It seems contradictory to tittle the article ‘beyond money’ whilst talking about banks. But today, we aren’t going to be looking at blockchain uses in the cryptocurrency context. Rather, we are going to explore how blockchain technology can streamline the banking system to make it faster and more accessible.
To most, digital currencies are just an investment or a business wherein their goal is to drive a profit from the cryptocurrency. However, national cryptocurrencies could have a much larger impact on their communities, not necessarily because the dollar is inadequate, but because our current financial and banking systems are outdated. These banking and financial institutions are private ones, not looking to make your purchases, transfers and or financial holdings safer and more accessible, but aimed at making a profit. Blockchain would be able to decentralized these private institutions finally a establishing a free and fair banking system that is accessible to all Americans.
The most noticeable flaw in our financial system that we have all experienced is how slow transactions can be. Anything from deposits to transfers typically takes a couple days for your bank or financial institution to process. That is because banks, as central institutions, must each update their own ledger, and process the correct transactions so other banking institutions can receive their appropriate funds and update their own ledger. This inter-institution communication can be lengthy, and due to a lack of trust in the system, banks often hold your money even after it has been processed by your bank as a fraud prevention tool.
Blockchain could help make all of this a lot quicker. Rather than having each institution hold their ledger, having a decentralized one that is operated and edited by all members of the network would allow for transactions to be processed more quickly. The cryptocurrency being used would have a set time of when the ledger is updated, in Bitcoin’s case it is every 10 minutes, meaning that every 10 minutes, the pending transactions are processed and attached to the ledger, instead of it taking a couple days for your money to be processed.
Considering the ledger is publicly available information to those who have a personal network key, the transactions would be more transparent to all users. Lastly, because of the proof of work necessary to add records on to the ledger, blockchain is nearly hack-proof, requiring a massive amount of computing power and organization to overthrow a trusted network and alter the ledgers.
In addition to streamlining the banking process, blockchain technology would give banking access to thousands of Americans. In the rural mid-west, brick and mortar banks aren’t widely available, and completely online banking options are so limited today that most of these families simply don’t have access to banking. Creating a decentralized banking system would ensure that all communities have access to their bank account. Of course, this will only be possible once broadband access is guaranteed across the nation as well.
Ultimately, blockchain technology could completely revolutionize and streamline the way we use our money every day. Banking institutions continue to hurt the public through scandal after scandal, often affecting the most marginalized communities. American banks think they can take advantage of the consumer because they are part of the ‘too big to fail’ corporations, but that is until a better system presents itself, and the people demand it be implemented. Blockchain is the future of societal development, hiding from it will only hinder our progress.