Cryptocurrencies are the new rave that has captured the imagination of the world, and are considered the biggest manmade innovation of the 21st century. This wondrous new way of living life and conducting business is doing for the access to services, what the internet did for the liberalization of the access to information. But cryptocurrencies are just a small part of what the blockchain technology (which fuels the whole industry) can actually do. From energy consumption management, to self-driving vehicles, to insurance there are limitless things this new technology can do for everyday life.
One of the most crucial of such industries that look set to have its own remake with the blockchain technology is the credits and loans industry. With its revolutionary ways of conducting business, the blockchain technology will have a number of key impacts on this industry, some of which include:
Decentralization of Access to Loans
The blockchain technology is an irrepressible distributed ledger system that works to enable transactions between peers without ever needing to resort to banks or middlemen in whatever sector it enters. Banks in themselves cannot come up with credit, as they rely on the savings of their customers in order to come up with the sums they need to give out as loans. With the blockchain technology, people with extra money to salt away have the facility to safely keep their assets by themselves, and now with its entry into the credits market, these people can now act directly as creditors to other users around the world who might need it for their business or other life endeavors. The blockchain technology’s key impact in this field will be the elimination of bank fees, and poor returns for lenders, as they can get all the profit themselves instead by lending directly to the borrower.
Transaction Speeds
The blockchain technology offers users one of the fastest ways of transferring value from one part of the world to another. When Bitcoin was conceptualized, it was designed to be the fastest means of making payment (even faster than Western Union or Money Gram), and things have gotten even much faster than Bitcoin as the industry takes on new improvements to its infrastructure. With the blockchain technology, one could apply, and get granted a loan from their creditor in the space of minutes as long as both agree on terms. This is in stark contrast to the present credits industry where such loan applications could take anything from a few weeks to months.
Unfettered Borderless Access
Another key impact the blockchain technology will have on the loans and credits industry is the fact now for the first time, users (both lenders and borrowers) don’t have to adhere to debilitating state rules and regulations and can now transact with one another no matter their geographical location. Given that the blockchain technology is completely virtual with no single point of failure and can be easily accessed by anyone with a computer and internet, this means that anyone can transact with anyone as long as they feel the conditions are okay. For example, a lender with a lot of money in Finland can offer a loan to a user in the US who needs some extra cash to expand their business without having to report to the authorities or go through long processes.