Banking Everywhere

From our ancestors exchanging livestock tens of thousands of years ago to the brokers trading stocks on Wall Street today, bartering is a foundational aspect of human society. Throughout history, we have traded what we have for what we need, and through these transactions, we have survived.

As we made the transition from trading in cattle and grains to dollars and cents, we started relying more and more heavily on financial institutions such as banks, investment firms, and lenders to help us manage our assets. As of 2015, 93 percent of U.S. households had at least one checking or savings account, and that’s not including the millions of people who also have mortgages, credit cards, or other ties to the finance industry.

For decades, nearly every aspect of our lives has involved a third-party financial institution in some way, but despite their ubiquity, these institutions are fundamentally flawed. Unexpected fees and slow transaction times can regularly leave users frustrated, but even those problems are relatively benign compared to other, more foundational issues.

The Blockchain

A blockchain is a distributed digital ledger, which means it doesn’t have one centralized authority verifying and recording transactions (like a bank or a brokerage does). Instead, when two parties want to trade blockchain assets (better known as cryptocurrencies), the request is sent out to a network of computers. These “nodes” individually verify and record the transaction on their identical copy of the ledger, and a group of these transactions will become one timestamped block on the blockchain.