Our global financial system has trillions of dollars, serving billions of users and supports the global economy more than $ 100 trillion dollars. Imagine how it would have worked if it were not in such poor condition.
Traditional financial system resembles an old quilt, made of industrial technology and paper-based processes, carelessly wrapped in a digital wrapper. It is centralized, it is vulnerable to system failures, data leakage and terrorist attacks. It is preferred that billions of people can not get access to the most basic financial instruments. Due to the isolated control it opaque and confusing with its monetary policy makers and financial institutions. It is exclusive: the powers that be are trying to maintain the status quo, trying to destroy the financial breakthrough technology is still in the bud.
And take blokcheyn, which is nothing short of a global accounting book, which is distributed to millions of computers and is open to everyone. It can be safely stored, not only information, but also everything else that is of value: money, stocks, bonds, property rights, credit history, treaties and almost all types of financial assets. But the main thing is that in this case, users do not rely on powerful intermediaries, which is what banks, governments and technology companies, and collaboration and intelligent code.
And entrepreneurs, and companies working in this direction, with the help of blokcheyna trying to remove outdated restrictions of the financial system through the development of new ways of implementation of the eight core functions of financial intermediaries:
Personal identification
To date, the issue of identity verification, we rely on rating agencies, organizations that are engaged in the analysis of financial data, as well as retail and wholesale banks. They were firmly fixed trust control, they also decide whether to allow the user to the system, based on the history of his transactions. At the same time, the responsibility for the reputation can be attributed to the very blokcheyn. Under certain transactions blokcheyn reduces and sometimes even eliminates the need for trust.
Protection against re-use
Systems of payment cards and money transfer deal with the prevention of cases re-use of funds transferred from one user to another. In blokcheyne it is also possible to control it by obtaining consent to transfer anything that has value (currency, stocks, bonds, property rights), in any amount and at any distance. This significantly reduces the obstacles of any kind and promote the democratization of economic growth and prosperity.
Storage savings
Now retail and investment banks, brokers and asset management firms are repositories of values. To store their savings average user prefers an individual safe deposit box or a savings / current account. Large institutions offer opportunities for investments without risk, such as money market bills or short-term treasury bills. With blokcheyna can recreate all of these financial instruments are based on P2P.
Issuance of loans
Retail, commercial and merchant banks, together with the firms, evaluates the creditworthiness of users, simplify the issue of debt on credit cards, mortgages, corporate and municipal bonds, government bonds and short-term securities, asset-backed. Blokcheyn allows you to independently verify the creditworthiness of the person immediately before the release, the purchase or redemption of debt securities. This significantly reduces the number of additional units and contributes to the transparency of the process. Thus, people who have no bank accounts, and entrepreneurs from all over the world will be able to quickly get a loan from ordinary users.
Exchange
Trading - is the exchange of financial instruments for the purpose of investment, speculation, hedging and arbitrazhirovaniya. This process includes posttreydingovy clearing and settlement. Blokcheyn reduces the computation time with a few days / weeks to minutes / seconds. This advantage provides opportunities for capital among people who do not have a bank account.
Venture capital and investments
If you invest in a property or business, you have the opportunity to earn additional income, whether it is capital gains, dividends, interest and rents. Typically, to attract investments needed at least investment bankers, venture capitalists and lawyers. Blokcheyn will automate the search for business partners, resulting in a more efficient, transparent and reliable funding model P2P networks, taking into account dividends and coupon payments.
Insurance and Risk Management
Risk managers are trying to protect individuals and companies from unexpected loss or disasters, not only through insurance, but also with a huge number of derivative financial instruments intended to avoid the consequences of unforeseen or uncontrollable events. Blokcheyn supports decentralized model of insurance, that makes use of derivative financial instruments is much more transparent. With the help of reputation systems based on the information on the financial capital, social networks and online user behavior, insurers will have a more complete picture of the insurance risks.
Accounting
Accounting involves the systematic recording and reporting of financial transactions. This multi-billion dollar business is controlled by four large accounting firms. However, traditional accounting methods do not keep up with the speed and complexity of today's financial processes. Global financial accounting book have contributed to a transparent audit in real time, which would facilitate the task of regulatory authorities for scrutiny of all financial activities within the company.
Two years ago, when we started our study, almost none of the banks are not interested in the new opportunities that promise blokcheyn. Now, almost every major player in the financial sector, ranging from banks to insurance companies, is investing considerable resources in this area.
Blokcheyn can significantly reduce the various costs for banks by increasing productivity and simplifying the company's entry into the world market. Blokcheyn also can help reduce the risks to the financial sector as a whole, and for interbank payments in particular. Indeed, in most cases, the period of calculation takes a few days, or even weeks, during which funds are frozen, which puts participants in the process huge counterparty risk. Blokcheyn will greatly simplify the most business processes, reducing risks and increasing transparency. This explains why more than 45 major banks, including Credit Suisse, RBC, and of UBS, joined the consortium R3CEV to apply blokcheyna in the banking sector, and why IBM has launched Hyperledger project, among which the participants have the Deutsche Bank, DTCC, London Stock Exchange , Wells Fargo and State Street.
However, banks have not only a positive side. Blokcheyn seriously reduces the barrier to entry for new users, thus creating an alternative to the traditional banking industry and challenging the existing players in almost any market. Therefore, for banks blokcheyn can carry not only possible, but also a threat.
Personally, we do not believe that blokcheyn represents a real threat for companies that are trying to implement new technologies. The question is, who are in the financial sector will direct this revolution in the right direction? History shows that those who are successful in a certain situation, it is very reluctant to do any changes. Why AT & T company has not released Skype, but Visa did not create Paypal? Why CNN does not relate to the emergence of Twitter, as capacious citations - the most important thing for them, is not it? Similarly, General Motors or Hertz can run Uber. Airbnb could be a project of the company Marriott. As in previous cases, a paradigm shift, in the case of blokcheynom will be winners and losers. With all the tempting possibilities should not ignore the potential risks. Nevertheless, we hope that the current leaders of financial services does not join the list of losers. In the end, too much is at stake.
The current situation can be characterized as follows: blokcheyn irresistibly sweeping down on financial fixed infrastructure. It would like to see as a result of the collision the old money machine turned into financial prosperity platform for all.