Blockchain technology revolutionized the financial industry with its digital ledger transaction system. It’s connected to a network of computers and creates a chain for every transaction performed. It encrypts these transactions with a cryptographic signature known as a hash.
Many tech communities use Google Docs as an example of how it works. Documents shared with a group of people can be accessed anytime, which makes its operations flexible, fast, and cost-effective. This flexibility is why many online gambling platforms have utilized Blockchain technology in their payment systems. The system functions through three concepts: blocks, nodes, and miners. These systems help it create several blocks containing the transaction data while miners create new blocks through mathematical processes. Nodes, on the other end, allow the interconnectedness of each block.
All of these make it easy for players to facilitate payments when they play blackjack online and other internet transactions conducted through any cryptocurrency. It also makes it easier to fulfill all virtual payment requirements and optimize crypto accounts for financial success. This article looks at several ways Blockchain technology is transforming digital transaction systems.
5 Ways Blockchain Is Transforming Payment Transactions
Many people want to buy and sell online. The rise of those inclined to shop and pay online has increased, and so have the measures to protect them. That’s how Blockchain technology does it:
- It Facilitates Ease in Cross-Border Payment
Transferring payment through bank systems is complex as your money has to pass through several processes. For example, if you live in the US and want to buy a product from China, you’d have to pay through US banks that partner with Chinese banks to fund the company.
It means that you need a third-party system. You’d pay to your vendor’s bank account, but in reality, the money has passed through your bank, down to a partner bank in the recipient’s country, then down to the recipient’s bank account.
The way it works, Bank A (your bank) receives the money. If it’s not licensed for international transactions (or doesn’t have the Chinese Yuan reserved), it’ll send it to another bank, which will then send your money to the Chinese bank. That’s Bank C. Bank C (if it’s not your recipient’s bank) will then process it to your recipient’s bank, Bank D.
The complexity is why payment takes days sometimes. Blockchain eliminates this as every transaction is processed directly without the government or banking authority. You can’t reverse it; there are no delays, and these charges are to the barest minimum. The cost-effectiveness of the process also means that your money can take as little as 15 minutes to reach the recipient, and you can access it 24/7.
Every buyer and seller is conscious of cybercrime. It’s the terror that plagues online payment systems today, and it’s even said to cost people and businesses over $500 billion annually. That’s the GDP of Algeria and the Philippines combined (as of 2020). Banks’ security measures cannot keep up with phishing emails, bugs, and other cyber attacks, which is where Blockchain steps in.
The system protects all transactions through cryptography and distributes the data to several ledgers. Any hacker would need to alter these transactions (secured by blocks), which is almost impossible. Aside from this, it’s rare to find leakages in your private data because you’re assigned encrypted keys as account numbers.
These keys frequently change, too, making it almost impossible to identify or exploit in any way. And since the transaction is immediate (with no more than one hour during highly congested traffic), it’s difficult for hackers to reroute your money.
- Transparent Payment Systems
It’s already stated that the system keeps records of all transactions. These records are maintained by a network of computers, a central institution, which is unalterable by individuals or governments. There are identical ledgers everywhere. They create the notion of trust, decentralization, transparency, and immutability to hacks.
There’s a consensus across the network of nodes, making it easy to confirm every transaction Blockchain processes. It also means you cannot change the data already processed, and every business can maintain customer information without difficulty.
Since you cannot modify the records, every transaction remains as it was. It means that the Blockchain ecosystem protects both parties and guarantees trust. It also means that anyone, regardless of financial power or connection, can do business anywhere in the world without discrimination.
- It Allows Investment and Trading in Cryptocurrencies
The average tech-savvy person understands that they can invest and trade in digital currencies. These are the likes of Bitcoin, Ethereum, Ripple, Dogecoin, XRP, Litecoin, Tether, Solana, TRON, and many others.
It means that you can invest in the value of these currencies, and your investments increase as the currency’s values rise. It also means that you can choose to trade these currencies for another cryptocurrency while you pocket the extra on the transaction.
Blockchain facilitates a money-making system through its highly secure financial service network. It’s like investing in Dollars or pounds or trading in Dollars, Japanese Yen, or European Euros. You then capitalize on the differences in the exchange rate to make money.
- Privacy and Protection
Every bank account information is held on the private server of the bank. Your privacy ends when the bank servers are penetrated. It ends, in reality, when any bank officer accesses your file, even if it doesn’t compromise your information.
It’s different with Blockchain or any of the cryptocurrencies it empowers. While all transactions are traceable, it’s difficult to know who owns them, which means your details are private to you except if you leak them.
Opening a bank account means you’re vulnerable to the government’s Know Your Customers (KYC) laws. These laws imply that they can track your account and seize your assets for reasons known to them. However, it’s impossible to do this through Blockchain as it will consume valuable time and resources to track an account.
Everyone wants to buy and sell online, but the challenge is cybersecurity. However, Blockchain technology is revolutionizing the financial industry by transforming payment transactions. It offers more security, transparency, privacy & protection and facilitates cross-border payment.