In the past, finance has been a rather conservative industry that stuck to tried-and-true practices. However, this is changing as Fintech – or financial technology – innovations have changed how we do business with each other and our money. Blockchain development organisations now find themselves at an advantage because they can offer more services than ever before while staying up on all these new changes happening within their field.
The world is changing, and people are tired of black boxes. They want to know how their data payment history is stored to make informed decisions about whether it’s worth continuing with one company or another in light of the significant data breaches that have happened over time. Blockchain technology has proven itself useful by providing transparency when needed most.
Blockchain is an innovative technology that has the power to transform business, however for many, it may be difficult to understand at face value. Before we get into the benefits of blockchain, let’s discuss what it can do and how businesses are impacted already through its applications like cryptocurrency trading or secure data storage on cloud providers.
What is Blockchain?
Blockchain is a distributed ledger technology (DLT) that allows your transaction information to be pseudonymously recorded and stored globally in many locations On average every ten minutes a block is produced and filled with transactions, once complete the network of miners add the block and update the blockchain, this process is secured using cryptography and game theory.
Here is a list of the critical blockchain features.
- Distributed ledger: This is a synchronised database, and it’s accessible through many locations through multiple participants. Every computer in the distributed network stores a copy of the ledger to ensure transparency and avoid a single point of failure (SPOF).
- Decentralised: A blockchain network eliminates the risks associated with data being stored centrally by storing it throughout the network.
- Immutable record: Every blockchain network adheres to a specific protocol for validating new blocks. Once registered, no one can alter the information in all the blocks without changing all of the following blocks, which requires the network’s consensus. Simply put, in order to change the history of a blockchain every decentralised validator would be required to agree on the change, making it near impossible to change the history given its distributed, trustless nature.
The Journey of FinTech
FinTech has gained the ability to adopt innovative technologies quickly. Financial organisations are now leveraging this to sell more value-adds and make their operations’ security better. Money transfers, international payments, settlements abroad, swift transactions with mobile phones, and cash withdrawals at ATMs in foreign areas are all areas this applies to.
Even still, it was a huge breakthrough when new technological options shook up the capital market. Business leaders embraced new approaches, and an international financial ecosystem was built where everyone could communicate and exchange information with each other.
Such new practices generally require a change in the regulation process, which limits the traditional financial sector in some instances. Now, many established financial companies want to adopt new approaches and push new technologies to regulatory approval and take advantage of the opportunities they offer.
Blockchain-based fintech might be the next step in the financial industry’s evolution. This will likely create more transparency and increase transactional security.
Blockchain’s Effect on Transforming the Financial World
Blockchain in fintech has the potential to offer more efficient, secure, and seamless money services. This ability ranges from cost reductions to minimising bureaucracy in traditional banking, which will benefit both clients and banks.
Fintech blockchain is anticipated to grow the fintech market exponentially in the coming years, and it will likely continue to grow beyond that. It’s here to stay.
Blockchain helps manage data breaking and other fraudulent activity to ensure that fintech businesses can share and transfer safe and encrypted data throughout the decentralised network.
Data will be more secure with advanced algorithms encrypting it, and it will aid in tracking, comprehending, and auditing AI decisions more efficiently. This technology also has the potential to strengthen public trust in fintech companies via the added transparency it offers.
Blockchain technology poses a perceived threat to the stock market’s sometimes questionable practices, including processing time and charges, stock tampering, and all intermediaries’ commissions.
Cost Reductions and Quick Transactions
Fund or asset transfers are time-consuming and have always been that way with traditional banking. Sending even the smallest amount of money can take several days or weeks to transfer when two banks are involved.
Fintech blockchain will reduce the amount of time it takes to send money. The transactions happen in real-time, ensuring the recipient won’t have to wait for many days or weeks to get the money.
Fintech’s adoption of blockchain transaction processing can severely diminish the transaction costs, enabling direct P2P transactions that get rid of the middle man or all unnecessary charges.
For example, remittance costs inside the blockchain are 2-3% of the total amount compared to the 5-20% withheld by other third parties. Blockchain resolutions for regulatory compliance, onboarding, and fraud might save banks large amounts of money.
Aus Merchant Helps You Navigate The Future Of Money
Aus Merchant is a digital currency provider for investors, businesses and charities. Our team helps you navigate the often complicated and sometimes confusing landscape of digital currency. Whether you want to buy, sell, trade, hold, earn, spend or receive digital assets, Aus Merchant is here to help you realise your goal.
Aus Merchant is a group of industry professionals and investors looking for a more efficient method of donating, trading and storing digital assets. Bringing the future financial system to a growing network of Australian investors and businesses.
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