Blockchain, Fintech, and Cryptocurrency: Everything You Need to Know About the Trifecta of Future Finance

With each fundamental building block of a better monetary policy firmly in hand, three of the greatest technologies to come out of the 21st century could propel finance into the next millennium.

You’d be hard pressed to find someone who has never heard of bitcoin in today’s society. With the famous cryptocurrency routinely making headlines and disrupting financial power structures for the last 5 years, it’s a fairly commonly discussed topic. But, despite the popularity of the topic– few people feel like they have a true handle on what cryptocurrencies, blockchain, and Fintech really are. Specifically, as Bitcoin, by far the most popular of all cryptos, has been relegated to trading platforms and exchanges, treated like an exciting and highly speculative asset.

Which is great for investors, but where does that leave the average banking consumer? And why should they care? Focus your efforts on cryptocurrency trading platforms like Bitvavo.com, that are designed to help demystify the base functionality of cryptocurrencies themselves, and you might be surprised what you find. A truly paradigm shifting technology, that could transform the world of finance as we know it, all at the tips of your fingers. All with the help of three little things.

Blockchain

Blockchain, in a nutshell, is the ledger system that cryptocurrencies like bitcoin use to both validate, and record, transactions. This distributed ledger technology (DLT) may sound simple, but this particular application is merely scratching the surface of what blockchain has to offer– both in the realm of cryptocurrency and other financial applications.

What makes blockchain so incredibly novel, and wildly useful, is that it decentralizes intrinsic functional systems. Where, in traditional banking systems, you’d need an entire ecosystem of personnel to carry out validation checks and balances, with crypto, you simply need blockchain. This removes the individual element from finance, meaning that it also removes any manipulation or bias. Using only mathematics, blockchain enables a network of users to verify transactions, preventing double spending, providing a publicly auditable records system that can never be changed or tampered with.

It also ensures that no one individual or conglomerate is set to see gain from adoption of a given cryptocurrency network, so instead of paying for CEOs, you only pay for computing power. Lowering fees and removing stopgaps from cross border transactions. Blockchain is what streamlines and disseminates global accessibility to crypto, protecting anyone who invests.

Fintech

Fintech, or financial technology, is something that has been integrated into centralized banking systems for decades. Despite the ubiquitous adoption of software programs that allow banking services to work digitally, it still has yet to make any positive effect of the more nefarious underpinnings of the centralized banking world. Bringing your bank account to your phone surely makes things more efficient, but centralized application of financial technology does little to protect those who are unbanked or underbanked– which applies to over a million people on this planet.

Moreover, centralized banks have long been under fire for their discriminatory and dangerous monetary practices. As a financial power structure, banks make money off of the money their customers deposit, offering little in return. Governments print money to give to banks when economies dip, and many within the financial ecosystem are allowed to gamble on other money with this money that was artificially created. Banks and governments then incentivize citizens to go into debt in order to hedge the bets they’ve made in creating money out of thin air. Which all sounds a bit neurotic– but that is the brass tacks of investment banking and quantitative easing practices. Systems of finance that are still sustained to this day.

However, despite the issues that centralized banking institutions have long created, there have never been many financial options outside of legacy finance. Leaving even those in stable economies to contend with inflationary praxis of governments and untoward trading principles of Wall Street and centralized banking institutions. Which have many crying out for a better system.

Cryptocurrency

Cryptocurrency may well be that system. Cryptocurrencies represent a fully decentralized, immutable, stable currency that is borderless. Which means that it is accessible to anyone with an internet connection. There are no pyramid schemes or gatekeepers. Just those people that use them, and those that don’t. Creating a far more democratized system of currency that can’t fall prey to unfortunate spending and lending practices.

The problem with most cryptocurrencies, is that they lack the similarities to legacy financial structures that make most consumers feel safe. While many may have problems with bureaucracy, it’s still something that they recognize and feel comfortable engaging with. Without the staunch regulations that centralized institutions are subject to, many consumers from relatively stable national economies feel that cryptocurrencies are too risky, or too nuanced.

Where the Three Meet

However, merging these three concepts: blockchain, fintech, and cryptocurrency– may well provide the average citizen with a format that is both familiar enough to be comfortable and free from demoralizing practices. Using the technology of blockchain to supply a transparent, secure, and public ledger system, Fintech to provide familiar support and infrastructure for personal banking, and cryptocurrencies to add a completely decentralized and borderless payment paradigm could well provide the future of currency that works for the people themselves. Instead of continuing to fund an unsustainable loop of debt and risk. Accessible to all, maintained by all, used by all.

This article does not necessarily reflect the opinions of the editors or management of EconoTimes