Here’s why financial institutions and the finance sector are gradually beginning to warm up to blockchain, and what that means for this technology going forward.
Blockchain is now the cool kid on the block
Blockchain was once a business anathema which those in the financial sector shunned to the greatest extent possible, largely because they didn’t trust its promising potential. Things have changed quite a bit over the past few years, however, and blockchain is now the cool kid on the block, vacuuming up droves of media attention while businesses and savvy individuals pour millions into its development. Such a change has there been to blockchain’s reputation that major banks and financial institutions are beginning to adopt it into their operations and future plans.
A survey of bankers discovered that today’s banking industry is vastly more accepting of blockchain than it was just a few years ago. Nearly 50 percent of all respondents expected to see mainstream adoption of blockchain technology by 2020, for instance, a figure that’s doubtlessly grown even higher since the poll was originally taken. This means that those in the financial sector who haven’t yet been paying attention to blockchain are in for an unwelcome surprise.
Banks are now experimenting with blockchain in greater numbers than ever before, for instance. Whereas cryptocurrencies like Bitcoin were once viewed as too volatile to be taken seriously, major banks are now beginning to re-examine their relationship to cryptocurrencies and the blockchain technology that empowers them. The cryptocurrencies themselves don’t have to be interesting nor even profitable; the underlying algorithms that power them, however, have the potential to upend just about every major market in the world today.
The world is increasingly becoming algorithmically-driven, and the financial sector is soon about to learn that blockchain technology is essential in a market dominated by dizzying strings of numbers that would make any human head spin.
There are still some hurdles
Before 2019 can be realized as the year when finance truly discovered blockchain, however, some hurdles still need to be surmounted. Blockchain’s infamous relationship to some volatile cryptocurrencies like Bitcoin, for instance, has dulled its reputation amongst more traditional financial institutions that shun fancy upstarts. We have seen this in the education sector, where online language learning sites, like Preply, have transformed an industry. Similarly, the blockchain market is itself so young and innovative that it’s doubtlessly going to keep finding itself buffeted by change for the foreseeable future.
The financial sector relishes stability, making the potential volatility behind cryptocurrencies and the blockchain tech that fuels them perhaps unsavory. Nonetheless, advancements in cloud conformity and a business culture that’s beginning to see the profitable potential behind blockchain services will render them more and more alluring to financial professionals. Expect expenditure in blockchain research to continue spiking skywards, in other words, despite what some major bankers have to say about cryptocurrencies.
Blockchain may not yet have realized the fantastic promise of inventing a truly viable and accepted digital currency, but the finance sector is realizing that such an idea was a pipe-dream the entire time. These days, financial gurus are beginning to understand that the algorithmic power of blockchain is where it’s true potential lies, and 2019 could very well become the year they truly tap into that potential for the first time.