How Banking Institutions Can be Decentralized, Explained

3.

P2P, Blockchain, cryptocurrencies, Machine Learning, Big Data and smart contracts are used in crypto banking.

 

P2P. Participants are private users, not banking institutions. The crypto bank links a borrower that meets the correct credentials to a lender. P2P takes away many of the bureaucratic processes that centralized banks need to go through when approving a loan.

 

Blockchain. All transactions are recorded on the Blockchain. It is a transparent, immutable ledger that will provide data for users and well as AI algorithms to find the right matches for lenders and borrowers.

 

Machine Learning Big Data.These technologies help to automate the lending process and cut through bureaucracy. AI can work 24/7 and match lenders with borrowers.

 

Cryptocurrencies. While fiat can be used in decentralized banking, cryptocurrencies operate much smoother and will become the sole future of decentralized banking. These decentralized currencies speak the language of the Blockchain and keep perfect track of asset transactions.

 

Smart Contract. Smart contracts are used for a variety of reasons in crypto banking, such as converting currencies, binding contracts between two parties and automating transference of funds between the borrower and lender.

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