide security when exchanging information between financial intermediaries. Next, because of the decentralized ledger for transactions, blockchain technology may enable faster payments at lower fees, according to US News. Search and information costs are reduced. With all these benefits, blockchain has the potential to not only transform the financial industry, but potentially also replace financial services provided by banks. Blockchain technology has a ledger that no one manages that can allow payments and securitizations take place without the need for a bank, according to CB Insights.
For example, when people want to send money from one bank to another around the world, there are fixed fees for bank transfers and additional fees based on the amount sent, according to CB Insights. It can also take up to a week for the money to reach the recipient bank. On the other hand, cryptocurrencies such as Bitcoin or Ether, which are based on public blockchains, can give everyone access to fast, cheap and unlimited payments. Bitcoin payments take an average of ten minutes, according to US News, which is much better than the average processing time of three days for bank transfers.
Given the potential that blockchain has, it’s an investment opportunity worth considering. Potential investments could include buying cryptocurrencies like Bitcoin and Ethereum, or investing in blockchain stocks and ETFs like Microstrategy Incorporated, Square Inc, and International Business Machines Corporation. Blockchain technology can transform the financial industry and has the innovation and growth necessary to make it a great investment for years to come.