Crypto Academy Week 6 - Homework Post for @gbenga || Security Benefits and Impact of Cryptocurrency in the Banking Industry
Thank you @gbenga, for your lecture this week. I’m here to submit my homework on the subject of the benefits of blockchain security and benefits of cryptocurrency in the banking industry.
Introduction
The crypto world is self-secured, in that nobody stands as an intermediary, yet there is little or no fear of losses. The decentralized nature of the blockchain technology has paved way for the new age internet security that is worthy of emulation by the traditional banking system.
The question is how can blockchain security and the benefits of cryptocurrency as a whole be incorporated into the banking sector to better the operations of the banking industry?
This is a big question, which we hope to address today. This is not time to be afraid of the developmental stride of the blockchain technology, but harness its benefits and opportunities in order to put a formidable financial system in which posterity will be proud of.
Secured Transactions and Instant Settlements
Transactions in the blockchain is highly secured and private. Nobody can monitor a user’s transaction in the blockchain. For example, if Okon transfers Bitcoin to Etim, there is no monitoring organisation to track who is sending what to who. That way, it is impossible for fraudsters to try attacking the user in order to steel the asset.
In the traditional banking system, some bad eggs in the banks can steel from users’ funds because the have access to the transaction routes.
If the banking industry embrace the decentralized mature of the blockchain technology, people’s money would be more secured and their privacy enhanced.
On settlements, the blockchain has instant settlements, thus commanding the confidence of users. The bank can hang a user’s money for days like in Nigeria, where you have to go fill forms in the bank to release your money from a failed transaction.
The instant settlements offered by the blockchain technology can help the banking system as users would feel more secured if there would not be issues with transaction settlements.
Use of Smart Contracts for Improved Contractual Performance
Smart contracts, which is obtainable in the blockchain technology, is another very secured protocol for transactions. If the bank employ this, the borrowing and lending in the system will be more secured. Smart contracts are automatic and when written, it executes accordingly and can’t be manipulated by one party against another.
The use of smart contract for loans can create a secured loan system in our banks, as nobody will be asked to pay when due. Both banks and individuals would have their services delivered according to a written contract that executes on its own.
Impact Of Cryptocurrency in The Banking Industry
The perceived impact or benefits of using cryptocurrency in banks can never be overemphasized. It is saddening that the banks in Nigeria tends to fight what they should embrace, thus they are actually fighting their own growth.
The world has adopted cryptocurrency and no single industry can fight it. The use of cryptocurrency in banks can help in the following ways:
Improved Service Delivery: Users can have their money sent to loved ones abroad seamlessly by converting it to cryptocurrency. If the bank could offer this type of service, it will boost their customers inflow because of the rapid rate at which the world is adopting cryptocurrency.
Improved Transparency and Trust: Cryptocurrency offers great transparency and trustless transactions. This can benefit the bank immensely if used. For instance, since transactions with cryptocurrency is transparent, there is no fear of loss and users will trust the bank more when they start using cryptocurrency in their transactions.
Conclusion
The blockchain technology and cryptocurrency can revolutionize the banking industry if employed into their operations. The banking industry should sit up and embrace the current financial trend by diving into blockchain technology without delay.
They can build their own network like the Bitcoin network, Ethereum network or Binance smart chain. With their own network, they can compete effectively in the global market.
The time to do so is now.
Thank you and keep being positive with crypto and the blockchain technology.
Hello, I must commend your ability to put up a wonderful piece like this. It is no doubt that the blockchain is relatively new looking at when it was developed but then it is accepted by so many and it is being antagonized by a lot of people.
From the image above, you made it clear that Blockchain should be something that should be adopted and harnessed for better performance and growth which is no lie, and here comes my question;
Question: Do you think the Central Bank of Nigeria is right with its decisions on cryptocurrency in Nigeria? If Yes, please state your reasons and if No, please expatiate on it.
7.5
Actually, my answer is NO. there are actually devaluing our Naira by that decision. Example, Binance, one of the major exchanges can't do business directly with Nigerian banks and that has crippled business with Naira.