Blockchain to Level Banks

Blockchain simple to understand hard to imagine

Will banks be a thing of the past?

Blockchain is a simple concept. Where it gets complex is trying to understand all the different blockchain networks being built and what purposes they may ultimately go in
to.

It's like the beginning stages of any new industry. When development of the car first started, there were independent builders scattered all over the world. No one quite knew where it would go, what it would lead to, or who would be left standing at the end.

Many builders fell by the wayside, others maintained equilibrium but eventually, an entire industry was born. And out of that, a complex network came into existence. There became parts suppliers, auto dealerships, gas stations, repair shops, salvage yards etc.

Blockchain is somewhere on this path. So far, a hundred or so blockchain start-ups have sprouted up. But just as quickly as they have arrived, they have also departed.

The problems they are experiencing is a fair amount of resistance from established institutions, vague notions of what blockchain is, and not enough participation to develop the connections needed for the whole thing to get up and running.


However it develops and by who, when it finally does, look out. Experts predict savings for banks, financial institutions, insurance companies etc, will be in the billions annually. And applications for the technology could go into virtually any industry.

What is blockchain?

Blockchain is like a ledger, storing information to keep a record of events and transactions that can be accessed later. But it does this digitally so data can be captured at lightning speed. The information stored stays secure due to the fact that a transaction can only be approved by the two parties involved. It is also impossible for the information in a blockchain to be tampered with because a single transaction is part of a larger chain of thousands or even millions of others transactions.

For example, if blockchain was the system used for a monetary purchase, a person could buy an item from a vendor with electronic currency. The record of that transaction would be kept by the blockchain. The buyer and seller would also have a copy of that transaction.

Since the blockchain would have all information related to that electronic currency, any attempts for theft would require undoing thousands of other transactions. 

In bitcoin, the blockchain system records the digital information the bitcoin emits - a long coded digital number. When that bitcoin is traded, the electronic pathway it travels becomes a digital footprint that never disappears. Imagine if a dollar had its entire history recorded. Every time the dollar changed hands, when and by whom, and for what commodity, a written record would capture the transaction.   

Blockchain to end banks?

Blockchain can do the same with all sorts of information, making person to person transactions secure and much more efficient. Banking, for example, will change drastically. Banks will simply disappear. Why do physical banks need to exist with no need to store money and administer transactions?

The answer is obvious but the question is how long will this process take? Investment in blockchain is starting to accelerate. SBI Holdings, Google, Overstock.com, CTI, and Goldman Sachs have been the biggest investors so far the past year.

And what will this bring the average person? On the surface, it could mean cheaper banking, insurance, stock trading; better healthcare. More efficient business and more convenience all around. A little deeper, it could it mean a huge economic boost. But like all technology advancements currently being promised. When? When?

Sources:

https://www.slalom.com/thinking/how-blockchain-will-disrupt-your-industry
https://www.quora.com/How-do-blockchain-businesses-make-money
http://www.investopedia.com/terms/b/blockchain.asp
https://www.cnbc.com/2017/10/18/google-goldman-sachs-investors-blockchain.html