Before we take a look at different ways emerging blockchain technology revolutionized the global financial market, let’s see how blockchain technology works. Essentially, blockchain technology is a well-functioning, advanced system for collecting and storing information. Ways in which blockchain technology stores and record information makes it virtually impossible to hack the system.
You can also think of blockchain technology as a digital ledger that safely stores funds. Blockchain technology is also built upon different blocks within the same network. Every single time a transaction occurs within the blockchain network, a unique record of the transaction is included in participating ledgers. When discussing how blockchain technology works, we also have to mention DLT or Distributed Ledger Technology.
Essentially, blockchain is a special kind of Distributed Ledger Technology that records transactions by hashing or adding unique cryptographic signatures to make transactions as secure as possible. Blockchain technology is also closely related to Smart Contrasts that make the entire technology easily to program. Blockchain technology is also immutable and anonymous, meaning that validated transactions cannot be changed, while the identity or participants’ ledgers is pseudonymous or anonymous.
Blockchain Technology and Its Impact on the Global Financial Market
Today, blockchain technologies are utilized by many different industries. One of these is the media and entertainment industry. Blockchain technology has also revolutionized the way players enjoy online casino gambling sessions. For instance, at FairSpin Casino and other similar iGaming sites, players can make hassle-free crypto deposits and withdrawals. Gaming at iGaming sites that utilize blockchain technology, players also do not have to worry about the safety of their funds or their personal information being compromised in any way.
Other industries that are positively impacted by blockchain technologies are automotive, transportation, manufacturing, oil and gas, telecommunications, insurance, healthcare, and of course financial industries and banking in general. So, how exactly is blockchain technology impacting the global financial sector?
As mentioned at the beginning, blockchain technology is an easily distributed, completely decentralized, and safe public ledger that records hundreds of transactions in real-time across numerous platforms within the same blockchain network. Due to its properties, blockchain technology cannot be altered which makes it extremely safe. When it comes to blockchain technology and its impact on the financial sector, its two main features, including immutability and distribution, had the biggest impact.
Blockchain Technology Benefits for the Financial Markets
Throughout the public blockchain network, numerous copies o the same blockchain ledger are in existence. Everyone within this ledge gets a copy of the ledger every time a new transaction occurs. Blockchain transactions occur without any central government since the whole system is designed to give everyone the same information, while nobody has control over the system.
Blockchain technology also offers a chronological, accurate history of all past transactions and since everyone involved has a copy of the ledger, it is virtually impossible to ease or alter blockchain transactions, making it perfect for a whole number of different Blockchain projects.
These are huge benefits for the financial market, especially when it comes to money transfers. According to this report by Statista, the blockchain financial and banking market was valued at around US$0,28 billion back in 2018. In 2021, the market’s value was around US$1,46 billion, while it is expected to reach a value of around US$22 billion in four years from now.
Blockchain technologies incorporated the right way make international money transfers way more cost-effective and less time-consuming. Blockchain-based international and domestic money transfers are also faster and rather inexpensive as commission fees may not even apply. These are just some of the many other benefits of blockchain technology in the financial markets. Looking into the future, we can expect to see more financial institutions embracing the amazing potential of blockchain-based transactions.