Blockchain – Technology behind Bit coin

  • Blockchain is the technology behind web-based cryptocurrency bitcoin. Cyrptocurrencies such as bitcoin have been making a lot of buzz over the last few years
  • The underlying blockchain technology emerged from the shadows of cryptocurrencies only at the beginning of last year

What is blockchain

  • Blockchain, maintained by a network of distributed independent communicating devices, offers a single source of truth for financial and non-financial transactions without any trusted central authority.
  • The fact that blockchain’s distributed database is verified by a network of nodes and continuously grows based on the previous data records, makes it very hard to be tampered with.151103-blockchain-bitcoin-technology-banking-fintech-FT
  • It holds significant promise in helping financial services organizations minimize counterparty risks, speed up settlements, improve contractual performance, and enhance regulatory reporting.
  • Blockchain is increasingly drawing attention around the world for building new work processes to make transactions and digital interactions more secure, transparent, efficient and cost-effective, thereby delivering superior experience to customers.

Applications of blockchain

  • The basic premise of blockchain is that it decentralizes the age-old centralized trust-based system.
  • Cryptocurrencies such as bitcoin form just one of the various applications of blockchain to have emerged first.
  • Any asset transaction between counterparties is a good candidate for blockchain application, as such transactions typically involve record-keeping, reconciliation and reporting.
  • Blockchain offers many use cases in financial institutions, particularly in improving existing processes and reducing the time and risk involved in transactions.
  • The technology is continuously evolving and various combinations of platforms, programs and protocols are at play today.
  • Some areas with application are
  1. Smart contracts — computer protocols that facilitate, verify, or enforce the negotiation or performance of a contract, or obviate the need for a contractual clause and P2P transactions where senders and receivers can directly send and receive data over a network and where multiple users can connect and share files.
  2.  blockchain and cryptocurrency accelerators in the areas of P2P payments, asset trading, document storage, identity management, and lending, merchant and other financial transactions.
  3. Cross-border payment and remittances, post-trade settlement, syndicated loans, and trade finance are some of the other areas that many financial services firms are exploring worldwide.the-capabilities-of-the-blockchain
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