While our modern banking system can be traced back to 15th century Italy, the evolution of our financial marketplace dates back to sometime around 12,000 BCE. This marked the societal shift away from hunting and gathering, and into a more stable agricultural system.
When we gained the understanding as a collective that we could rely on each other to provide essential goods and services, we improved the stability of our communities and paved the way for larger societies to exist. The stability we sought in advancing to agricultural food systems, is the same stability society created through banks. We needed a solution to holding wealth and resources without having to store it insecurely on our own property, or constantly acquire resources on a daily basis.
This system has supported modern commerce for thousands of years and has seen its own developments and changes in-line with technology. Checks, credit cards, and eventually online banking, all transformed the way that we activate our savings to make life happen. But, the traditional banking system is not without its flaws and weaknesses.
Security challenges in traditional financial systems
It’s no secret that banks fail. Holding your assets in a third party was transformative in its convenience, but has left many people susceptible to the shortcomings of bank management. The government has had to step in to fund failing banking systems on numerous occasions, most notably in 2008.
Banks also offer limited resources for fraud prevention. Hackers are numerous and constantly searching for new ways to break through security protocols. It’s a constant game of cat and mouse that the bureaucracy of traditional finance isn’t equipped to handle effectively. Each security breach sets off a chain of events that requires significant time to address. This process could look like this:
- ● Initial hack occurs
- ● Either the bank, or worse, the individual notices the transgression
- ● The transaction may or may not be disputable and funds may or may not be returned
- ● IF the bank decides to take action, they will perform an internal investigation
- ● The investigation may involve a third-party vendor to execute or support the auditing of the bank’s system
- ● Based on the result of the investigation/audit, the bank may decide to update its processes
- ● This could involve purchasing a new technology stack or system, which then requires time to implement and train employees
Additionally, human error, disgruntled employees, and working with other vendors, all create opportunities for your account information to fall into the wrong hands. Bank systems simply don’t have the agility to keep up with the evolving threat that cybercriminals present.
So, what the crypto and DeFi (decentralized finance) community has been asking the world for years is, “why not cut out the middle man?”
The advantages of DeFi systems for greater security and transparency
It’s less sustainable to continue to print and manufacture physical currency. Cash purchases are becoming less and less prevalent. Physical currency is harder to trace and easy to forge, making it much more possible to support the existence of black markets. While the use of wealth consistently becomes more digitized, consumers should consider which platforms best support secure digital transactions.
Decentralized financial systems that operate through blockchain technology have significantly better security than traditional banking and asset management solutions. The blockchain functions on an immutable chain of encrypted code. Its entire foundation is built upon the most advanced technology that exists. Rather than trusting piecemeal processes from old institutions that cybercriminals have already mastered, DeFi leaders like Nimbus Platform are creating market solutions that just make sense.
Nimbus is a revolutionary DeFi platform that allows users to liquidize and put their digital assets into it like never before. With 15 customizable earning strategies, the platform aims to make the crypto market more appealing to serious users and new crypto adopters.
Of course, hackers have set their sites on this new technology, but the blockchain system is so streamlined, that it’s virtually impossible for platforms or individual accounts to be hacked. This also makes auditing blockchain systems a much easier process, as there aren’t a multitude of offshoots and access points within its design.
Blockchain wallets are only accessible through private keys that are stronger than the average accepted password protocol allowed by banks and other online payment systems. Most significant transactions utilize Smart Contracts, which require specific conditions to be met before any assets are actually released.
A better protected and more traceable digital currency is the clear path forward and adoption of cryptocurrencies is increasing every day. With platforms like Nimbus and other DeFi solutions making their way into the greater financial market, it’s only a matter of time before we see a new standard in asset management.
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