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The Impact of Upcom­ing Cryp­tocur­ren­cies on the Finan­cial Indus­try

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Upcom­ing Cryp­tocur­ren­cies are Caus­ing a Finan­cial Evo­lu­tion

In 2009, Satoshi Nakamo­to cre­at­ed Bit­coin part­ly in response to the 2008 finan­cial col­lapse. He envi­sioned a pure­ly peer-to-peer finan­cial sys­tem in which you don’t have to trust third-par­ty insti­tu­tions to make trans­ac­tions. Now, there are hun­dreds (if not thou­sands) of upcom­ing cryp­tocur­ren­cies that have built on Bitcoin’s foun­da­tion. They’re here to enhance the finan­cial indus­try in the same way that Bit­coin did for sim­ple trans­ac­tions.

In this arti­cle, we exam­ine the impact that these upcom­ing cryp­tocur­ren­cies are hav­ing on the world’s largest indus­try – finance.

Exist­ing Insti­tu­tions Oper­ate More Effi­cient­ly

With prod­ucts already avail­able, some cryp­tocur­ren­cies, most notably Rip­ple and Stel­lar, are work­ing with exist­ing insti­tu­tions to make their sys­tems more effi­cient.

The Rip­ple Trans­ac­tion Pro­to­col (RTXP) is a net­work of finan­cial insti­tu­tions on the blockchain. Any com­pa­ny using the pro­to­col can trans­act with any oth­er par­tic­i­pant at a frac­tion of the time and cost it would take in a tra­di­tion­al sys­tem. This is espe­cial­ly ide­al for glob­al pay­ments which can typ­i­cal­ly take 3–5 days and cost par­tic­i­pants $1.6 tril­lion annu­al­ly.

Start­ed by a Rip­ple team mem­ber, Stel­lar is mak­ing a sim­i­lar impact on the finan­cial indus­try. The project has joined forces with IBM to also facil­i­tate bet­ter cross-world pay­ments. Some Stel­lar sup­port­ers argue that the project’s token eco­nom­ics lead it to be a more decen­tral­ized solu­tion than its coun­ter­part, Rip­ple. How­ev­er, there’s room for both in a mas­sive­ly inter­con­nect­ed world.

You Have Full Con­trol of Your Mon­ey

One of the great­est val­ues that blockchain brings to the finan­cial indus­try is mon­e­tary con­trol. With this tech­nol­o­gy, you no longer have to trust a bank with your mon­ey. It’s stored on an immutable ledger that’s near­ly impos­si­ble to manip­u­late or hack.

Real­ly, any upcom­ing cryp­tocur­ren­cy serves this pur­pose. With them all using blockchain tech­nol­o­gy (or some­thing sim­i­lar), your faith is in the coin’s open-source code rather than any cor­rupt­ible insti­tu­tion. With cryp­tocur­ren­cy, it’s impos­si­ble for some­one to freeze your funds or tell you where and when you can spend your mon­ey.

Your wal­lets, pri­vate keys, and funds are entire­ly in your con­trol. This is rule num­ber one for any rep­utable cryp­tocur­ren­cy.

Trans­ac­tions are Tru­ly Peer-to-Peer

Blockchain tech­nol­o­gy also elim­i­nates the need for mid­dle­men in trans­ac­tions. And, there are plen­ty of upcom­ing cryp­tocur­ren­cies using that fea­ture for good use. The big play­ers like Bit­coin and Lite­coin spe­cial­ize in these types of trans­ac­tions, but there are some small­er projects you should be aware of as well.

Nano has gained some pop­u­lar­i­ty for its lack of fees and near instan­ta­neous trans­ac­tion times. Because Nano uses the direct­ed acyclic graph (DAG) algo­rithm instead of a typ­i­cal blockchain, the net­work becomes more effi­cient when more peo­ple are using it. Although not as bat­tle-test­ed as big boy Bit­coin, the cryp­tocur­ren­cy could have a promis­ing future for free peer-to-peer pay­ments.

Anoth­er project, Request Net­work, is expand­ing beyond sim­ple peer-to-peer pay­ments by build­ing a Pay­pal-like blockchain inter­face. Using their plat­form, you send and request mon­ey while avoid­ing third-par­ty inter­me­di­aries. But, the team isn’t stop­ping there. They’ve cre­at­ed an entire mind map for all of the ways they want to change the finan­cial indus­try. Crowd­fund­ing, pay­ments, point-of-sale – the team is attempt­ing to fix it all.

More Peo­ple Have Access to Bank­ing Ser­vices

Most impor­tant­ly, upcom­ing cryp­tocur­ren­cies are bring­ing bank­ing ser­vices to the 2 bil­lion peo­ple around the world with­out banks. Whether they can’t afford it, they don’t qual­i­fy, or the coun­tries they live in are lack­ing in bank­ing insti­tu­tions, this group of peo­ple is com­mon­ly under­served.

Many upcom­ing cryp­tocur­ren­cies are mak­ing bank ser­vices more afford­able and more avail­able to the unbanked. With Stel­lar, finan­cial insti­tu­tions can afford to offer low-cost accounts as well as loans with more favor­able inter­est rates. Now, a busi­ness own­er in a devel­op­ing coun­try can more eas­i­ly get a loan, stim­u­lat­ing the econ­o­my in the process.

Even cryp­tocur­ren­cy exchanges are hav­ing an unlike­ly effect on the finan­cial indus­tries of unbanked nations. For exam­ple, Binance recent­ly announced an ini­tia­tive to trans­form and improve Uganda’s eco­nom­ic land­scape. They’ll be doing so by prov­ing youth employ­ment through blockchain.


@binance will part­ner with @cryptosavannah @AggieKonde @HelenHaiyu to sup­port Ugan­da’s eco­nom­ic trans­for­ma­tion and youth employ­ment through blockchain, embrac­ing the 4th indus­tri­al rev­o­lu­tion. We will do this by cre­at­ing thou­sands of jobs and bring­ing invest­ments to Ugan­da.
10:18 PM — Apr 22, 2018
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An Entire New Finan­cial Infra­struc­ture Could Exist

Mov­ing past tra­di­tion­al finan­cial struc­tures, it’s even pos­si­ble that a new tech­no­log­i­cal infra­struc­ture will be pow­er­ing the entire finan­cial sec­tor soon.

Wan­chain is just one project attempt­ing to build finance from the ground up. Instead of tying into the cur­rent infra­struc­ture, they’re build­ing their own. Their goal is to cre­ate an entire blockchain-based ecosys­tem in which any­one can build finan­cial ser­vices on. Wanchain’s suc­cess could mean that phys­i­cal banks dis­ap­pear, becom­ing (decen­tral­ized apps) dapps on the blockchain instead.

This is Just the Begin­ning

Blockchain tech­nol­o­gy is already begin­ning to have a mas­sive effect on the finan­cial indus­try. With estab­lished cryp­tocur­ren­cies like Bit­coin, you get a secure store of val­ue, trust­less peer-to-peer pay­ments, and com­plete mon­e­tary con­trol.

Oth­er upcom­ing cryp­tocur­ren­cies are mak­ing sig­nif­i­cant impacts as well. Beyond dig­i­tal trans­ac­tions, new­er projects are specif­i­cal­ly focus­ing on help­ing the unbanked, mak­ing blockchain tech­nol­o­gy more scal­able, and pro­vid­ing func­tion­al inter­faces.

As these and more cryp­tocur­ren­cies con­tin­ue to improve the finance sec­tor, it won’t be long before our cur­rent finan­cial infra­struc­ture is a thing of the past.

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