Blockchain vs. Traditional Banking: Key Differences

The introduction of the blockchain technology has really been able transform a lot about our world most especially the financial world. It has been able to change the Decentralised nature and helps to change the way we see traditional banking system. In fact I will say it has caused the distance from the traditional banking system. Daily and daily, the Blockchain world continues to change and gain massive popularity all over the world.

The recent misconceptions I will say is that people find it hard to differentiate between the Blockchain technology and the traditional banking system. Let me start by saying that there are a lot of transitions that have taken place from the usual traditional banking systems services we interact with because there has been a massive transition.

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Talking about comparing the Decentralisation nature that the Blockchain technology offer and the centralisation nature that the traditional banking system operates with. With the banks, you will need centralised authority and a centralised protocols to carry out the financial services as either they are subjected to the government, to the central banks and many more. All these middlemen and centralised authority was removed with the introduction of the Blockchain technology.

In a Blockchain technology, there is nobody that is in charge of the funds kind of the centralised authority. Transactions are carried out and recorded on the Blockchain technology without the aid of the centralised authority likes banks or governments we are used. By removing those internediaries, it helps to give full ownership and control for the users over their asset and transactions. This is what traditional banking systems are not capable of offering.

Well that is not even enough of it also. The second difference that exist between the Blockchain technology and the traditional banking system is the transparency nature of the blockchain technology. For the traditional banking system, their services or let me say Financial transactions carried out are always opaque in nature which means it lack this transparency and openness. But when it comes to the Blockchain technology z every transaction is recorded and makes it accessible to users even without the centralised authority.

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The other one I will like to talk about is the security and trust aspect. With the Blockchain, you are rest assured of the security level . When it comes to the Blockchain technology, cryptographic algorithms is used to help secure the transactions that are carried out and this cryptographic algorithms make it always difficult for funds to be hacked or even subjected to fraud also. This makes financial services carry out on the Blockchain technology to be less vulnerable to attacks compared to the traditional banking system.

In conclusion, both Blockchain and the traditional banking system operates differently and have their different nature. Both are here to stay and both are contributing daily to move the financial world and system forward. Even with the lot of benefits that the Blockchain technology offer which I have discussed, it is also still subjected to some drawbacks which the traditional banking system have an edge on. At the end of the day, both have pros and cons.