The blockchain is a peer-to-peer network of connected nodes, or blocks, linked together by cryptography. It is the technology that powers cryptocurrencies like Bitcoin and Ethereum. Every transaction in this ledger is validated and protected against fraud by the owner’s digital signature, which also serves to authenticate the transaction. It is very secure and decentralized. Blockchain features ensure that any copy of the data is always accessible, verifiable, and trusted.
Blockchain is one of the biggest technological breakthroughs since the internet, and it has the potential to improve many aspects of daily life, including healthcare. For example, blockchain can be used by government agencies that handle sensitive personal health information to keep that information on a secure network and enable communication between the civilian population and health care providers. Another aspect would be identity management and verification. Organizing this data into nodes on a blockchain increases the security, speed and accuracy of these procedures.
However, one thing that could really do with an overhaul and improvement is the US pension system. Poor management, limited mobility, a lack of trust, an excessive number of stakeholders and a lack of transparency are just some of the problems that threaten the ability of a significant part of the population to live peacefully in retirement. . The problems are countless; However, consider an important part: 401(k) retirement savings accounts.
Blockchain could change the way the United States handles 401(k)s. First, having everything stored in one easy-to-access place would give people a clearer picture of their retirement assets and perhaps encourage them to invest more. In the United States today, it is essentially up to employees to keep track of their past contributions. There is no pension database that keeps track of the total amount paid by workers or anyone who takes care of making sure retirement savings move to where the employee goes . Currently, the individual must rely on filling out and filing complex forms and maintaining their own records for decades. A blockchain-based system would instead allow employees to have all retirement accounts in one easy-to-access place.
Add to that the current lack of trust in the financial institutions that manage pension plans due to a lack of transparency. A decentralized shared ledger could perhaps help remedy this problem. A better-informed population would also be more likely to make smarter investment decisions, driving economic growth not just for itself, but for markets as a whole. Additionally, integrating blockchain into this system would result in faster turnaround times and potentially lower transaction costs, thereby improving service delivery, as blockchain does not require a third-party intermediary to validate transactions. transactions. Finally, blockchain technology is more difficult to hack. Information on the blockchain network resides in a shared database that exists on millions of computers rather than in a central location. This decentralized structure makes it harder for anyone to break into the network and steal data or funds.
In sum, blockchain has the potential to significantly disrupt the US retirement system in a positive way. As it stands, blockchain still has a few hurdles to overcome before it gets ready for the mainstream. One of them, if not the most important, is the absence of government policy. Adequate and appropriate government regulation would create an incentive for investments in blockchain technology and also build trust around it, thereby facilitating its widespread adoption. Like everything, it will thrive in a favorable political climate, a business ecosystem ready to take advantage of new opportunities created by technology, and an appropriate industry mix.
This article was submitted by an external contributor and may not represent the views and opinions of Benzinga.