Just as we witnessed the manner of media change over the last few decades with the rise of a universal network called the internet, we will begin to see monetary transactions become completely digitized, globalized, and unregulated. Blockchain technology will decentralize the financial industry by removing the middleman of the banking infrastructure we still use today.
Stellar Lumens is paving the way
Jed McCaleb, CTO of Stellar Lumens, recently discussed how blockchain technology must remain a decentralized entity in order to thrive and create much needed change in the economy. McCaleb, along with Stellar’s non-profit sector, Stellar.org, plan to push this agenda forward by expanding universal, digital financial options to all parts of the world. The system would provide an open exchange to trade fiat currencies for cryptocurrencies easily and cheaply online. This would eliminate international exchange borders in a way not seen before.
Replace bankers with users
If grown organically like the internet, then blockchain will no longer need a centralized establishment to be regulated as it is maintained by a vast network of individuals rather than institutions like banks, Wall Street, and the IMF (International Monetary Fund). This will also make alternative coins more popular and mainstream as access because easier, reaching all parts of the globe and all types of people. Plus, secure, fast transactions no longer need to be monitored by big banking systems since blockchain technology offers layers of authentication before currency is validated.
Creating a more stable economy
Banks know that the old way of financing is deteriorating especially as peer-to-peer transactions and shared economies are becoming more common. Blockchain is the last piece of the puzzle to create a system where the market does not change according to investors, and the economy is not affected by oligarchical decision making. Instead, the economy will be based on need over profit. Trends will adjust the market just as the internet controls the media: through social discretion. This will allow the economy to change when needed, avoiding disasters like recessions and bailouts to restore a failing form of capitalism.
What is holding blockchain back?
Blockchain, right now, is like a tangled ball of twine that we need desperately to straighten out. There are several issues, mainly due to its newness.
On the one hand, there are too many scams in the mix: blockchain companies that want to make a quick profit without providing any innovation for being a useful tool of future. This makes investment more difficult and trustworthiness almost impossible on a massive scale. However, this trend is also similar to the internet where chain emails, viruses, and low quality commercial usage plagued its beginning stage. Eventually, the internet became more secure and reliable as a source for quality information, although it still has its kinks to workout.
On the other hand, banks are investing in blockchain technology and trying to fit it into their current financial model. By doing so, banks have the potential to create a shared ledger to offer safe, quick transactions between businesses and clients. Ironically, the shared ledger is exactly what peer-to-peer transactions need to make banks unnecessary. To counteract this painful truth, banks are trying to market themselves as blockchain startups and tech companies. However, changing the brand of a bank does not change how it functions. Their bureaucracies limit transparency and public trust; the essence of cryptocurrency. So, as banks try to hijack blockchain because they see its popularity on the rise, they are actually slowing down its growth and prolonging their own demise.
The future will involve blockchain one way or the other, it is just a matter of time before banks realize that it is not their friend. If banks want to be a part of the future than they must accept that for-profit banking is a thing of the past.