Progression of Blockchain Technologies and Their Integration into Our Payment System

It has been over a decade since the blockchain was invented and, as it seems, we are just beginning to scratch the surface of what the revolutionary technology has to offer. Even in its infancy, it has spawned a number of applications that have disrupted several industries and sectors all across the globe thanks to some of the undeniably impressive features that it offers. These include decentralization, transparency, and immutability all of which are very attractive especially in the increasingly technologically connected world that we live in right now.

The Increasing Potential of Digital Currencies

Needless to say, no other word is more synonymous with blockchain than cryptocurrencies. After all, they arrived together and largely rely on each other. Cryptocurrencies, otherwise referred to as decentralized digital currencies, have been all the buzz for the past few years and this is because of all the talk about their potential to be adopted in the real world for the masses to use. Even though there are raging debates about whether or not the technology is ready to go mainstream, the fact is that cryptocurrencies and the technology supporting them have evolved tremendously, and so has the target audience.

Cryptocurrencies are still quite new concepts for most people and understanding them fully may be a bit of a stretch but the blockchain seems to be resonating quite well across several sectors. That said, it is quite easy to see how the growth of blockchain technology is set to impact the growth of digital currencies, new and old alike.

Blockchain in Banking and Finance

Even though it was not clear what blockchain was capable of as a payment system, the intent behind the technology was very clear – the goal was to get rid of the middle-man which, in this case, are traditional financial institutions. Now that there is a little more understanding, experts have admitted that the blockchain will play a key role in financial markets.

Unsurprisingly, financial institutions which seemed to be set to go out of business due to the rise of blockchain, have been among the most enthusiastic adopters of such the technology. A number of large corporations including VISA, SWIFT, IBM, and J.P. Morgan among others have had their sights set on the blockchain for a very long time and each of them has invested quite a lot in its development in one way or the other.

But why is adopting blockchain such a huge deal of these institutions? Well, in their current state, traditional payment solutions are plagued by several limitations such as high transaction costs and low speeds. Blockchain is viewed as the ultimate solution for all of these problems.

Taking Cross-Border Transactions to the Next Level

A recent McKinsey report revealed that cross-border payments make up about 40 percent of all global payments. Even so, the current system is still at risk of such things as exchange rate fluctuations and is plagued by some limitations – high costs and delays among others. Besides all that, a large population of the world also remains unbanked and this is also a factor that makes traditional payments quite inefficient.

Putting all that into consideration, it is quite obvious that the solutions that blockchain technologies have proposed make a whole lot of sense for this particular use case. In many ways, this is proof that technology may be already shaping up to be the future of banking and financial transactions. In fact, it seems like a number of high-profile companies have realized this. Case in point, Facebook recently unveiled Libra, and Telegram also finally went live with its blockchain network. These projects have been backed by some of the world’s leading banking institutions primarily because of their potential to change everything up.

Gambling and Sports Betting

In many places, commercial gambling is still subject to some rather restrictive policies that make it particularly difficult for the gaming business to operate and prevents the gamblers from fully enjoying the activities. For instance, in the United States, many gambling sites have limited access to payment services through which players can deposit or withdraw money. This is awfully frustrating and they have been looking for ways to go around these limitations, until they came across blockchain solutions, that is.

Blockchain not only acted as a workaround for the restrictive policies regarding the use of payment services such as credit cards and e-wallets for gambling but it also led to the rise of a whole new sector. Bitcoin sports betting sites and online casinos are now very common and all of them enjoy massive following in the United States.

Blockchain-based sportsbooks and casinos are known to improve bettor protection through the creation of trustless ecosystems. The inherent security of blockchain further alleviates many of the issues associated with data integrity, an aspect that is extremely vital in the gambling industry.

What the Future Holds for Blockchain Technology

The aforementioned areas of application aside, blockchain has several other use cases. Some of the ones that have been picking up of late include smart assets, trade finance, and even fraud control. All of these imply that there is a very bright future ahead for the technology. However, it is important to note that there are also a few issues that will need to be addressed before the technology finally becomes a success in the mainstream world.

Fortunately, since a number of institutions have realized the potential of blockchain, a number of them have invested heavily in research and development. New use cases are found for the technology on a regular basis and a good number of them are viable solutions for real-world problems. With a little more refinement to ensure transparency, ease of access and reliability, we are definitely headed to a whole new world of revolutionary financial and payment processing.