Canadian Business News

Is Blockchain Technology Really the Future of Banking?

Blockchain technology, an umbrella term for the technology behind bitcoin, is emerging as the science to look forward to in the future.

The world of banking is changing. The Financial Times reports that banks are throwing their weight behind blockchain technology, investing in the industry’s future. Blockchain, a type of distributed ledger technology (DLT), can be used to process transactions and store information securely on multiple computers at once- rather than a centralized server controlled by an individual company or government institution.

A publically distributed ledger in a bitcoin transaction is called a blockchain. Bitcoin, which is a payment system, works on a peer-to-peer network basis. Experts now believe that Blockchain technology could create a global network of trust and change banks’ function.

This time the narrative is not just limited to bitcoin. Blockchain technology can be used in various spheres of life, and banking seems to be the primary and most important one everyone is interested in. Experts claim that blockchain technology, which uses the cloud-based ledger, can make banking a different experience.

The block will remain a comprehensive and secure financial ledger. It will enable people and companies to exchange digital money, which would help them avoid expensive intermediaries such a payments companies like Visa, MasterCard, PayPal and traditional banks.

Blockchain, which is a company launched in 2011, has no official capacity in the blockchain world. However, it has become one of the most trusted names. The company developed the bitcoin wallet, which is the platform through which users buy and sell bitcoins.

The companies make their money from advertising; the wallets themselves are free to the user. It also completed a US$30-million Series A funding round. The investors included Richard Branson, London-based Mosaic Ventures, and Silicon Valley’s Lightspeed Venture Partners.

This funding makes the future seem bright for the company. It plans to expand bitcoin’s use and eventually start earning money from partnerships with international players who want to benefit from the bitcoin and blockchain revolution.

Bitcoin is now accepted by 100,000 retailers, including big names like Dell and Microsoft. The number of transactions made too has increased double fold.

Nicolas Cary, CEO of the London-based company Blockchain, describes bitcoin as “money, improved”. Digital money can be used anytime, and it is secure, he said. Since the blockchain records every transaction, it is easy to monitor, and there will be no doubt whether someone who is supposed to be sending you funds has the required amount or has sent it.

He also added that digital money is just the primary step for bitcoin. The blockchain system, security, identity management, even national voting systems could be redesigned to use the blockchain’s authority and transparency.

However, it is important to remember that the blockchain systems will have to be more comprehensive. The payment system will need to cater to many more transactions per minute to be used on such a grand scale.

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