Let's Analyze: BlockChain Overview | How It Could Revolutionize The Lending System Within The Economy?

Ever felt the need of loan but not getting it on time because of centralized banking institutions or unfair interest rate of local lenders?

Well, this is the sad reality of our banking industry. Basically, if a person wants to have a personal loan, then he has to submit hundred of documentations, a need of security against loan, a few guarantors and a few days of loan processing time. In this period of time, the problem for which loan was needed at the first place, might get diminished. 

On the top of this lengthy process, banks or other financial institutions has to pay enormous fees while securing the loan along with expensive EMI per month. This the main reason why people these days heading towards other options for securing person or commercial loans. Some small vendors goes to their families, friends, friends of friends, colleagues or even strangers to get some loan for their business. While some medium vendors goes to large local lenders who charges high interest rate but less fuss while providing a loan.

So, what goes wrong in case of Banks or Financial Institutions? 

Is the Centralization really causing this much trouble for people? 

Let's have a look at Blockchain Technology which might revolutionize the lending system within an economy.

Blockchain Technology is actually a decentralized and digital public ledger system in which each transaction is recorded into many block through out the blockchain so that it can't be manipulated or edited by any centralized authority. 

Now, the Blockchain technology is already being used in many domains like cryptocurrencies, payment methods, real estate, educational course offerings, service sectors and many more. In fact, Mr. Jamie Dimon also praised the future of Blockchain technology and looking forward to use it for their his own Financial institution JP Morgan Chase. 

Blockchain technology offers many features over centralized system of records maintenance. So if this decentralized public ledger system could be used for loan securing, then it can open many possibilities in the field of finance industry. Some of Blockchain's features are as follows:

Decentralized

Blockchain technology is decentralized that means if applied in financial sector, it can make financing transparent, taking out the control from centralized institutions to peer 2 peer network. 

With the use of Blockchain technology, a person can secure loans even through online means and with economical interest rates.

Security 

If you recently read a news about a Brazil bank got mugged by hackers who took out the usernames and passwords of their customers within few minutes. All this happened because all those information was sitting at one place. If the Blockchain system would be in use, then no hacker can get the access of all the information within minutes. Rather, Blockchain technology has layers of security which prevents hackers to penetrate through the information sitting in the Blockchain. 

No Government Control

Well, government is the highest authority in most of the nations. They control all the factors and policies regarding each and everything within an economy. So, they also can easily manipulate the interest rates of banking infrastructure and that's why many people can't get their hands on personal loans in the time of need.

But with the use of Blockchain technology, the system can't be manipulated at an instant. Apart from this government fraud can also be prevented with the use of Blockchain technology.

So, all in all, Blockchain Technology can change the way we're doing things right now, if it get implemented with efficacy and without any politics. 

Many companies are already using it for their operations and many are still looking forward to use it in near future. 

Let's hope for a bright future ahead. 

Thanks for reading ..!!

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