Those who like to keep up with technological innovations in the digital world may well have heard of blockchain. It has been hailed by many as one of the most significant recent digital developments since Satoshi Nakamoto created it back in 2008. This article will look at some of the ways blockchain might benefit online trading.
What is Blockchain?
Blockchain is a digital ledger which was originally developed as a vessel for the cryptocurrency known as bitcoin. It allows digital information to be distributed without being copied and exists as a shared, decentralized database open to anyone who uses it.
More and more uses are being found for this revolutionary technology, and it is especially effective for financial transactions given that it affords such transparency and security. As such, many people are looking to the future of blockchain and the role it could play (and has already played) in bringing about new digital innovations.
Bitcoin
Having existed as an online currency for almost ten years, Bitcoin’s exponential surge in value his unprecedented. It is now worth more than $2000 (at the time of writing) and looks set to continue in an upward trend. Some online brokers are now offering the ability to trade bitcoin on the forex market, and accepting it as payment for other traded assets.
It seems that blockchain technology is already seeping into the world of online trading, and there could well be more benefits to come aside from trading and paying with bitcoin.
Asset Transfer
Because blockchain is decentralized, it is almost impossible to regulate, and is owned by everyone who uses it. It is therefore seen as an effective way to cut out the middleman in financial transactions, which could be very useful to ECN brokers as well as various other online entities.
It could also allow assets to be traded on the blockchain network as colored coins, in much the same way that bitcoin is distributed. This would allow for smoother and more straightforward transactions, whilst ensuring that they are totally secure. By using this technology, online trading brokers would be seen as trustworthy and innovative.
Security
Since the blockchain network is a peer-to-peer system, everyone in a secure network has access to copies of financial transactions. It is, perhaps, one of the most secure systems in the world, and could save online trading brokers a fortune when it comes to transaction and general security costs.
If they could use the money they save on updating their trading technology and other business necessities such as marketing, then it would no doubt accelerate company growth. The fact that many large companies and banks are already investing heavily in blockchain is testament to its effectiveness as a secure transaction system.
It is hard to see how such a useful piece of technology as blockchain would go unused by online trading brokers, who are constantly striving to update their technology. With the ability to transfer assets through the blockchain network smoothly, efficiently and securely, online trading could be about to undergo a blockchain revolution.