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What is blockchain?
I always thought that everything is simple: I have an account, it is registered somewhere by the banking system. There are numbers on this account that I can exchange for quite real money.
My imagination for a long time drew a picture that if I put the card into an ATM and agree to such an exchange, then the machine will immediately give this money and write off the required amount from the account.
But it turns out, everything is much more complicated! In fact, the ATM does not dispense the money that is in the account, but the money that it has available. In fact, you are not withdrawing your money, but borrowing it from the bank.
It happens like this: the bank sees the required amount of money, checks its data to see if it can provide it, then lends this money to the client, who withdraws cash from the card.
After that, the operation of withdrawing the amount from the electronic account takes place, but not from the bank’s database. The money you borrowed is returned to the bank only after three business days! During this time, information about a monetary transaction goes through many stages of processing and verification.
What is blockchain in simple words for dummies
It turns out that it is impossible to simply withdraw cash from the card due to the complexity of data processing. And the bank has to lend money at the first request of the owner of the funds. It is for the opportunity to borrow cash from your bank account that a commission is charged).
So, blockchain will finally allow people to directly receive money from their account, bypassing all these difficulties! In other words, if such technology is introduced in the banking sector, then ordinary people simply will not feel it, since in their understanding everything is already happening directly.