Blockchain, Fintech & The Banking Revolution

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By Jacob Maslow

Blockchain, the distributed, immutable ledger used to record transactions, track assets and build trust, is one of the most disruptive technologies. It was first proposed in 1991 by Stuart Haber and Scott Stornetta, but it was only in 2008 that the first decentralized blockchain was conceptualized, thanks to Satoshi Nakamoto. Since its emergence, the number of use cases within financial services has expanded beyond the initial cryptocurrency applications. As a result, blockchain fintech has become one of the fastest-growing industries globally and is expected to grow at a compound annual growth rate (CAGR) of 63% between 2021 and 2025. 

Source: Infosys

What is Blockchain?

Blockchain is an expanding list of records, or “blocks,” linked together through cryptography. Each block has a cryptographic hash of the previous block, transaction data, and a timestamp. The timestamps demonstrate that the transaction data was there when the block was published, allowing it to get into the hash. The blocks make up a chain containing information about prior blocks, reinforcing successive blocks. This makes blockchains hard to modify: you have to alter all previous blocks to change one block. The world’s oldest blockchain has been published in every edition of the New York Times since 1995.

What is fintech?

Fintech refers to the technology and innovation, such as cloud computing and big data, aiming to deliver significantly improved financial services in more efficient ways. The emergence of mobile banking, investing and borrowing services, and cryptocurrency are examples of how fintech can democratize access to financial services while improving the value offered to the public. Although, fintech companies are not necessarily startups. Some traditional financial institutions and technology companies are working to replace or enhance the financial services provided by existing financial services companies. For example, fintech has automated insurance, investments, banking services, trading, and risk management.

Blockchain and Global Payments and Cross-Border Transfers

The privacy and security of blockchain make it ideal for global payments and cross-border transfers. 

Each user is assigned a personal cryptocurrency key to conducting their transaction securely. Only the transaction’s counterparties can know or change the details of a transaction. 

According to Deloitte, using blockchain technology in business-to-business and peer-to-peer payments results in transaction cost reductions of 40% and 80%. Transactions are settled within seconds, and the flow of funds is encouraged. 

Blockchain in Trading and Trade Finance

Trillions of dollars worth of assets are traded every day, and traditionally, this involves mountains of paperwork and complex, long-tailed bureaucratic protocols and endless intermediaries. 

Blockchain technology frees counterparties from the need to verify each other’s ability to meet their end of a deal, optimizing a trade’s lifecycle. As a result, trade accuracy is maximized, settlement processes sped up, and contingencies are reduced. 

The productivity gains of blockchain technology have spurred the growth of many blockchain-based startups.

Blockchain in eKYC Utilities

Blockchain is a specific form of distributed ledger technology (DLT) in which the structure, organization, and development are decentralized. 

DLT is decentralized and is based on the same principles as blockchain, but its corporate organization may be centralized. 

Businesses are trying to balance the speed and accuracy of DLT and the greater security of blockchain to enable Know Your Customer (KYC) information to be shared cost-effectively, bringing greater transparency into the onboarding process. 

Blockchain and Credit Scoring

According to the Consumer Financial Protection Bureau (CFPB), 10% of Americans do not have a credit history, and 19 million Americans are unscored. 

Fintech startups are disrupting the lending markets by using blockchain to extend credit services to the unbanked and underbanked who lack a CBIL score. The unscorable and invisible credit also lacks banking services.

Blockchain technology gives these people access to peer-to-peer lending facilities and faster, more secure lending processes


Nakamoto popularized blockchain when he used it as the public transaction ledger for bitcoin. Most cryptocurrencies use blockchain technology to record transactions. 

Cryptocurrencies free holders from the tyranny of fiat currencies, allowing users to maintain a level of security and privacy that is impossible under traditional banking systems. 

Cryptocurrencies solve critical questions regarding digital trust and fees paid on financial transactions. Its scalability also makes it the most significant investment asset of our generation. 

Is Blockchain the Future of Fintech?

Financial institutions will continue to use blockchain for smart contracts, identity management, digital payments, and trading shares. Blockchain’s advantages in terms of digital trust, greater seamlessness, and reduced costs are fueling mass adoption. 

The blockchain revolution is similar to the internet in 1993 and 1999. Although there are many use cases already, more use cases have not yet been realized. 

Some use cases may fail, but dismissing blockchain is like ignoring the internet because Cuecat, Usenet, and collapsed. Blockchain is the most disruptive and profound technology of our time and will reshape the financial landscape. 


The financial system is built on transactions, contracts, and records of them. These things protect assets and create organizational boundaries. They ensure that identities are verified, and events chronicled. They guide both social and managerial action. And yet, the tools of traditional financial services have not kept up the digital transformation of the economy. 

Blockchain solves issues of digital trust, increasing complexity of bureaucratic processes with ensuing rising costs, and security questions. 

Blockchain has found application in global payments, and cross-border transfers, trading, and trade finance; eKYC utilities; credit scoring; and cryptocurrencies, and the number of use cases is exploding.


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