Blockchain has had an immense impact on the finance sector, and it’s too early to determine whether it has a good effect or not. Experts believe that blockchain will revolutionize the finance industry. Although the impact is significant, experts don't expect the replacement of traditional financing with blockchain. On the contrary to popular opinion, there are those who believe that cryptocurrencies will crash to zero.
Blockchain gets rid of the third party intermediaries like a bank by creating permanent and secure records for a transaction. Blockchain can establish faster payments and charge decidedly less when compared to banks. They offer good security, removes third-party verification and all of this in lesser time than the usual bank transfers.
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Cryptocurrencies are based on public blockchains that can be accessed by anyone to send or receive money. Some companies use blockchain technology to improve their business to business payments in developing economies. Blockchain technology can easily keep track of transactions better than the existing protocols, like the Society for Worldwide Interbank Financial Communication (SWIFT), which is being pushed behind. Certain blockchains are collaborating with banks to provide better efficiency in the sector. Distributed ledgers and blockchain technology can bring the customers closer to real-time transactions. Blockchain makes borrowing money easy and secure and also provides consumers with meager interest rates. They don't require platforms to raise money for entrepreneurs. Anyone is free to invest money in whatever projects they find interesting. In fundraising, blockchain takes the form of an initial coin offering (ICO). ICOs are on a global scale, so raising money is quite simple, and the number of investors is exponential.
As the retailers and consumers don’t rely on the same banks for transactions, the custodians have to depend on reputed third-party platforms themselves to preserve all the paper certificates. So when buying or selling an asset, transferring ownership is difficult as either of the party retains different versions of the truth in individual ledgers. This system is inefficient, and the transactions could take up to 3 business days as both of their ledgers need to be updated so that it reconciles. Whereas, bitcoin transactions will take 30 minutes to 16 hours to settle, but it’s better than the average three-day process time for bank transfers. Blockchain could become the future of banking and be a boon to the consumers.