How does Blockchain impact established payment systems in FinTech?

Blockchain and the concept of digital payment: it’s a disruptive technology that will undoubtedly transform the world in ways that are hard to predict. It is quite simply a digital ledger and allows transactions between people to be made transparent, publicly. The beauty of it is that transactions are tamper-proof. This means that the ledger cannot be altered. 

It can be difficult to conclude how blockchain technology will affect our everyday lives. That is because blockchain technology is only now being introduced to the world. However, many people predict that it will change how we handle payment information, contracts, and agreements. 

The Blockchain is best suited for micro-transactions where using a traditional payment system is not worthwhile. This technology offers significant implications for payment systems. Transactions can be verified simply, quickly, and cheaply by making payments more transparent. As there is no need for intermediaries in this process it makes for a more efficient payment system. 

The technology transfers data without the need for a third party. That means that people can do business with one another without relying on banks or other financial institutions. This technology is not just for large companies; it is for everyone. Blockchain Technology currently has many uses. Blockchain technology is used to process transactions, manage identities, monitor data, create smart contracts, and take end-to-end security measures.

In the past, the financial services industry has been controlled by a few big banks who have influenced the industry and analyzed the data to create a centralized system that profits them, not the consumers. As a result, a new system has been made that is not controlled by a few big banks but by many decentralized systems like the Blockchain.

What is Blockchain for business and finance?

Since the introduction of Bitcoin about 10 years ago, the technology has exploded exponentially across industries, to which the Financial Technology sector is not untouched. Blockchain, arguably the most popular disruptor in this sector, has created a new way to store more secure, faster, and cheaper data. As mentioned before, the data stored in the Blockchain cannot be tampered with without clear evidence of the attempted change. Therefore it is essentially a digital ledger to which information can be added but not removed. 

Traditional payment methods: In the past, the only way to transfer money from one person to another was through a bank. It is also typical for any company to use a bank to fund its operations in the business world. However, what happens when a bank becomes insolvent? To protect the funds that have been entrusted to the bank, a government will have to intervene and bail out the bank. This can actually lead to a domino effect, where a bank bailout leads to a failed company which leads to a failed economy, which leads to a failed society.

To solve this problem, blockchain technology was created. It employs an immutable distributed digital ledger that keeps track of each transaction that occurs.

How does Blockchain Impact the Financial Services industry?

The blockchain framework is a distributed ledger that records transactions and tracks assets through a network of synchronized, shared blocks. The blockchain protocol relies on cryptography and a network of computing power and monitoring to provide protection and verification of transactions and assets.

This technology can transform the finance sector completely and change business by disrupting traditional payment layers.

Right now, the global payments market is worth around $517 billion. By 2026, global payments' worth is expected to reach $735 billion. These figures highlight the rapid growth of the finance industry.

It is arguably a disruptive technology that can revolutionize traditional payment systems.

The future of money: As technology progresses exponentially, our reliance on cash and other traditional forms of currency dwindles. Despite becoming more technologically advanced, people worldwide will still use some money on a day-to-day basis. Still, it is becoming more challenging to see the future of the banking industry. 

What does this mean for our daily lives?

For starters, you can order food from a completely different country and have it come directly to your doorstep without having to spend hours in line at the airport. Imagine visiting Paris for a week and never having to worry about how you're going to spend your money because you could easily convert your funds from home. In the future, you could order a coffee from a machine in Denver and have it delivered to you in New York. It sounds wild, but the possibilities are limitless.

This technology will change the way we manage money in a safer and more accessible way.

Conclusion

The future of Blockchain is on the rise and on the horizon. With more and more developers and companies coming on board every day, the world's future of quick, secure, and traceable transactions is becoming an inevitable reality.

This technology is expanding to other areas. For example, it is already giving birth to new industries and innovations among established industries. With the advent of the Internet of Things (IoT), Blockchain is set to change and shape the way we interact and do business deals with one another on a global scale. Even though Blockchain Technology has many uses, there are still many more to explore.

While we may not predict what the future holds, we can see how disruptive and powerful this technology has already proven to be. As the use of technology grows, so too will its effects.