Effective Ways In Which The Blockchain Technology Has Improved The Financial System #002

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Hello great minds, I believe you are all doing perfectly fine and are enjoying your activities in the community.

It is another day and I feel happy to come before you all today, and guess what? We shall be discussing ways in which the blockchain has improved the financial sector.

Please join me as we unveil this wonderful adventure, and as I promised we shall be discussing on three bulletin points

REDUCTION OF FRAUD BY ELIMINATING INTERMEDIARIES

The blockchain plays a very important role in reducing fraudulent activities in financial transaction by eliminating intermediaries from the system.

The traditional systems are often dependent on intermediaries to help facilitate their financial transactions and these intermediaries control very sensitive financial data which makes it susceptible to fraudulent activity.

The blockchain technology on the other hand operates using nodes of computers which helps in the verification of every transaction in a block.

With the use of a blockchain technology, it is difficult for any fraudulent activity to take place because all transactions are not controlled by the authority, rather they are being done by the blockchain node.

The immutability feature of the blockchain also plays a big role in ensuring that fraudulent activities has no place in the blockchain.

In the blockchain, each transaction in a block is connected to it's previous block through a unique cryptographic hashing thus creating a chain of blocks.

The immutable feature of the blockchain ensures that every transaction made is tamper proof and cannot be altered, thus giving room for a more transparent financial transaction.

ENHANCES EFFICIENCY IN PAYMENT PROCESSING

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The traditional financial system like the banks often rely on the central authority for the verification and settlement of financial transactions but the blockchain on the other hand which operates on a decentralized network of nodes assembles and validate these transactions collectively.

This removes the need of the central authority, further avoiding any transaction delay such as downtime, thus guaranteeing continuous financial transaction processing.

The blockchain technology supports the use of smart contracts, and this helps to automatically execute a transaction once a pre-defined rules are met.

When it comes to the facilitation of financial transactions, the blockchain smart contracts helps to automatically execute a payment once a pre-defined rules are met, thus eliminating the need of manual processing or the need for an intermediary.

Another way the blockchain enhances efficiency in payment processing is that unlike the traditional financial system which takes days to verify a cross border transactions due to the presence of numerous intermediaries, it(blockchain) uses the p2p to enable near instantaneous settlement, thus bypassing the need for an intermediary.

ENHANCES STREAMLINED BORDER TRANSACTIONS

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Another advantage of the blockchain technology is that it helps to enhance a streamlined border transactions by providing a transparent, efficient and secure platform for the management of cross border transactions and the exchange of data.

The blockchain is immutable in nature and this implies that every cross border transactions stored on the blockchain cannot be deleted, thus reducing the risk of fraud in the Financial system.

Also, the blockchain provides a transparent platform where all can easily monitor and verify the transaction going on the blockchain, thus increasing trust in the system.

The traditional system as explained earlier due to intermediaries often take days to verify a cross border transactions but with the application of a blockchain technology, this can be verified within a very short period of time through what is known as the peer to peer network.

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CONCLUSION

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As promised from our previous meeting, we have discussed 3 ways in which the blockchain Improves the financial system but there is more which will be unveiled in our next discussion.