Blockchain technology could enable such transfers more quickly and cheaply, in ways that are more easily auditable by all parties involved. This is the reason cross-border remittances are slow and costly. Verification costs are even higher when multiple parties need to verify/audit the transfer of assets through a chain of correspondent bank ledgers across borders. In more tangible terms, today when you use digital money on a debit or credit card to buy something, banks and payment networks extract fees for verifying you are good for the money you are giving to the merchant in exchange for a particular product or service. Its presence and properties could theoretically lower the costs of verification and network construction in the economy. It also allows for the creation of automatically-executing ‘smart’ contracts and programmable money-which we explain later. This new database structure facilitates the transfer of value between parties over the internet without a central authority. Without getting into how blockchains work, the key concept is that they are a new type of database architecture with the potential to disintermediate many existing business models, particularly, but not exclusively, in financial services. Whilst blockchain was initially a consumer-led innovation, dismissed by professional investors and regulators, a recently renamed social media company’s 2019 digital currency project was a turning point the potential of a well-funded company with over a billion users to create a more or less instantly scaled, systemically important private currency was a wake-up call. It is also surrounded by a huge amount of noise from fringe libertarian followers, and the system is rife with hype from fraudsters. For many, blockchain is a difficult field to get comfortable with because it sits somewhere between economics, cryptography/database construction, theoretical statistics, and sometimes even philosophy- academic disciplines of which few people have a combined understanding. regulator, the Securities and Exchange Commission (SEC).īitcoin is underpinned by blockchain. 3 An ETF which directly owns Bitcoin (rather than Bitcoin futures) still awaits approval from the U.S. Last month the first a bitcoin-linked exchange traded fund (ETF) was finally launched, becoming the fastest ever ETF to reach US$1 billion of assets.
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |