How blockchain technology will affect the future of financial operations
The debate about blockchain technology and cryptocurrencies has recently been so topical that the changes they bring about...just do not end.
In addition to the media's most recognizable virtual bitcoin currency, new generation of decentralized virtual currencies based on blockchain technology are also gaining momentum. In doing so, there is often the question of how the blockchain technology will affect the future of financial operations and what will be the response of the European Securities and Markets Authority (ESMA), which has been working as a central body for the protection and stability of the European financial system for some time now.
One of the goals of the modern blockchain technology is to eliminate the rigidity of the traditional financial system, which is linked to the high costs and length of the financial transactions, making it increasingly incompatible with the needs of the modern economy. The operation of the traditional financial system is concerned with the plethora of financial institutions, especially banks, which, as "interfaces" or trusted third parties, are responsible for verifying and approving financial transactions.
Blockchain technology eliminates rigidity with a peer-to-peer system that excludes the need for interfaces, thereby significantly reducing the costs and timing of financial transactions. The essence of technology is therefore a decentralized system in which several user systems confirm the same information (execution and transaction record), which makes it impossible for individual users and third parties to arbitrarily and retroactively modify the content of the transactions recorded, which makes the data durable and unchanged. At the same time, this is a very transparent system, since each data block in the chain stores a copy of updated and mutually coordinated transactional data, and this information is publicly accessible to all users.
Despite all the advantages of blockchain technology, the fact remains that virtual currencies continue to represent an unregulated form of digital money that is not issued and does not guarantee the central bank. Simultaneously with the lack of European and national regulations, individuals do not enjoy any rights and legal protection when paying with virtual currencies. This means that in the event of an unauthorized or incorrect charge of a digital wallet where usually virtual currencies are stored, the individual can not demand the cancellation or reimbursement of the transaction, as is the case with traditional banking transactions. The reason for this is above all the anonymity of the holders and recipients of virtual currencies, who, despite the transparency of the transactions themselves, remain unknown.
Since the blockchain technology is based on an inter-user system that is not territorially completed, international co-operation and the pursuit of uniform regulation are certainly important for a comprehensive legal arrangement of virtual currencies. From a legal point of view, virtual currencies for now remain in t. i. gray zone, given their increasing media visibility, the interest of investors and the already existing amount of invested capital, the overall legal regulation of this area is only a matter of time.
- translated from SvetKapitala-Blockchain