Blockchain Technology is a decentralized and distributed ledger of transactions that records information and tracks assets in a business network and known as the technology that enables the operations of Bitcoin, Ethereum, and all the other 4000 cryptocurrencies, making it the most important innovation the era of finance and digital transformation.
“It creates a never-ending chain that continues on and on as long as there are active people using it,” Benjamin Xie, a lecturer in cryptocurrencies and related topics at EU Business School.
Blockchain in the Fintech Industry:
Fintech and Blockchain Technology merge well. Cryptocurrencies were the first use cases of the distributed ledgers, and crypto assets can be traded on the financial markets.
In addition, the financial industry is the first industry in adoption ranking for Blockchain Technology, and nowadays banks are using blockchain technology to record and update data in more effective methods.
Blockchain technology is essential in the following areas:
Banks have their own security algorithms for user identity. Concerning their clients, they do security checks for their daily operations like balance report, transactions history, passwords, and security protocols like using KYC (Know your customer) tools.
However, through blockchain, they can transfer funds, share data in real time, and perform other bank-related activities such as loans, claims, and drafting. Also, since the data stored on blockchain networks is much safer than traditional volumes, fintech organizations prefer it for the software requirements.
Most trading companies require papers to do payments and transfers. Except that, since Blockchain is a generalized ledger, data is updated in real time making it is easy to trade while reducing shorting risks and improving accountability.
Blockchain supports decentralized currency and blockchain payments are very secure since transactions should be approved to take place, and everyone can check the updated ledger after each transaction.
Blockchain doesn't require a third party to transfer funds, it can go through P2P transfer.
Investment banks require account history and financial details before conducting investments for their client. Through cryptocurrency, it’s very easy to validate accounts and maintain an investment ledger.