How can Blockchain Technology Change the Financial Structure of the World?
Beyond the fluctuating nature of Bitcoin, it has the potential to revolutionise the way we manage and utilize money.
This question is being asked by every government communities, consulting firms, think tanks, financial institutions, and the largest banks. One earns money by working in an office or by trading, but in case of Bitcoin, one earns by mining. With the growing popularity, one can sell or buy goods with bitcoins. So, these are the ways by which Bitcoin technology can change the financial structure of the world.
Infrastructure for cross-border business
Media has been totally transformed by the digital revolution and it has affected the finance industry also. Yet, cross-border transactions have not been transformed by this digital revolution. Banks uses a very complicated infrastructure for basic affairs and this can be changed by blockchain. The technology of blockchain permits financial institutions a way by which they can generate a direct link between one another. This is also possible by circumventing the correspondent bank.
Financial institutions that are competing can actually use one common database so that they can easily track the settlement, clearing and execution of transactions without the requirement of any centralised management system or database. This way between two parties, transactions can occur on a P2P basis. HC Corporate Payment, by HashCash, is an example of such a product that is solving these problems.
Digital assets as a class
One of the unique creations of Bitcoin is digital property. Just with a click of a button, anything could be copied along with the digital code that cannot be copied. This way bytes and bits were discovered along with a way by which anything digital that can be owned can never be copied. The value of the Bitcoin is mainly based on the volume of its blockchain so that creation of fake coins and double spending can be prevented.
Markets and governance
This capability of blockchain actually extends than just keeping track of transactions. A platform can be build where private companies can trade and issue shares using a blockchain. This platform was first built by Nasdaq.
Accounting and auditing
Databases of blockchain are built from their own history of transaction whereas others are just snapshots of a moment. These databases are a self-contained system of records and thus it can be used for accounting and auditing which will change the financial structure of the world.