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Blockchain technology could be the future of banking

Posted February 24, 2018

Blockchain network. Image credit: Tumisu via Pixabay, CC0 Public Domain

The growing interest of banks in blockchain technology could propel it to greater heights in the next few years as more banking institutions implement it to their structure. InfoSys reveals that about 69 percent of banks are now experimenting with permissioned blockchains.

Blockchain technology is no longer limited to cryptocurrency transactions as its security and ability to create indelible records makes it an ideal ledger for companies and businesses, most especially banks.

The findings of the “Banking on Blockchain: A Value Analysis for Investment Banks” report by Accenture reveal that blockchain technology can potentially reduce the infrastructure costs for the biggest banks in the world. By relying on the technology, banks can reduce costs by an average of 30 percent which equates to an annual savings of $8-12 billion.

Nevertheless, even if this technology is good for the infrastructure of various sectors, there’s still a problem that is yet to be addressed—blockchain consumes massive amounts of energy.

It is still a growing sector and looking for ways to make it cost-efficient and sustainable is a must. Blockchain is projected to be delivering up to $21 billion by 2020, $176 billion in 2025 and $3.1 trillion by 2030. This basically means that more companies are going to dip their feet in blockchain platforms in the years to come and this growth could consume more energy unless proper steps to address the problem is taken.

Low energy cost mining units secured by blockchain leader

Blockchain processes such as keeping track of transactions and mining Bitcoin and other cryptocurrencies require a lot of electricity. Bitcoin mining alone accounted for 33TWh of energy, which is exactly the same amount consumed by Denmark every year. Because of its massive energy consumption, people are wondering if the world could actually afford blockchain technology.

This growing concern is not ignored by industry leaders like Global Blockchain Technologies Corp. (TSXV:BLOC.V, OTC:BLKCF). Part of the company’s advocacy is to maximize the potential of blockchain and that includes finding ways to lessen its energy consumption.

Earlier this month, the company announced that it has acquired an additional 75 MW of low-cost power mining units through its acquisition of Coinstream Mining Corp. The crypto mining company makes use of energy efficient blockchain methods to mine Bitcoin which could pave the way for more low-cost energy rigs.

With the Coinstream deal, Global Blockchain is now managing its assets such as the Manitoba joint venture facilities, Mozambique facility, and Distributed Mining Inc. The Manitoba facility can give 50 MW of capacity, with 35 MW of capacity available immediately while Mozambique facility has 25 MW of capacity, with 10 MW of capacity available immediately.

Aside from Global Blockchain, there are other companies who are seeking to provide a means to do blockchain, without the excessive energy consumption. Greeneum for example, begun testing a new low-cost peer-to-peer trading platform last year.  The company is eyeing a full launch later this year.

Written by Anna Reyes

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