What Blockchain essentially does is it manages the ledgers for accounting of the crypto currencies, which is what banks have been doing for us for years. While banks are highly technology centric with all their processes and systems being highly technology centric, their overheads and time for money transfer are not very conducive for the people.
Things get even worse because of their centralized nature with them controlling the bulk of people’s money.
So what Blockchain does differently is that it decentralizes the whole system with its distributed ledger approach, making it completely trust-less on a single organization but vouches to be the most trustable system in the world.
- Trust-less and Distributed System: The most noteworthy feature that makes Blockchain most secure is its trust-less Distributed Ledger system. The permission to read and write on the blockchain are equally distributed among the users with no single user given any special prvilige. Think of a distributed ledger system as an open treadmill based luggage pickup approach used by almost all the airports in the world. While you will place doubts every time you have to pick your luggage but it is still the most efficient and trustable system deployed all over the world which works perefectly all the time.
- Much Faster: If I have to send $5,000 dollars to say my brother sitting in Australia, it would take me 3 days and about 5% – 7% in commission ($250 – $350) with the SWIFT transaction. I can practically visit Austalia myself physically via flight and hand over the money to him and come back in this time frame. On the other hand, I can remit this money in digital currency in a span of few hours to anywhere in the world at a much lower cost
- Security: Banks’ current technology platform are still prone to hacking. Blockchain technology is secure due to the distributed nature as all the information is synced across all the nodes on the blockchain. So one would have to hack 51% of the nodes to be able to practically make any manipulation and the cost of this would skyrocket. Further, the data stored on Blockchain is cryptographically secure and the public-private key cryptography ensures that the data is received only by those it is intended for.