The idea of a blockchain – which has been around for almost 30 years – is regarded as having the potential to completely change the way the financial services industry does business. Christine Lagarde, Director at International Monetary Fund, made the important statement: “cryptocurrencies could displace central banks and international banking,” placing pressure on traditional financial services firms to change their way of working.
Transactions made on the blockchain are cheaper and quicker than using traditional financial services companies, and they are documented, making it transparent. The most impressive feature of blockchain is that it provides unsurpassed security in an unsecured internet – where phishing and malware can compromise the data of individuals and jeopardise the way business is done around the world.
While blockchain’s original purpose was to power bitcoin – the first decentralised digital currency – society is now beginning to benefit from blockchains many applications such as verifying the providence of diamonds or tracking food – so recalling contaminated produce would be easier to do – or even paying the dentist. How? By being transparent and accessible to all.
When you buy a football shirt, how do you know it’s real and not counterfeit? From the manufacturer to the club to the shop, you can keep a record on the blockchain that’s impossible to alter once it has been made. It is possible that in the near future football fans will be able to scan a barcode on an item of merchandise and be reassured that it’s an official product. Similarly it could bring transparency to the sale and resale of tickets.
Investors and technologists are keenly aware of the many benefits of blockchain technology and expect it to feature in the future of the financial services industry, as well as countless other industries. To what extent isn’t quite known, but the possibilities are endless.
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