The prospects that are offered by blockchain technology are innumerable. Post the financial crisis of 2008 rose an entity in the name of Bitcoin that proclaimed to change the way how the international financial framework operated, it still does. Underlying this asset was blockchain technology, a decentralized and transparent framework of operation.
Right now, sending money and assets across the borders in any country is one hectic procedure. Usually, it takes days to send money to someone living on the other side of the world. So, how does blockchain solves this issue?
Through the employment of blockchain, the network of operation that is formed is global. Usually, nodes that are running a blockchain are sitting in different countries. Bitcoin blockchain has coverage transcending borders and one can make payments to someone sitting on the opposite side of the globe in a matter of minutes. Now besides being global, blockchain also changes the financial arena due to the other prospects that it offers.
Transparency is one of the biggest features that blockchain offers. In a blockchain-based network, specifically designed, all the happenings of the network are visible to all. In this way, a transparent fabric of operations is established that keeps the entire ecosystem clean.
Decentralization is also another prospect offered by this nascent technology. In traditional financial frameworks, central banks and authorities have control over the flow of the money. Even local transactions involving money transfers require users to pay the banks a certain amount of fee. In international transactions, this process is even lengthened and the fee is increased to a much greater extent. Before reaching the other end, the money has to pass through various checkpoints, such as banks, and each checkpoint generally charges its fee.
In a decentralized blockchain network, there is no central body in charge that controls the flow of money. The only fee one has to pay for an international transfer usually includes the network fee. Blockchain also takes care of the double-spending problem by keeping all the transactions immutable so that once someone has used a part of its digital currency, it does not use that again.
Overall, if used properly, blockchain can shorten up the extremely lengthy process of international payments currently employed in the world to a much large extent. Besides individual-level international money transfers, blockchain technology can also change the financial framework that is currently employed between the major financial institutions of the world. There are still a lot of issues associated with this nascent world as of now, but as we move forward, it will be interesting to see how this technology affects the global financial system.