For nearly a century, the uncertainty of the financial markets was a huge deterrent for some traders. Many saw the ups and downs, broken deals, failed companies, and overall lack of trust between buyers and sellers as a key reason to stay out of trading. Now, blockchain technology, introduced first by cryptocurrencies, has changed all that. One of the biggest advantages of using the concept of blockchain tech in financial transactions is that it offers a higher level of certainty because it is more efficient, secure, transparent, easy to audit and simple to trace.
There are even secondary markets that have come into existence due to the high efficiency and trust of blockchain technology. For example, dozens of online brokers now offer platforms for trading cryptocurrencies against fiat currencies. In other words, the traditional way of doing forex speculation has been revamped to include a number of different cryptocurrencies. Traders can now take part in pairs that include one traditional currency and a cryptocurrency. Here’s a general overview of how this new paradigm is transforming the entire way people view the concept of financial interaction.
Efficiency
Compared with every kind of traditional monetary transaction, blockchain methods allow for faster, much more efficient trading. Because this new form of doing business is built upon consensus and interactions that are 100 percent verified each step of the way, there’s no room for error. It also means that third parties need not be consulted to do auditing of each and every trade. A streamlined financial market is good for everyone, traders on both sides of deals, banks, brokerage firms, and government regulatory agencies.
Security
Block tech means that every transaction is fully secure. Not only is each step verified before the next one can take place, but no one can break the chain by editing, altering, or fraudulently entering bogus data. Nor is it possible to delete any data from the transaction record. The block is impossible to trick in ways that traditional banks and other financial institutions could be scammed. Admittedly, there are other, unrelated problems this new form of verification faces, but fraud and data manipulation are not among them.
Transparency
One of the most beloved components of block systems is that they are completely transparent. At any time after a trade is entered into the system, the entire process can be viewed by those who have a need to see the progression of events. Nothing can be hidden, removed, or added to the record. Everything that happened is right there in the block.
Auditing Ease
For purposes of government and industry regulation, the auditing train in blockchain systems is comprehensive and easy to view. As noted above, because each step is clearly recorded in real time, there’s no way to hide anything. When there’s a need for an audit, by a government agency or an in-house accounting team, all the relevant data is at hand. Auditors are accustomed to searching for bits and pieces of lost data in traditional systems. That’s not so in this new version of technology.