Blockchain in Banking

May 24, 2021

Read on to find out what blockchain for banking is all about and explore 10 potential use cases of this cutting-edge technology for the financial services sector.

Blockchain banking — definition

Let’s start at the beginning. What exactly is blockchain in the context of banking?

Blockchain technology is an open, distributed ledger that records transactions between two parties efficiently and permanently. A blockchain consists of individual blocks of data that involve a series of related transactions, linked together in a specific order. All of the involved parties can share a digital ledger across a computer network without needing a centralized authority or intermediaries. That’s why processing transactions through blockchain is faster.

The speed is just one of the many potential benefits blockchain brings to banking. It’s not only about greater efficiency but also a new level of transparency and security.

How can banking benefit from blockchain technology?

Once we consider the specific features of blockchain, it only makes sense that the banking industry will be taking the lead in the adoption of this technology.

Just think about why we set banks up in the first place. Banking institutions were created to connect groups of people together and allow all kinds of trade and commerce between them. A blockchain is a tool that can accomplish the same but on a global scale. Moreover, it’s secure and transparent.

Blockchain also holds potential implications for global commerce. It could make trade more efficient by removing the manual and paper-based processes and introducing streamlined and automated ones instead. A public blockchain can be a great collaborative tool because it’s decentralized, and no single entity can own it. That’s why blockchain is more than just the underlying technology for cryptocurrencies like Bitcoin or Ethereum.

Here are ten use cases of blockchain in banking to help you understand how the financial services industry will be attempting blockchain in the near future.

Articles authored by brugu softwaresolutions

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