Distributed Ledger Technologies: Making Trading Independence Achievable

Since the FinTech industry started to gain momentum around the world, multiple debates began to appear. As regards transactions and investments, especially during this whole new era of digitalized capitalization, the most frequented asked questions tend to be the same: Is my capital safe? Will I have to spend too much money on fees? Well, although the future is certainly unpredictable and there’s nothing that can grant results, there are still more convenient ways of operating in the financial industry. Let’s start by saying that centralized financial networks aren’t one of them.

Chances are, you are well familiarized with centralized transaction processing, which have come to conquer almost every corner of the financial industry. But, despite the benefits these networks have brought up, such as amazingly high secure systems in where you could blindly trust your possessions, they are no longer suitable for the high-speed rhythm that the financial industry requires. Centralized processing systems, like the SWIFT model used for monetary transactions, are becoming inefficient, and too slow to keep up with the immediacy that these processes are in need of. In addition, this kind of networks tend to frequently bottleneck, as the traffic in them increases, making the process even more unsustainable.

On the contrary, decentralized, non-linear networks have come to provide the same security ranks, while also making it possible to invest and trade financial assets in real time and with automatic settlements, without the need of any intermediation. This also allows for much lower fees than the ones banks odder. Additionally, this circular-working system prevents the database from becoming inaccessible: even if one of the nods of the network fails, the rest will still remain available to use.

Furthermore, there are still some experts who firmly claim that Distributed Ledger Technologies are, to one extent, even safer than traditional centralized networks. As financial accounts and their respective data bases are widely scattered around the globe, cyber-attacks, financial fraud, or financial terrorism are much less probable. Linear systems, in opposition, are based in one single fixed location, which makes a potential disruption easily attainable.

The financial industry is, indeed, in need of modern, adaptable, immediately available technologies that make monetary processes easier, quicker, and cost-efficient. Maybe it is time to let go of what clearly doesn’t serve us anymore, and make up safe space for what can come to redesign and revolutionize the FinTech industry.


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