During the financial crisis, part of the reason credit dried
up was because banks and other financial institutions struggled to define who
owned what securities. As a result, it was hard to judge their exact
credit-worthiness. Without knowing that, businesses were reluctant to lend to
each other.
Bitcoin was brought up in an earlier blog post. But did you
know that the blockchain technology behind it could solve the issue detailed
above?
Read the article and watch the YouTube video to get a good
understand of what blockchain technology is and how it could be applied in this
scenario.
What do you think?
This is an interesting idea because it appeals to big banks that originally opposed cryptocurrency. It would vastly improve liquidity issues, however it could easily be abused. Do you guys think this is a step forward for more transparent banking or a step in the wrong direction?
ReplyDeleteI think this is certainly a step in the right direction with regards to transparent banking and a simpler financial process. As the video mentioned, it's a huge leap into the unknown with no centralized system or accountability. If banks could gain access to blockchain technology and create servers that work just as effectively, then people could get the best of both worlds with simpler cash dealings and a centralized system to provide security in the event of hacking. Plus, if the banks save money and have incentives to operate blockchains effectively, then they'd be more inclined to provide tighter security for their customers.
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