Blockchain is changing the world as we know it. The developments we may be immediately seeing and reading about in blockchain news may be noteworthy now, but the potential impact of blockchain on banking may revolutionize the entire industry.
Money makes the world go round so it’s hardly surprising that so much blockchain news concerns itself with financial issues such as cryptocurrency, Bitcoin stocks and Ethereum stocks. The role blockchain could play in the banking world at large is even less surprising considering it originates with Bitcoin. To understand why blockchain has such an impact on the financial industry, it’s important to look not just at trends in Bitcoin news or other blockchain news but to understand exactly how blockchain works.
Blockchain was first developed by Bitcoin, a type of cryptocurrency.
While Bitcoin news and Bitcoin stocks continue to garner the most attention among all types of blockchain programs and cryptocurrency, blockchain has since been adapted to form other types of cryptocurrency.
Ethereum stocks, for example, have become a hot topic and Ethereum tokens are being adapted to hopefully power internet service providers. Ethereum news is second in popularity to Bitcoin news at present moment but the volatility of blockchain stocks means that could change at any moment.
Blockchain allows for the creation of secure, decentralized platforms which if used for banking, could change everything. While a decentralized platform may seem risky, blockchain allows for the formation of totally private yet commonplace platforms because blockchain is secure by design. So how does this design work?
Blockchain is a growing list of records called blocks which are linked and secured together in a chain using cryptography.
Each block contains a hash pointer as a link to a previous block, a timestamp and transaction data. This formulation makes blockchain secure by design as it is inherently resistant to modification of its data. While blockchain can be used for a variety of highly secure functions such as transmitting medical records, blockchain’s most popular use is for cryptocurrency. But the buck doesn’t stop there; blockchain and cryptocurrency may change the actual infrastructure of centralized banking institutions.
In conjunction with enterprise software firm SAP, innovator James Zdralek has been working on a way to merge cryptocurrency with current financial instruments which might make national currencies appreciate in value. But how?
New types of cryptocurrency like those proposed by Zdralek would involve national currencies backed by blockchain based cryptocurrency which are then in turn backed by the output of a nation’s industries and gross domestic product.
In theory, this new blend of national currency, cryptocurrency and domestic product would create a currency which is not only stable and inflation proof but has a a natural interest rate.
A natural interest rate isn’t determined by government regulation or other policy but by actual market conditions.
When we combine the security of blockchain and the flexibility of cryptocurrency with banking infrastructure, the result is superior to flat currency, Bitcoin stocks, Ethereum stocks or any type of blockchain stocks by themself. Sometimes the result is equal to more than the sum of its individual parts and that holds true with blockchain and financial institutions.
Last year, Zdralek has shopped the blockchain currency concepts to central banks at two of SAP’s Executive Central Banking Summits. He has since begun exploring the ideas within the world of academia which has taken a keen interest in the study of Bitcoin news and Ethereum news since cryptocurrency remains largely misunderstood by the general population.
Can the use of blockchain and cryptocurrency have global economic benefit?
Innovaters like Zdralek often have ideas so potentially cutting-edge, they seem risky or unknown. By disseminating potential benefits and uses of blockchain and cryptocurrency for global economic benefit within academic circles, Zdralek hopes his ideas will gain traction with visionaries in the business and financial world. While cryptocurrency may still seem mysterious to some who perceive blockchain stocks as unnecessarily volatile, there was once a time credit cards were barely conceivable to the average American. As our understanding of cryptocurrency expands and the potential uses of blockchain grow past Bitcoin stocks, we could see banking premises like the one proposed by Zdralek become commonplace blockchain news just as we see credit card ads everywhere today.
Zdralek himself has made comparisons between the seeming complexity of potential cryptocurrency with credit systems himself. Although the mechanisms behind swiping a card actually involve complex codes and networks, it’s seemingly so easy to swipe a card as the user. Blockchain can allow for new types of cryptocurrency which although they rely on mathematical formulas, could be just as easy to use as a debit card or ATM is today.
Blockchain and cryptocurrency could be used to secure financial information and transactions.
While still gaining traction in blockchain news, Zdralek’s ideas aren’t without an audience. Traditional banking institutions impacted by fraud have taken an interest. Since Zdralek and other innovators are still just on the forefront of cryptocurrency technology, it’s hard to say how long before, or even if, these kinds of ideas will ever be implemented. To know for sure, you’ll have to keep up with blockchain news generally and Bitcoin news and Ethereum news more specifically as the latter two are so influential across various platforms.