Blockchain technology, while appealing to a lot of financial players, is not all that easy to integrate. In fact, various banks are struggling with putting the technology into practice. This new level of transparency is a critical issue for most financiers, as they are not used to having all information out in the open.
Adopting Blockchain Is More Difficult Than Expected
Despite the growing interest in blockchain technology, it will be quite some time until banks integrate these new solutions. While irreversible transactions are a big concern as it is, having unprecedented levels of transparency makes many people uneasy. Oddly enough, there are also two if the main appealing aspects of blockchain to begin with.
Most people are well aware of how the blockchain can make finance a lot more efficient. Settlement of transactions can be reduced to hours or minutes, instead of days. Moreover, there are fewer fees associated with all financial processes, which is never a bad thing. But there shared systems provide too much insight into the everyday workings of banks and financial service providers.
At the same time, the immutability of a blockchain may not be preferable in the financial sector. Trades and deals are subject to human error, and not being able to adjust the error can be very costly in the long run. Then again, the technology would make people pay a lot more attention, which would benefit the financial sector more than it would harm.
Scalability remains another primary concern, as replicating data can become cumbersome on the network. Most financial players are exploring private blockchain technologies which do not rely on proof-of-work, such as Bitcoin does. However, sorting the bloat from the main information will be a lot more difficult in a private ledger.
All of this will lead to future discussions on how and when the blockchain will be implemented in the financial world. Further delays will not do anyone any favors, but a rushed job is not advised either. Distributed databases are not entirely new, though. But the blockchain provides different tools and traits very few people are accustomed to.
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