The blockchain is a new technology which is taking the world storm. Satoshi Nakamoto introduced Blockchain which has become the underlying technology behind Bitcoins. Growing use of Bitcoin is quite visible from the number of Bitcoin ATMs and online exchanges around the country. The blockchain is now considered to be a staple of future internet-based business.
The blockchain is a distributed ledger which records transaction between two parties permanently. Once the transaction is reordered this data can’t be further modified unless all subsequent blocks in the network are altered. This feature allows the user to review and verify transactions easily. As time passes, Blockchain is continuously growing lists of records using a process called cryptography. All digital currencies are based on Blockchain technology. The popularity of digital currencies and Bitcoin ATM is nothing new; however, it’s time that people understand this underlying technology.
How Does Blockchain work?
A person requests a transaction at a Bitcoin ATM involving digital currencies. This request is broadcasted to all peer to peer networks consisting of computers, also known as Nodes. Now all nodes within the network validate the user status and transaction using algorithms. Once transaction is verified, it’s combined with other transactions in a new block or data. This new block or data is added to an existing Blockchain in a way which is unalterable and permanent. With this, the transaction is completed.
One important thing to note here is that these transaction data has no physical form, it exists only on the network. These transactions have no intrinsic value to other parties.
Quite easily Blockchain is regularly reconciled and autonomously managed, something which can record financial transactions and various other values or data. Additionally, this technology enables you to exchange values or data without involving any third party or intermediary. This new technology is a kind of self-reviewing ledger that reconciles every 10 minutes. Seeing such unique features, popularity of Blockchain has been increasing around the world. Apart from digital currencies, many industries are eager to use this new technology. Among several others, the banking and financial sector is one which will benefit the most after implementing Blockchain technology.
Use of Blockchain in Banking Sector
The blockchain is a technology behind digital currencies and Bitcoin ATM, but now the banking sector is also showing interest in it. Centralized data can be controllable but it is prone to theft and manipulations. The blockchain is decentralized which is proving to be effective against cases of corruption and hacking. Moreover, blockchain being distributed makes it more transparent and easy to use. Banking and financial services will transition past traditional systems and provide secure, more accurate, and faster solutions. To date there have been no flaws reported in the technology, all issues have been due to human errors.
It’s time that traditional banking systems transition from outdated concepts and implement Blockchain technology. With its use risks of fraud, costs, time, and labor will decrease considerably. For the banking industry these have been a matter of concern for quite long time, Blockchain technology has allowed for a massive upgrade. Blockchain effectively addresses all these factors and can provide a better solution. The global success of digital currencies and Bitcoin ATMs is because of Blockchain technology. Banking systems are now eager to take advantage of the emerging technology.
In recent times the number of bank frauds and scams has only increased, Blockchain will reduce this drastically. Blockchain can provide the crucial solution for expenses involved in due diligence, KYC Verifications, and Credit Underwriting. What’s more, this technology can make settlements and clearing less expensive, faster and more secure than what it is presently. With so much on offer do you still doubt why banks should implement Blockchain technology?