By: Manasi Dubey
Fintech, as the name suggests is nothing but how traditional financial industries incorporated technology in the sector. If you are still thinking about what I am talking about and to bring you to the same page, I will give you an example. I am sure you all have used ATMs or maybe debit/credit cards for that matter. We didn’t have all these back in the ’50s.
Right? So, from where did people used to get their money? From banks obviously. You see, those people or I should say even today when you go to a bank, you need to spend a lot of your time to reach there and not just that, you might even have to stand in long queues for your turn. But with nearby ATM or a debit card at hand, it all becomes a matter of a few minutes or even seconds. So, this is how technology has helped us and the financial sector to get things done in just a blink. But it’s not all done. With rapidly changing and evolving technologies, we can make Fintech more revolutionized. And here I will talk about how the most hyped word these days i.e. Blockchain is, will or can disrupt the Fintech industry.
But before delving into the topic, let’s first define what a Blockchain is. Alright? So, Blockchain is a chain of blocks. Wow! What a definition! I know, I know. Just hear me out. So, when I say the words “block” and “chain”, I am referring to digital information i.e. the block which is stored in a public database, the chain. Public database because the information or the data is not stored in a single place but is distributed or decentralized, so instead of one person controlling everything, there are hundreds or even thousands of nodes or computers around the globe connected through the internet and these nodes try to come to a consensus on which information or maybe a transaction is valid. So, no single person has any authority or power to make changes to any of your data, thus eliminating any kind of manipulation or fraud. Trust is what a Blockchain is based on.
Okay then. Let’s finally talk about how Blockchain is a game-changer for fintech. We know that with technology, there’s always a concern of trust and security. Who is using our information, how are they using it, for what purpose? All these dilemmas keep us on our toes every time we share any of our personal information online. Fintech also faces the same challenge. As you guessed it right, here’s where Blockchain comes into the picture. By collaborating Blockchain and Fintech, a decentralized network is created. This helps to transfer or share unaltered data, even curbing data breach and other similar fraudulent activities, by making all concerned parties aware of such activity in financial transactions. Some Fintech companies like Circle, Robinhood, Veem, Ripple, Stellar, Bitpay, etc. have already implemented what I just suggested above. It’s not just about Fintech only, Blockchain can be a game-changer for others as well. It’s just a matter of time when we will call Blockchain as a new “Internet”. So, don’t just wait.
Try exploiting it in whatever way you can and be a revolution.