- Blockchain vs. traditional finances debate is heating up in the post-COVID-19 world.
- Blockchain is the innovation leading the financial world.
- The traditional financial system is slow and expensive.
Digital trade is set to break all previous records in the upcoming two years and exceed $4.6 trillion worldwide. With the advent of blockchain vs. traditional finances and the introduction of e-wallet technology, the e-commerce trade continues to boost its popularity with firms like Paypal and Stripe joining the lead.
Crypto trade is being enhanced through the integration of blockchain structures marking the undoubted next expansion milestone of the growing trend. The current payment channel includes five or fewer parties making way for a single transaction to come through a secure channel.
Commonly known as the payments stack, these parties work simultaneously to ensure a smooth transfer of funds, but in turn, each component of the stack charges its payment cut. Not only does this make the traditional payment system expensive, but the involvement of multiple parties adds to process complexities and time consumption, turning blockchain vs. traditional finances debate in favor of blockchain.
Importance of blockchain vs. traditional finances
Blockchain technology enables one-step, dual authenticated, reliable, and highly secure transactions abolishing the conventional payment stack out of the picture. This reduces time and cost per transaction drastically, especially in cross-border payments. Speed and transactional costs continue to be sensitive factors, especially to medium and small-scale businesses heavily dependent on cash flow.
Blockchain solutions offer swift transactions within seconds, while traditional payment channels take days before payment’s arrival to the merchant’s bank account. Constantly evolving secure and reliable solutions to cybercrimes hovering around crypto trade, blockchain’s seamless integration adds to its data protection and privacy protocols.
Traditional payments are looked upon as supremely trustable entities; however, reports suggest a 136 percent rise in frauds between 2017-2019 globally, while 78 percent of reported incidents indicate B2B payments fraud. A whopping 1.8 percent of overhead costs paid in traditional B2B transactions is another reason businesses adopt alternative practices like fintech.
Traditional payment methods are bound to diminish over time with the world constantly opting for virtually available and swift processing tools, making blockchain and cryptocurrency a promising billion-dollar industry.