Digital currencies and blockchain have had an enormous impact on the financial sector, and it might be leading to changes we never thought of before. Let’s take a look at the potential of crypto and blockchain and how our system, as we know it, could be changed by these two forever.
It will upgrade the money transfer process
The fact that a third party needs to get involved in any financial transaction using fiat currency gives birth to administration and transaction costs. Meanwhile, money transfers via blockchain technology do not demand extra fees or administration services. Thus, transactions become a peer to peer exchanges that are recorded, carried down and completed through smart contracts. It not only improves productivity but also minimizes the traditional time consumed by a specific transaction. The removal of third parties leads to democratization and a sense of freedom among business owners.
It’s an alternative to variation in exchange rates
It’s a no-brainer that different nations have a drastic difference in currency values which makes business immensely complicated. This has also not allowed many nations to grow and stand beside some of the better-developed countries like the US. Thus, some of the smaller nations have turned towards digital currencies to curb this imparity and adapt the future as early as possible. Assets, when measured in digital currencies, are no longer subject to institutional authorities making them available to each and every person. Countries like Venezuela have officially adopted crypto coins to get out of unstable economy mainly caused due to US sanctions. All in all, a single price for a coin throughout the world does not provide any extra leverage to either country.
It will make things accountable
The current financial system is prone to mistakes as humans eventually control the whole system. The fault can be conducted by even the least prominent character in a transaction leading to significant damages. Here comes the need for blockchain. The technology is theoretically flaw free as it works on smart contracts and a decentralized ledger that cannot be altered once booked.
Thus, financial transactions will be tracked from their initiation to their end in real time in a much faster way which was not possible before. We are moving towards a mechanism where mistakes become nothings but unattainable.
The financial world becomes borderless
People are getting paid in bitcoin and ether which does not require authentication from government bodies and baking institutions. Hence, the borders created by banking giants become meaningless. As bitcoin is not minted by the government, it cannot be controlled by a centralized authority plus it cannot be tracked by a third party either. This feature removes region and political barer enabling businesses to interact on a single plain.
One might come up with some negatives of this feature, but the fact remains that free negotiations of transactions are bound to provide endless business opportunities which have been controlled by financial authorities for ages.
These factors are enough to change the international financial landscape forever. But, nations banning the use of crypto coins comes as a roadblock which should be tackled before virtual currencies become a bet that never paid off.