Blockchain Will Force A Kind Of Transparency The Current Banking System Lacks: Crypto Basics Part 1

Over the last five years, Bitcoin users and transactions have averaged a growth rate of nearly 60% per year. Cryptocurrency has erupted into a $200 billion industry.

Events like halving, volatility of the current market and weakness of the dollar have helped give Crypto the attention it deserves. However, it also overshadows some of the most important information we need to understand about crypto… and how it will affect our investment. The doubts on Crypto are largely hinged on the lack of its mainstream use. In other words, people are questioning whether or not it will ever be used as an everyday fiat alternative, or alternative asset class? The short answer to these questions is this: It is already being used as an everyday fiat alternative and as an alternative asset class. The right question to ask is how fast will its use be so commonplace that every store and every transaction will have cryptocurrency as an option. Journalist Dorothy Neufeld of Visual Capitalist published a piece on some of the most important graphs and numbers to show the evolution of crypto currency. Based on these and other numbers from other research institutions, I believe there are 10 important things that will happen in this decade on Crypto that will radically change our financial system. For this video, I will focus on Blockchain. Crypto experts know the importance of blockchain. For Crypto newbies, Blockchain is the technology that enables the existence of cryptocurrency (among other things). It is a decentralized ledger of all transactions across a peer-to-peer network. Using this technology, participants can confirm transactions without a need for a central clearing authority. Potential applications can include fund transfers, settling trades, voting, and many other issues. The security of a blockchain and its interoperability across all providers are two of the most important concerns on Cryptocurrency. If this ledger is supposed to record all transactions and it is decentralized, who is responsible for controlling, auditing, and securing it? The answer to this question lies in its market penetration. Banks like Goldman Sachs, Microsoft and Bank of America, HSBC, and Barclays… Payment systems like Paypal, Western Union, Nasdaq… According to the World Economic Forum, over 40 central banks including France, Germany, Hong Kong and Sweden… All these are now using Blockchain Technology. The groundwork for interoperability is laid out. It is just a matter of years for all banks, financial systems, and all institutions involved in transactions adapt the technology. It then becomes everyone’s interest to keep the system secure, robust, and reliable. This will result to four developments this decade: 1. Governance will be strengthened The IMF, World Bank, and governments of each country will make a governance model that enables large and diverse consortia to approach decision-making, permissioning schemes, and even payments more efficient. These models will help to standardize information from different sources and capture new and more robust data sets. 2. Interconnectivity will be a reality Reaching 100% interconnectivity may be years away… or ever evolving. But it is the same way our current financial system is operating. Systems are still evolving despite thousands of years of using the current monetary system. The same may be expected of blockchain interconnectivity… but it will reach a level where different systems will be able to work together. This will be primarily driven by governance. When there are common rules to follow, confidence and security are next. 3. Emergence of Contiguous Technologies New technologies will emerge to help create more credible security systems and data management systems. These technologies will serve as validation tools and auditing systems but more active and real time. 4. More Central banks will experiment with wholesale and retail Central Bank Digital Currencies (CBDCs) Countries in Asia, the Middle East and the Caribbean are beginning to experiment with CBDCs. This might be the slowest moving development but it will gain momentum as more countries join in. These developments in Blockchain will spark a wave of global disruption. More importantly, it is the track that will allow cryptocurrency faster penetration into our daily trade.