Last updated on August 30th, 2020 at 02:47 am
Thank you for reading this post, don't forget to subscribe!
Blockchain Finance on Algorand Blockchain
Algorand being the first of its kind is an entirely scalable, permissionless and decentralized blockchain.
This means that anybody can join the network, participate in the protocol and use the blockchain to transact and generate blocks without the need of any custodial or central body.
Algorand possesses some features which are entirely unique and they are:
TRUST: It’s built from decentralization and cryptographic tool therefore ensures immutability of the shared ledger. Anyone can also participate in the security of the decentralized network making it almost impossible to be hacked.
SPEED: the speed of performing transaction is second to none
MINIMAL COST: the cost of transacting is relatively cheap.
INCLUSION: Algorand allows anyone to submit new transaction and also read the previous ones. Having gotten to know what Algorand is all about, let me try to shed more light on what finance is.
Finance is a broad term that describes activities associated with banking, leverage, credit, capital market, money and investment. Finance is one of the major sector in the whole world and should be well managed to achieve progress in the world.
Now that we know what both Algorand and finance are, let me enunciate on how Algorand can be of relevance to financial bodies.
Below are some of points that show the relevance of Algorand:
INSTANT SETTLEMENTS: transactions can be done in seconds with Algorand. Currently settlements can take up to a week.
Read Also: BVN: The Easiest Method of Identity Verification For Crypto Focused Service Providers Across Nigeria
With Algorand blockchain, Blockchain Finance settlement will become user optimized which will save significant amount of time and money for both parties involved. Algorand will remove the need for lots of middlemen such as bank officers as transactions will be settled instantly.
Therefore, making use of Algorand blockchain would improve the Blockchain Finance ecosystem speeding up and also reducing the energy involved in performing transaction.
MORE EFFICIENT MAKEOVER FOR PAYMENT: Algorand having its native token (ALGO) and hundreds of assets built on its blockchain would be an efficient payment method during transaction by financial bodies. It will reduce the risk in conveying funds in form of cash and all reduce the stress involved.
REDUCED ERROR HANDLING AND RECONCILIATION: One of the important features of Algorand blockchain is that any data that is recorded is immutable. Meaning, any data recorded on Algorand blockchain can be tracked as it leaves a very detailed history of transaction. For this reason, it eliminates error handling and reconciliation.
REDUCED EMBEZZLEMENT: Embezzlement is one of the major problems being faced by financial bodies. Funds can be diverted by corrupt central bodies by deleting transactions history even after being recorded. Algorand on the other hand is immutable.
Once a transaction is entered on its blockchain, it can’t be tampered with. Imagine how valuable this will be to the financial bodies and how embezzlement can be curbed.
IMPROVE CAPITAL OPTIMIZATION: One of the main features of Algorand blockchain is that it removes the need for a trusted intermediary and allows peer-to-peer transaction.
When financial bodies employ the use of Algorand blockchain for Blockchain Finance, it would render the fee-charging intermediaries such as custodian banks or clearers (those vouching for counterparties credit position).
As a result of this, Algorand offers better capital optimization by reducing operational cost. This also increases the rate of users as people will prefer a capital optimizing establishment to ones that uses lot of capital.
With the above listed points, it is certain that Algorand is of relevance to financial bodies not just only in a single way, rather, numerous ways.
Adopting the usage of Algorand blockchain will be a great development to financial bodies entirely. The fact is, it is time to change for financial institutions and benefit from the possibilities of scalable, permissionless and decentralized Algorand Blockchain.
UNDELAYED INTER-COUNTRY FUND TRANSFER: Algorand decentralized blockchain is built with a very fast rate of transaction. It enables smooth and swift transfer of funds between two countries. With Algorand’s technology that enables uninterrupted finance, providing all day transfersibility and access to the global market.
Banks takes a few days to perform inter-country fund transfer because it would be executed through society for worldwide interbank financial communication (SWIFT).
Of course, the whole process of transferring the fund is not limited to SWIFT alone, The fund to be transferred would be processed through system of intermediaries which causes delay and also increased cost.
With algorand blockchain, inter-country fund transfer would be conducted swiftly with no delay and also with a very reduced cost.
Thanks for reading.
Written By Yusuf Muhammed—Algorand Ambassador