Blockchain and the cashless society

Blockchain and the cashless society

Chris Trew

CEO at Stratis

Views 1331

Blockchain and the cashless society

17.09.2019 12:45 pm

It took 200 years before the invention of the printing press heralded the widespread use of modern banknotes. Four centuries on and blockchain technology – still barely a decade old – is moving so rapidly that the days of cash are surely numbered.

The way we use money has been revolutionised by plastic cards, online banking, contactless and smartphone payments. The next big development will see blockchain turn the concept of a cashless society from science fiction to reality.

Some countries, such as Sweden, are already going down the cashless route using existing technology. But these systems are still relatively slow, vulnerable to fraud and depend on banks and other financial institutions to acts as intermediaries.

Blockchain enables rapid transactions on a distributed ledger, a digital record stored on a network of computers around the world. It also provides a high level of security against fraudsters and makes transactions quicker and cheaper by removing the need for intermediaries.

It supports cryptocurrencies, or digital money, such as Bitcoin and alternatives known as altcoins. It also supports crypto tokens which are used on existing blockchains as a method of payment, to give holders access to goods and services or a share of a business.

For instance, blockchain could be used by workers to send wages to their family in their home country. Tokens could be sent in seconds. Such remittances can take place securely, with no middlemen and lower costs.

There are now many cryptocurrencies in use in addition to bitcoin. The sector is evolving rapidly and as they become more widely accepted it is inevitable they will be adopted by businesses of all types.

One of the elements that makes blockchain so revolutionary is that it supports not just the cryptocurrency and payment system but the whole transaction process through smart contracts. As a digital ledger that cannot be altered, it provides users with traceability and security without the need for middlemen.

Its use will span retailing, manufacturing, distribution, financial services, property, gaming, and healthcare.

Even central banks that issue notes can see the way the wind is blowing and an increasing number are developing their own central bank digital currencies (CBDCs) using blockchain.

It has another big advantage because it can be used for micropayments of a few pence or cents, such as paying to listen to a piece of music, watch a video or read an article.

This has huge implications for the Internet of Things (IoT) where devices are linked via the web, from household appliances to smartwatches and from sensors in buildings to robots on production lines. Blockchain will seamlessly host the contract between provider and customer as well as payment.

Blockchain also heralds a revolution for the two billion-plus people without bank accounts by giving them access to digital financial services from which they are currently excluded. For a close parallel, see how mobile phones have transformed communications and financial services.

For individuals, businesses, financial institutions and central banks, there is a now a rapidly growing momentum pulling us away from a centuries-old system based on banknotes to one built on blockchain.

Latest blogs

Heiko Stuber SIX

SFTR: an overnight regulatory reporting headache ten years in the making

Waiting ages for a major regulation to come along, and as soon as it arrives another new rule quickly follows. Before the industry has a chance to fully iron out all the post-MiFID II wrinkles, another regulation comes along. This time, compliance Read more »

Laura Timms MHR Analytics

Finance transformation with Analytics

Finance transformation with analytics   Finance transformation is all about improving the overall value that finance provides, but with finance teams under increasing pressure to do more with less, this is something that is becoming increasingly Read more »

Deborah O'Neill Oliver Wyman

Why Robots & AI Will Never Rule Banking

Around the UK, alarm is growing from a belief that robots are taking away jobs. This fear is misplaced. From the steam-powered cotton mills of the industrial revolution to the rise of ATMs in the 1970s, there is little evidence to support the theory Read more »

Robin Singh

What Crypto Investors Should Be Doing To Minimize Their Taxes

Crypto taxes can be heavy on the pocket; especially when you aren’t prepared for them. Since there isn’t too much awareness around crypto taxes yet, most of us tend to end up with a heavy crypto tax liability come tax season. However, in the past Read more »

Mohit Manchanda,Head of Consulting UK and Europe and Prakhar Agrawal EXL

How can insurance companies ensure compliance one year on?

The much anticipated data privacy regulation GDPR hit businesses back in 2018, and ever since there has been a constant growth in the quantity of data breaches reported, at the same time an increase in customer complaints. The magnitude of recent Read more »

Related Blogs

Nish Kotecha and Bryan Foss Independent Director and Visiting Professor Finboot , Bristol Business School

How blockchain could restore trust to the fund management and audit industries

Not too long ago, Neil Woodford was still regularly being heralded as a “superstar” manager and the “Oracle of Oxford”. How different the story is today.  The reasons behind Woodford’s fall from grace have been extensively covered, but can largely Read more »

Michelle Joe blogger

The Most Interesting Real-world Applications of Blockchain Technology

Blockchain is changing the mindset of businesses and governments as we know it. Blockchain has been identified as the next big thing since the internet. It is producing innovative models that are disrupting traditional ones. The momentum created Read more »

Nish Kotecha Finboot

Blockchain’s role in energy supply chains and the fight against climate change

Two topics dominated September’s UN General Assembly, at times provoking fiery debate. World leaders gathered in New York amid simmering tensions in the Middle East. The recent attacks on key Saudi Arabian oil facilities prompted questions about how Read more »

Juan Miguel Pérez Finboot

The challenges facing enterprise adoption of blockchain and why middleware is the solution

In the 20th century, we saw how automated machines transformed supply chains in the manufacturing and industrial sectors, with the key objectives of increasing productivity and streamlining logistics. Today, we are seeing a new wave of Read more »

Mark Smith Ayming

Blockchain is still an emerging technology

Blockchain is a distributed ledger technology (DLT), a database of transactions that has been agreed to be shared across multiple websites, institutions and countries. This sharing of information creates a series of ‘witnesses’, each with an updated Read more »

Free Newsletter Sign-up
+44 (0) 208 819 32 53 +44 (0) 173 261 71 47
Download Our Mobile App
Financial It Youtube channel