Source Unless you have been living under a rock for the past 10 years, you must have heard of the 2008 financial crisis. I'm in the majority, who knows that there was a financial crisis in 2008 but nothing more. The whole Idea that I got was Banks made mistakes to cause this, but what are we going to do about it? I mean they are banks, and we need them. But do we really? That was the question an anonymous person with the pseudonym Satoshi Nakamoto asked him/herself to come-up with cryptocurrency, Bitcoin, in 2009. The blockchain is the underlying technology upon which this Bitcoin was built, that later on has been found to have a range of implementation. What exactly is BlockChain? Simply it’s an immutable distributed digital …show more content…
Traditionally each participant of a transaction maintains their own ledger, leading to duplication & discrepancies. The disputes caused consume time & money also requiring an intermediary. Blockchain eliminates this issue as once the transaction is validated by the consensus and added to the ledger, it cannot be modified. This saves time, cost and transparency increase the trust in the flow of the transaction, eliminating the need for auditing. Gartner's hype cycle 2017 Which is an annual report on upcoming technologies), recognizes Blockchain as an emerging, platform revolutionising technology. Applicability of this process to organizations is challenged by the transaction speed, verification process, data limit, high starting cost and the necessary large processing power. Additionally, the regulatory status with governments is still uncertain. According to Gartner, Blockchain is at the peak of inflated expectation phase, closing in on the peak of the cycle. This suggests some of the expectation around the usefulness of this technology might not be feasible. Additionally, it shows that, it will take another 5-10 years for this technology to become mainstream. Where are Blockchain being used and what future uses does it promise? According to Pilkington, following are some of the areas have the potential to revolutionize the traditional methods and which are currently being implemented upon, relatively on a smaller
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First, I want to give you a little background on the Financial Crisis of 2008/2009. The Financial Crisis began in December of 2007, and by the fall of 2008 the economy was in a huge downfall. This all began in August of 2007 because of defaults in the subprime mortgage market, which sent a shudder through the financial markets. The former chairman of the Federal Reserve described the crisis of 2008/2009 as a “once-in-a-century credit tsunami”. Many firms, including commercial banks, Wall Street firms, investment banks, all suffered significant losses and eventually went bankrupt. This caused households and smaller businesses to have to pay higher rates on the money that they borrowed. This downfall wasn’t just
In 2008 America’s financial system was brought to a stand still as decades of negligence and financial decisions caused our economy to sink into the worst recession since the great depression. Cultivating a problem worse than America has seen in roughly a century points one finger not at a particular cause, but a string of events that finally gave way. Now, eight years later our economy is still recovering, and time has allowed us to look back at decades of mistakes to try and connect the dots of the perfect storm that collapsed our financial market in 2008. In 2009 Brookings Institution, one of Washington’s oldest think tanks, concluded there were three causes that resulted in the crisis. Economists Martin Baily and Douglas Elliot stated that the results of government intervention in the housing market, the influences Wall Street had on Washington, and global economic forces were the three main causes of the economic collapse. They believed that a housing bubble inflated when Fannie Mae and Freddie Mac, two government-sponsored enterprises, intervened in the housing market. The banking industry was called out to be blamed for years of manipulation of our political and financial systems. Lastly, Baily and Elliot cite the global economy and the existence of a credit boom throughout European and Asian nations. Low inflation and consistent growth throughout the world economy spiked investors’ interest in acquiring riskier investments, which encouraged
The collapse of Lehman Brothers, a sprawling global bank, in September 2008 almost brought down the world’s financial system. Considered by many economists to have been the worst financial crisis since the Great depression of the 1930s. Economist Peter Morici coined the term the “The Great Recession” to describe the period. While the causes are still being debated, many ramifications are clear and include the failure of major corporations, large declines in asset values (some estimates put the drop in the trillions of dollars range), substantial government intervention across the globe, and a significant decline in economic activity. Both regulatory and market based solutions have been proposed or executed to attempt to combat the causes and effects of the crisis.
Currently, venture capital (VC) “funding trends for FinTech and the developments in large categories such as wealth management, blockchain, remittance tech, and insurance tech,” certainly do seem to be in the process of changing the face of payments and the contemporary relationship that the payments industry has with banks.
The 2008 financial crisis was the worst economic disaster the world had seen since the Great Depression of 1929. In spite of efforts made by the Federal Reserve and Treasury department to prevent such a tragic event from occurring, a large portion of the US banking system was fraudulent. The banks ' failure took a toll on more than just the financial system - it hurt people. People experienced layoffs, lost pensions, lost retirement funds,
For lack of proper information and interests, many accountants, auditors, business executives are developing a sort of repugnance about Blockchain Technology, while certain prefer to simply ignore the question, because of uncertainties regarding future employment. As James Paine, founder of West Realty Advisors put it “One of the first things that people start to worry about when a disruptive new technology comes along is the possibility of it taking people's jobs away. With accountancy, blockchain is set to hugely impact everything from auditing and cybersecurity to the way that we store, access and interpret information ”. In the other hand, many professionals are welcoming this technological breakthrough because of the opportunities related
Blockchain technology has the potential to restructure large parts of the private investment fund and banking industry. Most legacy systems at private investment funds and banks are much more expensive than blockchain technologies, are subject to human error, and take much more time. Banks charged $1.7 trillion in processing fees in 2014. Because blockchain technology is transparent, verifiable, self-authenticating, and self-enforcing, financial transactions can be executed instantaneously at near zero transaction costs, increasing the efficiency for business and individuals exponentially. These factors in addition to blockchain technology’s disintermediation through technology driven democratized trust, precipitated the financial industry’s substantial investments into blockchain technologies in fear of becoming obsolete.
For example, in stead of payment by cash, transactions can be performed by credit or EFTPOS (Electronic Funds Transfer at Point of Sale) cards. Moreover, this is also a convenience for organizations to finacial management. 2.1.4. Technology 2013 is the year of five high-tech trends of banking industry, which are mobile, cloud, analytics, social, and cyber (Deloitee, 2013). This assignment just focuses on the first three technologies. Mobile banking is a service which customers can perform the transaction, check the balance, or have some feedback by their mobiles. The second applied technology is cloud computing. The US National Institute of Standards and Technology (NIST) formally defines cloud computing as "a model for enabling ubiquitous, convenient, on-demand network access to a shared pool of configurable computing resources – networks, servers, storage, applications and services – that can be rapidly provisioned and released with minimal management effort or service provider interaction." There are many advantages of cloud computing which are to use dynamic computing resources, reduce cost, and decrease complicated level in framework of organization, increase ability to use computing resources. By applying cloud computing, the third party will participate in the client experience, but not intervene in the client relationship of the bank. Analytics technology means that data needs to be kept secret to
Currency acts as a store of value, a medium of exchange and a unit of account. Physical currencies are promissory notes payable to the bearer on demand. Digital currencies are internet-based form of currency. They represent both developments in payment systems and a new type of currency. Digital currencies, in hypothesis, serve as money, at present day they act as money to a small amount of individuals and institutions. It has been often questioned as whether the decentralised digital currency, such as Bitcoin and Litecoin, will emerge as the preferred method of payment for Internet Services or will remain a superficial payment method compared to well established existing payment systems.
Technological advancement has had a gigantic effect in the banking industry. Over the past few decades, the financial services industry has changed considerably with banking transforming from the pen and paper method to the computers and internet method. The pen and paper method took weeks or even months for the transaction to be eventually completed, and then the dramatic introduction of the computer and internet method which changed that time frame to only a matter of seconds to be completed, which reduced the amount of time and labor needed to complete a transaction significantly. Banking is considered one of the most important economic sectors with it being severely influential and responsive to any little change, whether it is domestic or international. Some extreme changes that were brought about by the development of this new technology turned into a globalized nature for the financial services industry. One stroke of a key on a computer could and would change a person 's life extensively or even have a global impact. The new technologies that were created and introduced changed how the consumers managed their money from that time on. Technology has helped to protect peoples’ hard earned money and make it much more impossible for people to be able to write out bad checks or even holding up a bank. The advancement in technology however, also came with some security risks as most things do, that could affect the money that people trusted with the bank and
Blockchain is the now fastest growing technology promising its user anonymity on the web and integrity of their contents. Blochchain has evolved so fast that companies such as IBM, Microsoft and many other are intergrading the technology into the service their offered their customers. What are some of the use cases that blockchain can introduce to an already enhanced banking system that has been around for centuries one might ask themselves. For one the technology can improved the security of its client data and the manipulation of their assets. As of today the banking system in exclusive and only accessible to those societies with a high GDP. It is also usually the case that countries with low GDP also have lowest securities
The online payment marketplace is experiencing an explosion of innovative ideas, plans, and announcements, which one commentator has likened to a “goat rodeo”, a chaotic situation in which powerful players with different agendas compete with one another for public acceptance, and above all, huge potential revenues. Others liken the payment marketplace to a battle among the four platform titans Apple, Google, Facebook, and Amazon. Each of these titans have their own versions of a future payment system that challenges the other players. And let’s not forget PayPal, the reigning power in alternative online payment, or the credit card companies who process over 70% of online payments, or the
Bitcoin was introduced in 2009. The financial crisis had created a deep mistrust of the banking systems in many segments of the population worldwide. Some people saw Bitcoin as a way of independence form the banking system. There are three important features to Bitcoin which contribute to its growing popularity; the low cost of fund transfers, the easy access of the network by people without access to the banking system, and the anonymity of the transactions. (As described above, the transactions do not include names, but rather digital signatures made up of a series of random numbers.)
Russia is leading blockchain innovation in the world. The blockchain is an open, distributed platform that allows two or more people to enter into a smart contract in a verifiable and permanent way. It does not require any intermediary to enter, nor can it be altered retroactively once recorded. This cutting-edge technology may be used in areas such as payment & remittance, intellectual property, proof of right, and authentication in the sharing economy. On July 2016, Russia’s first collaboration platform across blockchain technologies has been formed through a Consortium, which brings together many large Russian banks and private financial service companies. The members include payment companies such as QIWI, B&N
Blockchain Technology supports a distributed ledger system and maintains a growing list of records that are confirmed by the participating people. In blockchain framework, each transaction is recorded in public ledger and stores the information of the transaction. In Current scenario, all the currency transactions between persons or entities are centralized and controlled by some other organizations (Interoperability team). Transferring money will needs bank and merchants who process the payments and they charge fee for each transaction. This is the common phenomenon in every domain and this complexity is simplified by Blockchain technology by creating decentralized environment where no interoperability team is required to control the