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The impact of Blockchain technology on the banking industry

Banks operate as intermediaries in the global economy by managing and coordinating the financial system using internal records. This system imposes to trust banks and their mostly obsolete infrastructures. The blockchain is free of intermediaries and replaces them with a
system without borders, which does not involve a relationship of trust, totally transparent, and easily accessible. It allows cheaper and faster transactions, facilitates access to capital, offers a better security of data, honors agreements that does not require a relationship of trust, fluidize the contractualization.

New financial structures will soon be able to interact in different ways thanks to this new technology.
Main benefits of the blockchain for the banking and financial sectors are:
 Security (because of the implementation of the network).
 Transparency (standardization of the exchange process).
 Trust (transparent registration).
 Automated process(smartcontract).
 Confidentiality of data.
 High performance, high acceptance of transactions.

The banking and financial industry is one of the sectors that will most benefit of blockchain innovations.
There are many application cases we can imagine, from real-time transactions to conversion of assets and loans into tokens but also from more fluent international exchanges to stronger digital agreements.
Token: virtual items attached to an economic value which can be exchanged for money.

A new banking and financial architecture, based on transparency, elimination of frontiers and need of trust appears to be a very effective way to prepare a more open and interconnected economy.

El impacto de la tecnología Blockchain en la industria bancaria

Los bancos actúan como intermediarios en la economía mundial gestionando y coordinando el sistema financiero a través de registros internos. Este sistema nos obliga a confiar en los bancos y sus infraestructuras en gran parte obsoletas. La Blockchain se libera de los intermediarios y los sustituye por un sistema sin fronteras, que no implica una relación de confianza, que es totalmente transparente, y que es accesible. Puede permitir transacciones más baratas y rápidas. Facilita el acceso a la capital, ofrece mejor seguridad de datos, cumple con acuerdos que no requieren una relación de confianza, y fluidifica la contractualización.

Las nuevas estructuras financieras podrán interactuar por medios diferentes gracias a esta nueva tecnología. Los principales beneficios de Blockchain para los sectores bancario y financiero son:

  • Seguridad (por la implementación de la red).
  • Transparencia (normalización del proceso de intercambio).
  • Confianza (registro transparente).
  • Automatización de procesos (smartcontract).
  • Confidencialidad del intercambio de datos entre varios socios comerciales.
  • Alto rendimiento, aceptación de un gran número de transacciones.

La industria bancaria y financiera es uno de los sectores que más se beneficiará de las innovaciones de la Blockchain. Hay muchos casos de uso posible, desde las transacciones en tiempo real hasta la conversión de activos y préstamos en token, pasando por intercambios internacionales más fluidos y acuerdos digitales más fuertes.

Token: piezas virtuales a las que se les asigna un valor económico y se pueden intercambiar por dinero.

Una nueva arquitectura bancaria y financiera, basada en la transparencia, la eliminación de las fronteras y sin necesitar confianza parece muy eficaz para preparar el camino de una economía más abierta e interconectada.

What is a Smart Contract ?

Cryptocurrency and crypto mining opened was the key behind exploring the uncharted limitless opportunities of blockchain technology. Techprenuers started identifying the gaps the World is facing today and realized blockchain technology could be the solution to these gaps. The word Smart contract has begun to resonate quite frequently and has started to garner interest among the investors. However, the invention of Smart contract can be traced back before the boom of the internet in 1997 by Nick Szabo, but Smart contract was put in the limelight by Vitalik Buterin in 2013. Vitalik Buterin founded the revolutionary global, decentralized computer platform Ethereum and its programming language solidity propelling the concept of Smart contracts among experts in blockchain and techpreneurs.

But still, Smart contracts are not a common word among the general mass, even though it is considered as a sleeping giant of opportunities for the future. Understanding the concept of Smart contract is simple, Smart contract are like contracts in the Real World but excluding hassles of long pages, intermediaries such as lawyers, government agents or any other agents. The smart contract is a deterministic digital agreement which is very reliable, transparent and tamperproof. The Smart contracts are stored inside the blockchain and inherit the property of immutability, i.e. once a contract is created, it can not be changed or tampered and distributed among the individuals in the network, thus increasing the validity of the contract. Ethereum is the most used platform for developing Smart contracts through its decentralized application Dapps. 

The fundamental underlying foundation of Smart Contract is the pieces of codes that codify the business logic. The core functionality of the Smart contracts is to store rules, verify rules and self execute rules.

Businesses do not have to waste their valuable resources on intermediaries to validate and enforce the contracts. Embracing Smart contracts reduces injustice, corruption and makes it fair for all the parties involved in the contract. Smart contracts are replacing the digital agreements in the Software sector, Banking, Insurance and Postal companies. Smart contracts are becoming an inevitable reality towards an automated decentralized legal system.

What is a Smart Contract?

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