Blockchain Will Do The Same To The Financial System What Internet Did To Media
The Internet is playing a role of an influencer in our lives, it has changed the way how we buy goods and services, how we communicate with our friends. In 1990s Nicholas Negroponte, an American Architect predicted that soon we will be reading news online than reading on the newspaper.
If we fast forward to decades; will we be seeing similar kind of changes in the financial world because of Cryptocurrencies. There are some similarities that can be found like internet digital currency is also decentralized with layers, these layers are interoperable open protocol on top of which individual and companies can build their products and services. Like the internet, blockchain is the strongest technology if everyone uses the same network.
The internet and its layers took many years to develop and attain its present stage.
Too much too soon?
The excitement of fintech startups is far more ahead than the actual development of the technology. The blockchain technology that we are seeing today is more of the database and is not exactly innovative, calling them blockchain now is merely a jump on the buzzword bandwagon. A similar situation happened before the emergence of the actual internet. Many “pre-internet” players tried to provide interactive multimedia services, but unfortunately, none of them existed. The similar kind of trend may happen for blockchain as well.
The current scenario is the combination of incumbent financial institutions trying to make some incremental improvements and new start-ups are trying to make some innovation on it, hope this quicksand hardens soon.
In case of digital currencies, we are seeing far more insistent venture capital investment than what we had seen in the case of the internet when it was in its early stage of development. This is where it is d\different from the internet, as they have not seen the decades of obscurity where noncommercial researchers could iterate, rethink and experiment in the architecture. This is the reason extensive research is going on in MIT media Labs on these currencies.
The financial system that we are in the present day is very complex and this complexity is creating risks. The new financial system that can be made through blockchain based Cryptocurrencies can minimize the risk by removing the layers of intermediations. It can open up the possibility of different types of financial products. It can open up the financial system to those people who are currently excluded. Research has proved that transparency in the system reduces the intermediation chains and costs to users of the financial system. Click Crypto Soft Review to know more.