The Top 5 Reasons Why Blockchain Technologies are Secure
The lending process has long been fraught with difficulty. Between the surge in personal loans for college applicants and the periods of economic stagnation occurring every few years, it is next to impossible to provide a completely stable lending environment for those wishing to make new purchases or finance new projects in an ever-changing economy. The key reason for this is because of the increasing instability of the dollar. Promoting a lending process overhaul around a monetary platform designed to take different currencies into account is therefore crucial. Blockchain technology can provide this economic stability, however it is also important to note that blockchain technologies provide more than just economic stability, especially when the current zeitgeist can be characterized as technologically menacing. Here are the top five reasons why Blockchain technologies are the safest way to lend – and why your lending company should invest in them.
1) Blockchain Holds People Accountable
It is obvious from the number of credit card and bank fraud cases happening today that traditional electronic banking is not all that it is cut out to be. Such fraud can also take place during the loan application process, which is unfortunate for lenders. The current state of this process makes it easy for hackers and fraudsters to gain access to critical information and use it for their benefit. What started out as one application for a loan could turn into a nightmare rooted in identity-theft or a direct theft of valuable commodities. To make matters worse, most of these threats are nearly untraceable.
Blockchain has shown that there is a way to hold people accountable for any missing link in the chain, include those who are handling your investment once your collateral is out of your hands. Transactions are stored within “blocks” and cannot be altered without altering them entirely. This makes it nearly impossible for anyone to tamper with transactional information, making the lending currency safer than regular transactions.
2) Blockchain is a Distributed System
When people think about centralized solutions, they often consider it as the most secure way to store their information and assests. This is partially because anyone can access their information at any time, which allows them to be assisted by staff at any time. While it may seem more complicated to work with your own currency on your own platform, Blockchain lending technologies do not imply that you will have to go it alone. Not only do these lending technologies come with full support, they make it hard for unauthorized personnel to access funds, accounts, and other identifying information loan customers may have.
3) Blockchain Provides a Multi-Currency Platform
Inevitably, the value of national currencies decreases – we experience this as inflation. Economic stability, which is dependent on several different socio-political factors, can put a damper on the lending customer’s experience, should it fail at the point in time when the experience begins. When blockchain supports cryptocurrency, and especially when loan providers adopt a cryptocurrency-based lending platform, the factors governing its stability tend to decrease. This is particularly true for specialized forms of crypto-currency, characterized as tokens which can only be used in a particular context of exchange – real estate being a solid example. Cryptocurrency, via blockchain technology, also transcends global currency boundaries, making it easy for lending customers to create transactions regardless of where they are in the world. Having this type of stability is a form of security all to itself.
4) Lower Network Vulnerabilities
The decentralized nature of a blockchain platform is one form of security, to be sure, but there are other various characteristics that reduce network vulnerabilities. The lower chance of network hacks owes an equitable debt to something called the “hash” system. Blocks of information cannot be added, subtracted, or otherwise engaged by a peer without them affecting the previous hash. This hash includes the hash before it and the hash before that, making the ledger as a whole nearly impossible to tamper with by someone who is not allows into the peer-to-peer network. Network attacks are a big issue for banks and companies that hold identifying information – Equifax, one of the major three creditors, is one such example. Network attacks, when they target classical infrastructure corporations like banks are relatively easy to attempt. Hackers, who may be no more than at a journeyman’s level of skill, can exploit the defenses these institutions have created, provided they are patient enough to discover their weak points.
While it is feasible that blockchain frameworks could eventually be attacked, the likelihood of a network attack is drastically lower compared to a traditional digital infrastructure. The cost of acquiring the tools required to rewrite the previous block’s hashes is immense. Perhaps this will change in the future, but for now this means that the average hacker is compelled to leave blockchain technology alone.
5) Blockchain Developers Take Pride in Their Work
This sounds simple, but the pride developers possess regarding their work is integral to every system that is in place in modern inventions. It is what drives security, quality, and customer interest. Because Blockchain technology is currently in a fledgling state, it is important for developers to put extra effort into everything that they do. That way, they will prove to potential clients that their product outcompetes the systems that are in place. While most developers believe this purely because of the way that blockchain works, they also understand that it will take time for the public to come to the same conclusions they have made. If lending companies are looking for a platform that is more secure than any other on the market, while providing better customer services and better perks – blockchain programmers have made that happen and continue to do so to this day.
To conclude, the lending process is a complex one full of intricacies, unfamiliar to those who have just entered into it. However, blockchain takes into consideration certain customer, economic, and social complexities to provide a platform that is secure and universally sound.