Cryptocurrency, Blockchain, and NFTs: The Impact On Finance

The launch of Bitcoin reintroduced the world to blockchain technology. Earlier, the talk of the town was whether crypto and blockchain are reliable technology or just a façade.

However, today the crypto market is around $1.23 trillion. The NFTs are also booming to become a multi-billion industry. These are the co-products of blockchain that have proved their utility.

Today, blockchain technology is being used in healthcare, manufacturing, entertainment and supply industries. So, there isn’t any use questioning its worth. Blockchain along with crypto and NFTs have changed the financial sector forever.

From centralized financial services, we are now shifting to decentralized finances with more transparency and security.

How Blockchain, Crypto & NFTs Are Changing The Financial Sector?

Blockchain is the core technology that is transforming the financial sector. Whereas crypto and NFTs are the medium of transformation.

Crypto like Bitcoin facilitates peer-to-peer transparent and secure payments. On the other hand, NFTs have created a global borderless market for artists, musicians and digital creators. Due to its unique tokenising feature, it has added value to assets and made them easier to trade.

Companies related to Banks, Insurance and Consumer Finance sectors are rapidly adopting blockchain infrastructure. There is over a 184% increase in such companies whose official docs talks of blockchain and cryptocurrency.

JSE Limited is South Africa’s largest financial institution to enter into the blockchain space. In a deal with Globacap Technology, the company envisions “establishing a blockchain-enabled private placements platform to enable the raising of infrastructure finance and to allow small-to-medium-sized issuers to raise capital in South Africa.”

Other major financial firms like Silver Gate Capital and Sino Global Shipping American Ltd have also cracked deals with blockchain enterprises.

Here is how blockchain with the help of NFTs and Crypto is redefining the future of the global financial sector.

Decentralized Finances

Blockchain is a distributed ledger technology. It is a distributed and decentralized public ledger that can securely verify and store all transaction data.

Being decentralized no government, institution or group has authority over the blockchain network. It is spread across the world through a network of nodes. Therefore, no one can manipulate the system.

All the data is accessible to the people on the network. Thus, bringing transparency to the system.

Immutability & Secure Transactions

Blockchain technology functions in a way that no one can hack into the system or alter the data. The system is set to cross-check and automatically correct itself in case of a discrepancy.

All the transaction data are securely stored on the blockchain network. Unlike bank servers, no one can hack, change data or run away with your money.

The data on the blockchain is immutable. It means that once a verified transaction is processed on the network, you cannot change the data in any way.

In the finance industry, blockchain technology ensures that the transfer of currency is through a secure and reliable network.

Seamless Money Transfers

Transferring currency internationally is hectic, time-taking and expensive. For decades people, banks and financial institutions have struggled to send and receive money.

But now, several firms and banks have adopted international money transfers through the blockchain network. You can now send and receive money instantly from your smartphones. You no longer have to visit a money transfer facility or wait hours in line.

Moreover, you do not have to pay hefty fees and conversion charges. Cryptocurrencies are global currencies and do not incur conversion charges. However, you will have to pay a small network fee which is way cheaper than the bank’s transfer fees.

Direct Payments

Blockchain technology facilitates direct peer-to-peer transactions eliminating unnecessary intermediaries.

Whether you are sending crypto or NFTs, the underlying blockchain network ensures minimum third-party involvement in the process. Thus, your transactions do not have to go through multiple processing centres.

Each step in the transaction process adds more complexity, fees and delay in the process. But, blockchain eliminates all these unnecessary stops in the transactions.

Final Thought

The use of blockchain technology among financial companies and banks has increased rapidly in the last few years. Blockchain is simplifying the financial processes making them more transparent, quick, accessible and secure.

Blockchain along with crypto, NFTs and other Web 3.0 concepts is rewriting the future of global finances.

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