Standard Wire Transfers
Let's start by examining how things have evolved over the past 150 years since the invention of wire transfers. It takes more than one step to send money utilizing the wire transfer technique through a bank. It is as follows:
The sender goes to their bank and instructs them to transfer money to an account. The sender gives the bank certain codes, such as BIC and IBAN codes, so the bank knows exactly where the money need to be moved.
By communicating with the receiver's bank over a secure system, such as Fedwire or SWIFT, the sender's bank alerts it about the need for a transfer. This message, which also includes settlement instructions, is delivered to the receiver's bank, which subsequently requests that the sender's bank transfer the stated sum.
The money is now transferred by the sender's bank. It may take a few hours to a few days for the total amount to be transferred because this is not done all at once but gradually.
The two banks must have reciprocal accounts with one another in order to conduct the transfer. If not, a correspondent bank that owns such an account is used to make the transfer.
As one can see, this method of transfer relies excessively on a middleman, takes longer than it needs to, and may be expensive because banks demand a fee for their services. A good alternative to this procedure is provided by decentralized currencies like Bitcoin.
The fact that services like Bitcoin function utilizing cryptographic protocols rather than a central mediator sets them unique from conventional services. As a result, the procedure is more quicker, easier, and more effective. While traditional systems are prone to fraud due to the required complex procedure, the system is quite visible to both end users.
There is a drawback to this, though. It is simple to track a transaction back to the establishment of each unit value using services like Bitcoin.
Solution? A Unified Ground
More and more individuals are choosing peer-to-peer mobile transfers and services like Bitcoin, where users can transfer money by sending an SMS with the assistance of a network operator. Despite the fact that they are more effective, they are still far from being widely accepted because many people still do not have bank accounts, in addition to the issue of limited user identification in such services.
A hybrid of the two would be created if banks could take advantage of the possibilities of decentralized currencies and integrate the source code of services like Ripple into their current system. This would accomplish two goals at once because:
Decentralized payment methods enable more effective transfers.
By ensuring that only users who have registered can access the service, bank systems eliminate any opportunity for fraud.
Since the last time an indigenous financial service system was launched, much has changed in the world. Undoubtedly, this traditional business needs to be improved, and decentralized currencies like Bitcoin have shown them the way.
Even though these are two distinct services and legitimate cyber security measures, each having flaws of its own, if used in tandem, they could fill in each other's deficiencies flawlessly, creating a system that once again revolutionizes the financial service system.""" - https://www.affordablecebu.com/