Remittance can be defined as transferring money to a remote location, usually between people living in different countries. While remittance has several benefits of Blockchain for the developed countries, developing or under-developed countries are the real profit makers. Third-world countries have seen a major boost in the economy due to the large flow of money in the form of remittance. This income surpasses foreign direct investments and official development assistance in many countries. As their economies highly depend on the cash transferred from abroad of peer-to-peer money
Blockchain is being integrated into many industrial and business domains. It provides solutions for different real-life problems. Being an efficient Distributed Ledger Technology (DLT). It can be the foundation of a new cross-border payment system capable of solving inefficiencies and offering a quicker, more reliable, and more accessible service. Let’s discuss the benefits of blockchain and cryptocurrency for money transactions. Moreover, explore what are the issues it is currently facing.
But, before we get into assessing the technology and its impact in the world of banking and more specifically the transaction of money. We need to understand what technology is all about and what makes it so unique.
While the concept may seem a bit too complicated. It’s actually quite simple (or will seem simple as we further explore it).
Simply put, a blockchain is a type of database i.e. a collection of information stored electronically on a computer system or in this case, on multiple connected computer systems.
A database design to specifically hold larger amounts of information that is not only accessible but also filters and manipulates by multiple users at once. Large databases are available by housing data on servers that consist of multiple hundreds or even thousands of computers. Housing data on such a large number of computers provides it with the computational power and storage capacity that enables simultaneous access to users.
Blockchain Vs Database
A blockchain collates information in groups, that are also known as blocks. Each block has its specific capacity. When those capacities fill up, they are ‘chained’ onto previously filled blocks. Therefore, creating a chain of data known as “blockchain”. This process continues with more addition of fresh blocks and older ones chained to previously filled up blocks.
Since we’re talking about blockchain. We need to dive into the process of the transaction and all that it entails.
The first step is obviously the entering of a new transaction. That immediately transmits to a network of peer-to-peer computers, scattering across the world.
Once the transaction passes to the network of computers. The devices begin to solve complex equations to confirm the validity of the transaction. It also ensures a legitimate and safe transaction.
After the establishment of legitimacy. The transactions are clustered together into blocks i.e. storage spaces. These blocks then chain together and add to an already existing history of transactions. Therefore, making the entire database permanent and completing the transaction.
But wait, what kind of transactions does blockchain even store? Mostly it stores cryptocurrency transaction history, but can also hold other things such as product inventories and legal contracts — again, depending on the needs of the organization.