An investment in blockchain even a few years ago was science fiction. But today, this blockchain is silently running the elements of our everyday financial system.
Big Banks Are Now All-In
The banks that this technology was supposed to disrupt are actually building it now. They are adopting digital assets through the use of:
- Protective services (protecting online money)
- Tokenization (the conversion of real-world assets into digital tokens)
- Stablecoins (digital dollars pegged against real money)
An example of that is JPMorgan, which is expanding its services in digital assets, and even a group of major banks in the United States is considering a joint venture in stablecoins. It is not just a cutting-edge passing technology, but a huge upgrade of the infrastructure.
Stablecoins: The Internet’s New Dollar
Remember when it was said that crypto was too unstable to be put into actual use? Enter stablecoins. They have turned out to be the tool of fintech.
They are now being used by companies such as Visa and Mastercard, among others, for activities like settlements and remittances. Why? Speed and cost. The cross-border transactions that previously took days and cost a lot are now quick to take place in seconds at a fraction of the cost.
From Experiments to Everyday Reality
Blockchain is leaving the testing laboratory. The buzzword “tokenization” is now something that does exist. Large participants are relying on blockchain to convert assets such as bonds, real estate, and commodities into programmable digital tokens.
Consider it, eventually, your mortgage, your company stock, or even your house title can be presented as a token or a smart contract in a blockchain.
Mining Pools
As people are all discussing AI and stablecoins, there is a silent revolution at the base of the blockchain. Computational capability used in ensuring the safety of networks (such as Bitcoin) is gained through mining activities.
They are not amateurish implementations anymore. Sites such as CCN state that crypto mining pools are now professional and institutional. They have taken recourse to other sources of energy – hydro-power in Norway or geothermal in Iceland, so that they are on the safe side and can perform billions of transactions.
This once-speculative infrastructure is currently driving our most powerful networks.
The Rules Are Coming (And That’s a Good Thing)
Clear legal rules are approaching very fast. Governments are making regulations for the stablecoins, which have to be supported by a reserve, audited, and secured for customers.
But this is actually increasing uptake. With the knowledge regarding the rules, big banks and fintechs can develop and launch their products without any fear. This is not to say that the new age competition will not listen to regulation.
Why This Matters to You
You do not need to be a techie or a banker to care. The financial structure currently being developed will determine the way you will use money over the next few decades.
It will affect:
- Sending money overseas, making it as quick and inexpensive as you want it to be
- The possibility of owning part of a building or a painting using digital shares
- Whether or not you leave your savings under AI
It will be determined by decisions made now, including companies, regulators, and the miners who were able to secure networks. And, unlike these historical financial changes, which were located behind the closed doors of corporate offices, this one is being transacted openly, on blockchains, where anyone can see, build, and participate.
The Big Picture
Finally, watch for mergers. The blockchain and crypto industry is rapidly consolidating. The successful IPOs are establishing valuation standards and attracting investments. Competitors are fiercely developing complete platforms. Firms are not questioning whether blockchain will be important; they are fighting to ensure that they are not on the losing end when it comes around.
