Thanks to the avant-garde technology of the blockchain, it is expected to revolutionize the entire world and not just the financial industry. The blockchain was first introduced in the financial sector, in the form of a crypto-giant application called Bitcoin and ever since its accouchement, it is changing the financial industry.

There are series of problems in the current monetary system and an anonymous idealist “Satoshi Nakamoto” took the “baton of change” right in his hands. We will go through the series of problems which the financial industry faces and decode how the blockchain overcomes the issues.

PROBLEM 1: We currently have the central ledger system. How is it a problem? Our transactions are recorded on the central database of the central bodies like bank and exchanges. These central bodies can manipulate your ledger and let’s just stay honest, you can’t do anything about it.

SOLUTION 1: The blockchain network is based on the distributed ledger where there is no central controller. Each person on the network has the ledger of entire the transaction. Everything is carried on the internet, under the watch of every node present on the network. The transactions are made successful by the people, not by the nod of central authority. The blockchain database stores the transaction forever and anyone can delve the transaction which was made years ago.

Jitendra Rajput, co-founder at “Encrybit – The Future of Cryptocurrency Exchange” says, “Blockchain is bringing back the trust which was lost due to corrupted middlemen. The systems will be more reliable once blockchain is used to its full potential.”

Since the entire power is given to the people of the network, the ledger becomes manipulation-proof.

PROBLEM 2: By manipulating the transaction details, the central ledger system can charge you an overdraft fee.

Refer this table 1 which shows the series of transactions which John had undergone in the month of January.



Debit Fee Balance
23/1/2017 Fuel 5$   185$
24/1/2017 Restaurant 29$   156$
25/1/2017 Movie 8$   146$
26/1/2017 Electronics 90$   58$
27/1/2017 Supermarket 105$ 35$ -47$

Table 1  

John thinks that his expenditure bounced on the last day and he should have been charged for the last transaction. Refer the table 2 where bank manipulates the ledger and charge the overdraft fees.


Date Description Debit Fee Balance
27/1/2017 Supermarket 105$   185$
26/1/2017 Electronics 90$ 35$ -5$
25/1/2017 Movie 8$ 35$ -13$
24/1/2017 Restaurant 29$ 35$ -42$
23/1/2017 Fuel 5$ 35$ -47$

Table 2 

SOLUTION 2: As mentioned earlier, the blockchain network doesn’t allow any kind of manipulation. This makes John and others less vulnerable to cheating by the ledger tampering.

PROBLEM 3: Non-communicable ledger is one of the problems in financial institutes. Let’s go through an exemplary life of John who works as an electronic trader. Whatever cash he receives from his business every day, he deposits money to Bank X. Bank X updates the ledger and John’s account is credited with whatever sum of money he has deposited. 

While leaving for home, he suddenly realizes that he wants some cash on hand for his kid’s tuition fees and local purchasing. He rummages around for the nearest bank and he discovers that he has only one choice to withdraw from. And that is from Bank Y. Since there is no established communication between the Bank X & Y, he has no choice but to go back to the first bank to withdraw the required amount. 

More than just the problem of having to walk to the own bank, John will have to trust the central ledger of the bank. If the bank refuses the transaction, John has no other choice than to close his account due to his loss and frustration.

SOLUTION 3: There is no requirement of communication because the transaction is carried over the internet and one doesn’t have to go to the ATM of the specific bank accounts.

PROBLEM 4: The major problem with the current monetary system is unlimited minting and printing of the currencies. The central government holds right to print unlimited currencies without any gold backing. This makes the fiat currency waste and its store of value zero.

SOLUTION 4: There are some problems with cryptocurrencies as well. There is no barrier to entry and almost every single person earth can have their own cryptocurrencies. But it still limits the mindless minting of the coins. For example, Bitcoin has pegged its maximum value at 21 Million units. Even Satoshi can’t generate more values than this. This creates the scarcity of the currency and scarcity is one of the important necessitates of the medium of exchange.

PROBLEM 5: There are several countries which have poor banking sector. Years after independence, they have failed to gain the basic financial accessories like bank accounts.

SOLUTION 5: Some people are in a belief that blockchain will do to banking what internet has done to the media. The blockchain technology promises to give financial services to those who don’t have access to the bank accounts including those who in the third-world country don’t have bank accounts. Applications like Bitcoin and other cryptocurrencies empower the people to send and receive the money on the network without the need of central operator or approver.

PROBLEM 6: Today, the traditional financial institutes have gained notoriety of malpractices which leads to woes like subprime crisis. Although it is wrong to point at single entity because the mess was the collective effort of world’s central banks, credit owners, and public involved in it, central banks were the biggest culprits.

SOLUTION 6: It is expected of the blockchain that it can prevent the next financial crises. Now, that’s something worth a ponder. The distributed ledger gives the power to monitor individual’s ledger and empowers regulators with visibility of trading ledgers- something which central system lags and caused crises. The blockchain also helps in evaluating the derivatives and smart securities in real time. This prevents the traders and investors from putting their money in the bad entity.

PROBLEM 7: Something which has kept large banks excited is keeping track of trades in bonds or stocks, and making sure that payments are carried properly. At present, it is a complex process as it involves banks, traders, exchanges, middleman, clearinghouses, and others. It takes two to three days to verify if people have sold their bonds or share and then the movement of funds is allowed. 

SOLUTION 7: If blockchain is used to log ownership data, all this work could be done in minutes. Systems like this in banks can save around $20 bn. Now, that’s a huge number considering how they have been sanctioning the loans without proper collateral.

PROBLEM 8: Accounting has been one of the serious issues in any industry. At this point in time, everyone from accountants to financial executives scratches their heads in maintaining the accurate and accessible data. In order to have the consistent records, they cross-verify and perform multiple-checks. This process of reconciliation and consolidation waste a lot of time and industry needs a desperate change now.

SOLUTION 8: Blockchain will be the single source of data which can be referred by all the parties involved in a trade. What would introducing blockchain as a common database platform would do? It would end costly audits by automated cross-checking and double-verification. Basically, the blockchain can be used where values are transacted.

PROBLEM 9: The most basic setback of having cash is double spending. Let’s understand what double spending is through a simple example.

John decides to eat at McDonald and order a burger worth $10. He pays in cash and that cash goes to the McDonald vault. There is no chance of spending the same $10 somewhere else to purchase something else. UNLESS YOU SNATCH THE MONEY AND RUN. If you manage to snatch it, you can spend that money somewhere else, which is basically double spending.

SOLUTION 9: Blockchain applications like Bitcoin manages double spending problem by updating the universal ledger by confirming mechanism carried out by the validators. Bitcoin’s blockchain contains all the transactions in chronological order appended with timestamp right from the beginning of its operation. Hence, there is no way a person could spend his money twice.

The Final Call 

There is a massive outpour regarding the blockchain among technocrats. Although the blockchain is in its commencement phase, there are series of development and modification going through. It is speculated that blockchain will soon get into the third generation where things would get stable and it will become a regular part of our lives, just like the internet has been.



This is a guest post/opinion piece and should not be construed as financial advice. 

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What does it take for Bitcoin to achieve mass-adoption? is not responsible for the article’s content or accuracy and may not share the author’s views. News and research are not personal recommendations to deal. All investments can fall in value so you could get back less than you invest.

What does it take for Bitcoin to achieve Mass-Adoption?

The biggest obstacle for Bitcoin right now is, that so few people use Bitcoin. But why do so few people actually use Bitcoin from a day-to-day basis? Well, the answer is, because so few people use Bitcoin. That might sound a bit confusing right away, but I will explain myself.

Bitcoin has the obstacle to overcome, same as Facebook. Facebook became so valuable, because literally every friend of yours, and their parents where using it. If no one used Facebook, then I really doubt it would be nearly as valuable to humanity as it is today.

The same exact thing also applies to Bitcoin. What makes money valuable, is the fact that you can pay anybody for anything with it. Good luck paying your local supermarket in Bitcoins. It just doesn’t make sense to do so.

This is also called the network effect. It sates, that a system is only so valuable, as the number of people using that system.

So, let’s dive into the 3 deciding factors, that must happen for Bitcoin to fully achieve mass adoption.

First, of course, is the support by a big corporation or even country. For example, if a big company like McDonalds starts to accept Bitcoin, then people would be more inclined to make purchases with Bitcoin. This makes total sense, because why would anybody adopt the usage of Bitcoin, if you couldn’t make any real-world purchases with it? Exactly, it doesn’t make any sense whatsoever.

The first point was pretty obvious, so let’s look at the other deciding factors, that are crucial for Bitcoin to be mass-adopted.

Did you actually know, that a third of the world’s population, 2,5 million adults to be precise, do not have access to the banking system? Yeah, what people in the first-world countries take completely for granted, isn’t all that common all around the world: A bank account. On the other side, many more people in these third-world countries do have mobile phones, but no bank accounts. So, what if all those people start using Cryptocurrencies, like Bitcoin, for their online and day-to-day transactions? They could skip the traditional banking system and directly buy and sell Bitcoin from their smartphones. If one third (or even less) of the world population starts to use Bitcoin, it will gain world-wide recognition and overtake any other currency.

The third scenario that could happen, is that a major economic collapse or abuse occurs. When this happens, lots of people will want to transfer their wealth to something that isn’t dependent on any country or government, but is universally accepted in every country of the world. There aren’t many options for such things. One of these things is, gold. And the other could be Bitcoin, which I see as the digital version of Gold.

I hope we will never have to experience such a catastrophic event in our lifetime, but it sure is a positive thing for Bitcoin, since lots of people will adopt it.

These are all the point I could think of. Thanks a lot for reading and have an awesome day! Visit me at for more Crypto-article?