The Impact of Blockchain on Personal Finance
By Since the inception of blockchain technology, the financial markets have changed significantly. Many of the changes are positive and impact people from all walks of life.
You can define blockchain using multiple definitions, but the easiest way is to define it as a system of information that is impossible to crack. Financial applications have been built on this decentralized system that can help individuals better manage their money.
Top 2 Features of Blockchain
All the benefits of blockchain are derived from two features: distribution and immutability.
1. Distribution
Copies of the ledger are distributed throughout the ledger. Every new transaction added to the network has a copy within the network users. This means that nobody controls the blockchain. Every network user has the same information.
2. Immutability
It is impossible to alter the transaction details in a blockchain. For every single transaction, everyone in the network gets a copy, making it impossible to erase transactions or add unverified information. For you to hack the system, you will have to coordinate attacks on thousands of computers at the same time, which is virtually impossible.
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Using blockchain to trade
Let’s face it, blockchain technology has been popularized by bitcoin. The increased popularity of trading Bitcoin is what made blockchain so popular. Bitcoin, just like any other digital currency, relies on blockchain technology, which is decentralized and secure.
Trading Bitcoin has attracted increasing numbers of participants, as the value of this digital coin has grown immensely in recent years. Since not everyone has the technology prowess to mine Bitcoins, trading on a reliable platform provides an alternative way to get exposure to this asset and join thousands of other investors in cryptocurrency field.
How Blockchain Is Useful
The usefulness of blockchain isn’t just limited to bitcoin; it can be used to enhance personal finance. Here are some amazing ways this technology can be used:
Money transfers
Money transfer is always an issue to many people, more especially when sending or receiving money from other countries. Even when it is possible, normal centralized systems such as banks are extremely expensive.
Blockchain changes this narrative by making it easier and cheaper to transfer money globally. You can use your mobile device to send or receive money instantly using blockchain technology.
Reduces fraud
If you transact money regularly, fraud is one of your biggest threats when using centralized systems. However, the decentralized system, blockchain, offers a remedy to fraud since it stores information in a secure ledger, which is shared across the network. Hackers cannot break into the system because they will have to attack all the network users at the same time.
Financial inclusion
The low cost of blockchain allows startups to compete with large financial companies. People who are looking for financial solutions with no restrictions such as minimum balance and banking fees find the blockchain to be a safe haven.
Looking to the future
The power of blockchain and its revolutionary uses cannot be ignored. Blockchain will change the look of the financial market, making personal finances more manageable.