The Impact Of Blockchain Technology in Banking
Before the invention of money in the history of world humanity, people used the barter method to trade between them. With the barter method, the needed goods are exchanged with the goods in their possession. This method forms the basis of the banking sector.
With the developing technology, the need for easier, faster, and safer processing of data has emerged. Many studies have been done and continue to be carried out to meet this need. We can say that blockchain, which is the most remarkable and accepted technology in its field, has proven itself. With the innovations brought by blockchain technology, investments are made for a better future.
Blockchain technology has many usage areas. The banking and finance sectors are at the forefront of these areas. Blockchain, which offers solutions to the problems of traditional banking, has started to change the understanding of traditional banking and finance.
Innovations Brought to the Field of Banking by Blockchain
Blockchain has transparent and traceable records due to its structure. Data processed in distributed ledgers can be easily accessed by anyone. However, in traditional banking, the records are kept confidential and only shown to the relevant institution or person when requested.
Due to the procedures used by banks, many transactions such as transfer, loan, and deposit transactions are time-consuming. With blockchain, the transactions are carried out quickly without being stuck in the procedure.
In the blockchain system, there are more than security services offered by traditional banking.
Thanks to the structure of the blockchain system, it can be said that it is impossible to change the records retrospectively.
Security companies are developing projects to integrate the systems they use with blockchain.
Blockchain systems are more acceptable for investors than banking and financial systems with high costs because there are no intermediaries and much more acceptable costs.
When you want to send money to any part of the world, the costs are high; and you have to wait for a specified time. At the same time, you wait for the working hours of the banks to be able to transfer. However, this is not the case in the blockchain system. You can instantly send or receive money anywhere in the world at any time of the day. In addition to these features, you will not have limited problems.
Projects and transfers that are stuck on the issue of trust with smart contracts can be carried out between peers in the blockchain system. Programmable smart contracts can be used by changing in line with requirements.
A person or institution that wants to implement a project must first find capital. The only way to find capital is through banks. With blockchain, this problem can be minimized. New projects can be financed through Initial Exchange Offering and Initial Public Offering. At the same time, while these supplies are made, the costs are considerably reduced if they are made over the blockchain.
The Impact of Blockchain on International Trade
For international trade, correspondence may be required for days or even months. To provide financing, you need to prepare and present many data requested by banks. To follow up the products, people must be sent and employed. This is a very grueling, time and money-consuming process.
Blockchain allows you to perform this process quickly, securely, and at much less cost. Agreements are made with smart contracts. The products can be tracked instantly and without any margin of error through the distributed ledger system. Financing and transfers are carried out quickly and safely, while costs are kept very low.
Changing Future and Blockchain
The banking and finance sector will be the main sectors affected by blockchain technology. Blockchain, which provides fast, secure, less costly, and transparent trading, will change the traditional banking understanding.
The realization of international trade through bilateral agreements will open new doors and offer options. The potential of digital deals is increasing day by day.
Blockchain technology, which has great potential with an understanding of banking without borders, allows us to use an easier and safer understanding of finance.
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