How does the blockchain shape the future financial industry

The way the blockchain affects the financial industry: Is it a quantitative change in technology upgrades or a qualitative change in market efficiency?

Blockchain technology is gaining popularity around the world, and governments and large financial institutions around the world want to take the lead in this round of technology. Traditional financial institutions, represented by the banking industry in various countries, have conducted in-depth research on blockchain technology overtime.

In what way will blockchain technology affect the traditional financial industry? Is it a quantitative change in technology upgrades or a qualitative change in market changes? Is it a lightning-like "blitzkrieg" or a slow shift step by step? It is the use of cutting-edge technology. Is it a simple commonality to implement more complex transactions or logically simplify the complexities of marketization?

The advent of Bitcoin is undoubtedly the revolution of money. As the currency itself, the legal risk of Bitcoin is of concern to investors and entrepreneurs. The People's Bank of China also made it clear that Bitcoin is a so-called currency calculated by a specific computer program. It is not issued by the monetary authorities. It does not have monetary attributes such as legal and mandatory. It is not a real currency, which makes Bitcoin. The development has been greatly hindered.

However, the blockchain that came out at the same time as Bitcoin has become a hot word in the field of financial technology, attracting the attention of experts, scholars, financial institutions and investors. Many financial institutions have invested in researching this new technology. Sensitive startup entrepreneurs are struggling to seize this opportunity by developing blockchain system control software to build a platform that is safer, faster, more economical, and more transparent than traditional financial intermediaries. Traditional financial service providers and bankers are also in full swing to take advantage of this technology in their main business applications. A game of competition with time, technology entrepreneurs and bankers is going on.

** Why does the blockchain have such a large "magic" that fascinates the industry?**

Blockchain technology, also known as distributed ledger technology, is a data storage technology that collectively maintains a database through decentralization. In a nutshell, this is a technical way that everyone can participate in bookkeeping. The system sends the individual's books to other people in the system, so that everyone in the system has a complete copy of the data, which makes the data change almost impossible. It is also because of its security that the blockchain provides a reliable solution for the security of the Internet financial system.

In addition to security, the blockchain has many advantages such as high settlement efficiency and low transaction cost. At present, financial institutions use centralized accounting methods. Currency transfer may also involve third-party payment platforms, with many links, long processes, and high transaction costs. The blockchain uses a distributed accounting method, which reduces the transaction process and reduces the transaction cost. At the same time, it also greatly improves the settlement efficiency due to the real-time liquidation of its transactions. In addition, the blockchain can meet audit requirements, and once the data is passed to the blockchain, it cannot be deleted, making the data on the blockchain traceable.

Then, can the blockchain change the financial mechanism from the currency circulation mechanism? The change brought by the blockchain is like “leading to boiling”, using technology upgrades to improve the efficiency of traditional financial enterprises, or is it like “bottoming”, fundamentally Change the status of financial institutions? You can answer this question by comparing the currency distribution channels under the two modes.