Opinion: Blockchain technology can transform the financial industry

Blockchain, a shared, fixed ledger that facilitates the process of recording transactions and tracking assets in a decentralized network, according to US News, is one of the leading innovations in the financial industry and can transform everything from payments transactions to investment funds.

This type of technology has many applications that can be integrated into the financial industry, which results in many investment opportunities such as cryptocurrencies and NFTs, according to CB Insights.

The use of blockchain has many benefits for the financial industry, as companies are in a race to reduce the costs and friction of transactions, and this technology can make financial services more transparent, less susceptible to fraud and cheaper for consumers, according to IBM.

First, because blockchain technology is on a public ledger, scams can be traced and prevented. In addition, payments and money transfers made on the blockchain can easily be traced and there will be less concern about scams and fraud.

Blockchain also has cryptographic algorithms that bring security in the exchange of information from financial intermediaries, according to CB Insights. Next, because of the decentralized ledger for transactions, blockchain technology can facilitate faster payments at a lower fee, according to US News. Furthermore, search and information costs are lowered.

With all these benefits,  blockchain has the potential to not only change the financial industry but also possibly replace financial services provided by banks. Blockchain technology has a ledger that nobody administers, which can allow payments and securitization to happen without the need for a bank, according to CB Insights.

For example, if people want to send money from one bank to another across the world, there are flat fees for wire transfers, and additional fees depending on how much they send, according to CB Insights. Moreover, it can take up to a week for the money to arrive at the receiving bank.

Cryptocurrencies like Bitcoin or Ether, on the other hand, which are built on public blockchains, can give anyone access to fast, cheap and borderless payments. Bitcoin payments take an average of ten minutes to settle, according to US News, which is a lot better than the average three-day processing time for bank transfers.

Considering the potential that blockchain has, it is a noteworthy investment opportunity to consider. Possible investments can include buying cryptocurrencies like Bitcoin and Ethereum or investing in blockchain stocks and ETFs such as Microstrategy Incorporated, Square Inc and International Business Machines Corporation.

All in all, blockchain technology can transform the financial industry and has the innovation and growth needed to make it a great investment for the coming years.