The term ‘Blockchain technology’ attracted much interest after the success of Bitcoin. In simple terms, Bitcoin is a digital currency that uses the blockchain distributed ledger to transfer value, this is like a regular bank.
But unlike banks, it does not have an intermediary because it is decentralized.
Blockchain allows the transfer of peer to peer, which means you can send money directly to any part of the world instantly.
Blockchain has existed since the late nineties. Satoshi Nakamoto was the first to use blockchain technology with Bitcoin in 2009.
How Blockchain allow you to save a lot of money in bank fees
The current problem with bank and wire transfers. Depending on where you live, a typical $ 100 bank transfer can cost up to $ 30 and take between 5 and 10 business days.
Although Western Union and Moneygram have accelerated the transfer of currencies, in some countries they are extremely expensive.
It is also impossible to send cash instantly to an employee or loved one who uses another bank in another country.
PayPal and Skrill introduced the idea of peer-to-peer, however, they are not compatible with all countries. And unfortunately for users, PayPal has increased its transaction fees in April 2018.
Why are Banks Interested in Blockchain Technology?
Trimming intermediaries will not only save time but will help customers and the bank saves a lot of money in transaction fees.
Use of the Blockchain Technology for Identity and Business Compliance
Banks must comply with strict regulations and guidelines against money laundering. This is also known as KYC (Know your customer).
Therefore, the ability of companies to demonstrate their identity more efficiently and accurately is extremely attractive to banks. This will allow companies to more securely and easily access customer accounts for payment gateways.
Second, blockchain will also give customers control over their private data and information. This, in turn, will facilitate identity verification because all the information will be from one source.
Here is the Infographic from Satoshi library that explains why Banks are more Investing in Blockchain Technology.