The Next Financial Revolution Will Be Driven by Blockchain- Mauro Casellini
Mauro Casellini looks at whether blockchain technology is viable. He discusses the intricacy of the present financial infrastructure and the advantages that this more recent technology will provide based on the payment use case. He emphasizes the benefits of blockchain technology over the current, highly centralized financial infrastructure while outlining its workings in his lecture. Due to distributed ledger technology, peer-to-peer transactions will be possible without needing a central mediator. Digital decentralization has made it feasible to send money and other assets digitally. The Internet was first used to disseminate information. Mauro has been employed in the banking business since 2006 and in the blockchain industry since 2016. He is thoroughly aware of the opportunities that blockchain technology provides the current financial sector because of his work in financial services and his passion for technology. His former Liechtenstein-based organization successfully implemented a corporate strategy in the field of blockchain banking. He is now the Head of Europe for a well-known blockchain financial services company.
Of the new legislation, Mauro Casellini (@casellini_mauro), Liechtenstein’s Bitcoin Suisse CEO (@BitcoinSuisseAG), says: pic.twitter.com/S3apHZzIRp
— dGen (@dGenOrg) March 5, 2020
2.8 billion people globally lack a bank account. They either don’t have a bank account or have minimal access to financial services, as shown by this. Many people also have little faith in their banks. The financial services industry, however, heavily depends on trust. We claim that confidence and trust in intermediaries are the cornerstones of our system. Do you trust the bank your bank utilizes even if you believe in your bank? Money transfers across countries were not possible before the Internet was invented; how would this have been possible with the system at the time? We have a solution. However, we have found a solution that can drastically change the situation thanks to the Internet and new technology that has been fully functional and error-free since 2009.
Castellani clarifies that Maria resides in Los Angeles while Peter is a resident of Zurich. The $100 Peter owes Maria is what he wants to pay back. He uses his bank account since they are unable to meet in person. As a result, he transfers the funds to Maria’s account online. Are banks A and B the only parties participating since it’s so easy? Not! Because the system is built on trust in intermediaries, as was already said, a single transaction from Switzerland to Los Angeles involves a minimum of two banks and a maximum of five. It might also cost twenty dollars or more and take up to three days. As a result, money transfers from Switzerland to Los Angeles take three days and $20. Like Peter and Maria, Casellini can easily converse with her. He takes out his phone and makes a call or a WhatsApp message to her. Except for financial services, all uses of data and communication on the Internet are accessible. Banks are a problem. Banks are expensive, operate as they choose, and fight to maintain dominance. However, it will change as a result of this new technology. A close examination reveals that the system seems reasonable. Due to the Swiss bank’s refusal to accept the Los Angeles bank. How, then, should it interact with them? How ought they get the funds? As a result, these significant counterparts are required, upon which banks may rely. In this case, a correspondent bank connects the four banks; payments from bank A to bank B must always be routed via this bank, which manages the transaction, keeps track of the general ledger, and knows how much each bank owes the others.
What will transpire, however, if this bank fails? This is the only systemic weakness in our present setup. Many other banks depend on them, and we would lose a significant sum of money if one of these hundreds of central custodians went out of business. It’s also no longer necessary. Again, if we examine the mechanics of this transaction, we could board a plane in Zurich and land in Los Angeles 13.5 hours later. Our trade, however, requires two stops. Does it suit us? Not! Why is this how our money should be handled? In this case, the money leaves Switzerland, goes to New York, stops someplace in Europe, and then, three days later, arrives in Los Angeles. This is not the proper way to do business. As was previously said, new technology has been working nonstop since 2009.
If Peter so desires, he is free to offer Maria cash. He could also tell a bank this information. Each participant in the system is peer-to-peer connected with him. The best aspect is that because all other parties handled the transaction and are aware of who owns how much money and who contributed how much to whom, we do not need to worry if Peter’s firm fails. This method is known as “blockchain technology.” In the media, there was a lot of talk about Bitcoin and related subjects. Unquestionably, Bitcoin is a stunning use case of the blockchain, but it is just one of many that will come to be in the future. Peter only needs Maria’s wallet address to log in using his laptop. The address of this digital wallet resembles a bank account number. Various indicators are in it. He will then deposit the money and mail it to her. It has now come. This transaction doesn’t involve an intermediary. Very simple! The user experience is quite simple. The middle and back, though, are a little more complex. They go to the railroad station to wait for the train’s wagon. Eventually, the new wagon will show up. In the world of blockchain, this wagon represents a block. A mining company produced this wagon. They also choose which transactions to pursue. Each transaction thus includes at least one kind of traveller.
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This happens on the Bitcoin blockchain around once every ten minutes. Every ten minutes, these transactions are completed and transferred from A to B. It’s comparable to choosing pure gold as a gift for a friend who lives in Los Angeles. In a reservation system, there is not just a number, but it has also changed. Nothing can disappear. We can see this wagon’s repetition thanks to a fantastic piece of machinery; the mining company decides which transactions to pursue. They look at everything, but then something unusual happens. The distributed blockchain is delivered with this block. And every individual acts as a conductor. They vouch for the reliability of these exchanges. As a result, hundreds of individuals, thousands, and millions will verify and compare a transaction. A transaction-verifying decentralized infrastructure confirms a single regulated organization’s validity about an entire ecosystem.This approach must be superior. This wagon will gradually be added. For every ten minutes on the Bitcoin blockchain, as an example. The process is either much slower or significantly faster on other blockchains. Multiple block durations and periods are needed to add additional wagons compared to the use case. That keeps growing and growing and growing. This train will keep growing forever.
We are transparent in addition to trusting technology rather than a centralized alternative. We can verify someone’s assertions. If someone were to declare now,
“Look! This image shows how I do my internet banking. My bank account has ten million dollars. ” There is no way to verify it. We may assert that due to blockchain technology, “Sure, sir! Indicate your address. “I can attest to this as well. As a result, we’ll shift to a decentralized financial system that puts openness and trust first.”
Since the technology itself administers transactions rather than dubious central counterparties, blockchain technology enables us to create a system accessible twenty-four hours a day, seven days a week, in which we have much more trust. In addition, there may be less illegal and immoral behaviour due to greater transparency.