Steemit Crypto Academy Week 6 Homework Re-submitted To @gbenga | Application of Blockchain and Impact of Cryptocurrency in the Banking Industry| @bukkyi4u
This week 6 homework was originally submitted on the 15th of March( last week Monday). Here, STEEMIT Crypto Academy Week #6 Task submitted to @gbenga | Application of Blockchain and Impact of Cryptocurrencies In the Banking Industry | @bukkyi4u. It was verified and rated by our highly esteemed professor @gbenga but was never voted on by any steemcurator. Hence, I decided to re-submit it here for re-curation.
INTRODUCTION
Actually, I feel excited having to participate in this task by @gbenga on the application of blockchain and impact of currencies in different industries. This is because this has been an area of interest for quite some time. So, I decided to make this submission.
Blockchain simply refers to the way and the means by which information is digitally stored in public databases. In actual sense, blockchain is made up of a lot of different kinds of cryptocurrencies. Usually, using blockchain confers a very high degree of financial security When transactions are made.
The use of blockchain by the financial services industry or banking industry can make it a lot easier to keep proper record of a few variables. The value of recent transactions or purchases in dollar, the time of transactions and date for which such transactions were made can be more easily recorded without stress.
SECURITY BENEFITS OF APPLYING BLOCKCHAIN IN THE BANKING INDUSTRY
1. It enables safer transactions with shared ledgers
One of the very first important and major security benefits of applying blockchain in the banking industry is that it enables safer transactions with the use of shared ledgers.
The use of shared ledgers in financial transactions can make it a lot easier for financial institutions or banks to keep the record of financial operations safe.
To start with, it it is a lot easier to complete financial transactions in real time and quicker with the use of blockchain. This would greatly reduce the likelihood of information being diverted which may lead to the loss of funds.
Equally, it is made a lot safer with the use of two transaction keys- the private key and the public key. While the public key is available to everyone, the private key is only available to one user.
Once transactions have been verified over the blockchain the information is stored permanently and can not be altered. This makes for added security.
2. It Improves Accountability And Reduces Errors
The use of blockchain in the banking industry makes it much easier to store information and reduce errors in handling. Transactions and records of financial purchases can be easily reconciled.
It improves the accountability by making it easier to trace and locate errors in the financial transaction chain. Also, this can be done in a much more time friendly way and manner.
The timeliness of this makes it possible to even identify and locate errors before the completion of a particular transaction.
Be that as it may, errors can be corrected even before it could have resulted to major financial leakages or problems. This can be beneficial and save a lot of stress on the part of both the customer and the financial institution.
THE IMPACT OF CRYPTOCURRENCIES IN THE BANKING INDUSTRY
1 With cryptocurrencies more people can participate in the financial services industry
One of the major strengths and arguments for the scores of cryptocurrencies in the blockchain ecosystem today is that a lot of different people all across the globe can now have access and participate in the financial services.
Irrespective of your country or tribe people can now engage in financial services easily. Interestingly, sometimes even when one does not qualify to bank he could still be a participant in the financial services industry.
Again, even if your country is lagging behind in the financial services sector this may no longer be a barrier. The use of cryptocurrencies in the banking industry provides a level playing ground for all and sundry.
2. Cryptocurrencies confer greater efficiency in the banking industry
A lot of groundworks have already been put in place for some cryptocurrencies, especially Stellar and Ripple, to corporate with already existing financial institutions to improve and make financial transactions and services a lot more efficient in so many ways.
Some financial institutions have been created and networked over the blockchain in the form of Ripple Transaction Protocol (RTXP).
The importance of banking institutions and participants using this transfer protocol is that transactionals can be made between the participants in just a fraction of time. Also, the cost at which the transaction could have been executed with other means is greatly and unimaginably is reduced.
Global transactions which could have occured in a period of 3 to 5 days could be executed in just a few minutes. This could usually have cost about $1.6 trillion annually source. However, this can be done in real time with the application of cryptocurrencies in the banking industry.
CONCLUSION
In conclusion, the application of blockchain and impact of cryptocurrencies in the banking industry can help restore the credibility in the system in that it can make transactions safer. Again, it can improve accountability and minimize, if not remove, errors.
On the other hand, cryptocurrencies can bank the unbanked and even the unbankable. Also, it can improve the efficiency in the banking industry.