What effect do digital currencies and blockchain technology have on the traditional banking system? How can countries regulate these new financial technologies to balance innovation and consumer protection?
Blockchain technology is a distributed database that's resistant to tampering, allowing users to create secure transactions. It operates on the premise of "peer-to-peer" networks without any central authority or server. The use of this technology allows for more transparent transaction processing as well as greater security for both parties involved in a transaction. Digital currency like Bitcoin are also decentralized cryptocurrency systems which operate using cryptography instead of physical banks and therefore eliminate the need for third-party involvement. This has led some governments to consider how they should treat cryptocurrencies such as bitcoin, with many regulating them while others don't.