During the last couple of months, banks and financial institutions have continuously showed their interest in bitcoin, for various purposes, such as digitally signing contracts, helping with monetary transfers and more.
Perhaps one of today’s biggest monetary challenges is the presence of hackers. While they cannot crash the entire world economy by ‘deleting’ money, they can cause a great deal of damage to banks and financial institutions by changing what computers think is real and true. This represents the main reason why banks are seeking a system that would guarantee the authenticity of data, by thoroughly analysing it, and keeping records on a ledger. Blockchain technology, which is quickly picking pace, can do exactly this.
While the blockchain first attained the attention of banks and the media by being the underlying system of the bitcoin network, more and more companies and financial operators are now tinkering with its functionalities. With this in mind, the powerful software can be leveraged by banks from all around the world to keep their data safe at all times. For those who do not know, the blockchain works by linking all steps of transactions, into a secure block, which is visible to all stakeholders. To change anything in the block, both stakeholders should receive permission from the others, thus stopping illegal data modifications being carried out by hackers. Therefore, any attempt whatsoever to change data and which is not authorized, will be flagged by the network, and then negated. While the system is not uncrackable, hacking the blockchain system would be a very complex endeavour, even for small, business-based blockchain systems.
Based on this aspect, blockchain can be both useful and safe for financial institutions, by creating a ledger containing all transactions being carried out. This way, banks won’t have to reply on other systems which are not fool-proof. Not only this, but the blockchain will also help provide banks with precise, and real-time data analytics for all transactions that take place.
Apart from using the blockchain network for security purposes, banks and other financial institutions can also take advantage of the technology to ensure faster, and less pricey monetary transfers. This way, sending money from a bank to another will not take a few days for processing, and high commission fees, but will be rather instant.
Based on everything that has been outlined so far, for banks, the blockchain network will manage to set true information in stone, and stop data-tinkering once and for all, apart from ensuring better, less-costly and faster transactions. What is your personal opinion on the blockchain network? Let us know your thoughts in the comment section below.