The term – Blockchain money transfer – recently came into the limelight because of the bitcoin trend. As soon as cryptocurrency became the center of every business and financial discussion, technocrats identified the potential of blockchain technology. This led to an exponential increase in the venture capitalists’ investment in the technology itself. Consequently, the technology diversified and so did the aspirations of entrepreneurs who visioned the future of finance in this Distributed Ledger Technology (DLT).
To jump into mainstream acceptance, blockchain still has a long way to go. In the meantime, however, this radical change has already been intercepted by renowned visionaries for some simple yet relevant reasons.
What DLT offers for Finance?
1. Convenient Transaction
The concept of Blockchain money transfer is being developed to allow customers the fastest, easiest and cheapest (almost free) alternative for global payments. This significantly saves time and capital of the customers, both individuals as well as businesses.
Without the involvement of any middle-men, the process is extremely streamlined and simple to use. Therefore, a customer gets a high-grade and secure experience.
2. Unparalleled Security
Since every single information is unalterable, customers can rely on data accuracy. Distributed database ensures that audit trails can figure out the exact point of a breach or data manipulation.
Be it sending remittances, exchanging money, or even to buy or sell cryptocurrency, blockchain is a one-stop solution for every financial transaction.
But there’s more to it! The challenges involved in this transition, just like any other drastic reform, also need proper addressing. So, let us look at the other side of the spectrum.
Major Challenges for Blockchain Technology
1. Limited Scalability
The reigning competitors – Visa Direct Transfer and PayPal – are maintaining their reputed positions after years of head-start in the league. They played a major role in introducing the world to global digital payment. So, where does this put the underdog – Blockchain?
Although Visa claims that VisaNet is capable to process 56,000 TPS, on a regular basis, it completes around 1700 TPS. And PayPal although claimed 450 TPS, but their 6.1 billion transactions when calculated gave a figure of 193 TPS.
On the other hand, Blockchain Technology is still evolving while promising more than 38000 TPS to overcome the scalability problem once and for all.
However, scalability should not be considered a huge liability of the blockchain as generally, transaction limits do not generally exceed the limit. Moreover, the primary concern of a customer in any transaction is security and reliability.
2. Lack of Regulations
Without legislation, blockchain technology will continue to be demeaned. Cryptocurrency scams are on the rise. Scammers, in case of Blockchain Exchange scams, use ‘FOMO’ (Fear of Missing Out) psychology to lure in the potential customers.
In general, public and private financial institutions are making huge profits in the current system. No wonder they would try to undermine the possibilities of the technology that can rupture their earning source.
Hindering the growth of Blockchain money transfer, these steps put the technology under a huge question mark in the customer’s perception by impacting their confidence and trust in the system itself.
Last but Not the Least…
Adoption of a better and secure form of financial transaction is the basis of sustenance in this fast-paced world.
- In between the ongoing challenges and external interceptions, will the global population adopt blockchain as the new system?
- Maybe, someday.
- Would this change lead to people discarding the current system?
- Yes, but only if Blockchain Money transfer is accepted globally.
Eventually, even if this change is not rapid, it has to come. And on that day, we will discuss the time when another revolutionary innovation had to face the same challenges faced by all other drastic propositions that visioned of reforming the traditional ways.
So, we are not there yet but we are on the right track!