The BlockChain Revolution in Banking Industry
Abstract
Nowadays Bank's plays an important role in
our society. But it should upgrade more with
various modern technology and enhance more
facility. Blockchain and crypto currency truly
promising application it can enhance service.
At present customer pay a bit much for
transaction Blockchain technology can reduce
it. Banks have limitation which is one of the
major problem Blockchain and crypto
currency technology can vanish this problem.
Of this paper is to do research with the impact
of blockchain and crypto currency In bank
industry. Blockchain is digital transaction
system it can validate and verify each Block
chain technology can massive change in
banking industry. We will analysis How much
helpful this Blockchain technology is and
security, advantage, limitation problem. In this
paper we will try to explain on it.
Introduction
The Blockchain a system using the concept of
cryptographically secured chain of blocks to
store the time-stamped documents.It stored
data and each data records connected to the one
before it.It utilizes a peer-to-peer network for
timestamping and verifying each exchange. It
could be managed autonomously without
requiring a central authority. Actually
blockchain is a type of database that is a public
register for recording transactions without
needing a third-party to validate each one.The
blockchain is distributed across a peer-to-peer
(P2P) network. It is made up of data
blocks that are linked together to form a
continuous chain of immutable records.
Blockchains are best known for their crucial
role in cryptocurrency systems, such as
Bitcoin, for maintaining a secure and
decentralized record of transactions. A
blockchain is the foundation for immutable
ledgers, or records of transactions that cannot
be altered, deleted, or destroyed. This is why
blockchains are also known as a distributed
ledger technology (DLT).
Bitcoin is a decentralized peer-to-peer
electronic exchange. Breaking it down, this
means people can send money directly to one
another without a bank or third party as an
intermediary. Bitcoin was created so people
don't have to rely on government or financial
institutions to make financial transactions.
Bitcoin allows users to transact amongst
themselves using the Bitcoin blockchain.
Bitcoin was created by an anonymous person
or group using the name Satoshi Takemoto in
2009. A Bitcoin is mined by specialized
software and hardware and is created when an
increasingly difficult mathematical problem is
solved was presented as a way to transact
without using a third party. Then, in 2011,
miners and coders started to build other
networks, like Ethereum and Litecoin, and
began to improve the code behind Bitcoin's
blockchain, Bitcoin and other crypto currency
prices depend onperceivedvalue and supply
and demand. If people believe that Bitcoin is
worth a specific amount, they will pay it,
Bitcoins are created by mining software and
hardware at a specified rate. This rate splits in
half every four years, slowing down the
number of coins created. Following the laws of
supply and demand after every 210,000 blocks
mined, or roughly every four years, the block
reward given to Bitcoin miners for processing
transactions is cut in half. Down to the singledigit range. “Almost two years later, in April
2013, Bitcoin reached $200. By the end of
November, the same year, it was worth more
than $1,000. It then rose to $10,000 in
November 2017 and all the way up to its
maximum price near $68,990 in November
2021.
Literature Review
A Blockchain is a type of technology that
encourages trading partners to trust one
another. Blockchain enables cash transfers
while also providing assurance that the
transaction will be completed correctly. The
power of this revolutionary technology
underpinning Bitcoin can alter our society
financially by improving the way we store our
money and do business, making it more fair,
transparent, equitable, and free of corruption,
according to Blockchain Revolution. Assume
you wish to purchase someone's home. You're
certain you want it, but when you start the
buying procedure, the seller claims they don't
want a notary or a bank involved. Is a red flag
raised?
We rely on middlemen in today's environment
to ensure that a transaction is completed
legally. They serve a crucial purpose in that
they reassure both the seller and the buyer that
everything will be done fairly. If history
teaches us anything, it's that middlemen like
banks aren't always trustworthy. Banks can fail
and you could lose your money. Consider a
world in which we don't require a middleman,
where transactions are both trustworthy and
transparent.
Blockchain is a distributed ledger that consists
of an ever-growing collection of ordered
entries called 'blocks.' Each block includes a
date and a link to the previous block.
1Blockchains are resistant to data tampering
by definition; data in a block cannot be
modified retrospectively after it has been
recorded. As a result, blockchains are
becoming increasingly popular.
The blockchain eliminates 'trusted' recording
and documenting all transactions that take
place within the network. Proponents of the
technology referred to it as a 'transfer of
confidence in a skeptical world,' based on the
idea that participants to a transaction can be
exchanged safely without the use of a bank.
Requirement for a third-party assurance, even
if they don't know each other. Given this, we
may conclude that the strength of blockchain
technology is that it change the game. lies in
the fact that it does away with the requirement
to verify Trust worthiness and ensure money
transfers. Consider an online version of that
ledger that is secure, accurate, and updated in
real-time and is instantly accessible by many
parties. It's known as blockchain, and it's
revolutionizing global trade and finance.
The blockchain is revolutionizing transaction
speed and efficiency. While the technology is
currently in the proof-of-concept stage, it has
the potential to have positive vibes in
industries and sectors, including banking,
commerce, healthcare, insurance, and
government.
For one thing, businesses might have nearinstant global access to their funds at any time
and from any location; cash could be
constantly moving to meet a company's
working capital and liquidity requirements
anywhere in the world.
Consider an online version of that ledger that
is secure, accurate, and updated in real time,
and can be accessed by a large number of
people. Blockchain is a technology that is
transforming global trade and banking.
For one thing, firms might have near-instant
worldwide access to their funds at any time and
from any location; cash could be moving
continually to meet a company's working
capital and liquidity requirements anywhere on
the planet.
between all of the parts and the data they carry.
it seems as follows. [1]
In the financial services industry, legacy
systems and outdated practices are ubiquitous.
Due to legal and compliance constraints,
institutions in the sector are sometimes slow to
adapt to new technology and innovation.
However, the rise of Fintech companies over
the last decade has put enterprises that rely on
legacy systems that are 30 to 40 years old up
against new competitors. Acknowledged
methods that financial services organizations
are seeking to keep up is through blockchain.
Thesis paper 1 - The Blockchain Revolution
The blockchain will be secured by at least two
factors. To begin with, no one knows which
miner will update the next block. Second, the
hash value of tamper changes and no longer
matches that of the previous block. It is
possible to hack if the cheater succeeds in
creating the chain quicker than the noncheating miners. In our system, this is not
possible.
.They are implement the system of payment
system.
Thesis paper 2 – blockchain , securities markets
and central banking .They are solving the security
issue of transaction of blockchain system.
Thesis paper 3- Blockchain in Banking Industry .
They are implement the transaction Process of the
banking industry .
Thesis paper 4- The blockchain technology and its
application in financial sector . They are solving
the security Issue of the financial sector .
Thesis paper 5- The blockchain revolution 2020 in
banks and financial Institutions . They are
implement the transaction process and application
of blockchain system .
Thesis paper 6- The role of blockchain in
banking.they are taking about the transaction
process.
Thesis Paper Name
Thesis topic
The Blockchain Revolution
Payment System
blockchain,securities
markets and central banking
Security Issue
Blockchain in Banking
Industry
Transaction
process
The blockchain technology Security Issue
and its application in
financial sector[3]
Fig : Merkle Tree of bitcoin security system
Merkle tree is a tree-shaped data structure with
hashes from data blocks in the leaf vertices and
hashes from adding values in child vertices in
the inner vertices. This creates a connection
The blockchain revolution
2020 in banks and financial
Institutions
The role of blockchain in
banking
Transaction
Process and
application
Transaction
process
Recommendation
From the all the thesis paper the 5th thesis paper
name The blockchain technology and its
application in financial sector is better from the
other papers. The security issue is the most
important issue in the transaction process. The
markle tree process is the best way to secure
the transaction process. Every transaction is
identified by a hash code. Which contains the
transaction's original information. This hash
value is collected into a block. Cheaters cannot
affect the blocks because of the prior hash in
the new block. A timestamp is included in
every hash. So a cheater won't be able to hack
this in less 10 minutes. As a result, this
procedure is preferable for ensuring
transaction security. [3]
Conclusion
The goal of this thesis was to look into the
potential uses of blockchain technology in the
financial industry, as well as to emphasize the
technology's value and significance. As this
thesis points out, blockchain technology is not
limited to the virtual currency bitcoin, but may
be applied to a wide range of applications. In
fact, according to this argument, bitcoin is a
fairly terrible application of this technology
because it allows users to send money and
operate anonymously, which leads to dubious
uses (The Econ-omist, 2016b). Other uses of
blockchain technology have been introduced
throughout this thesis by referencing current
literature.
Blockchain technology can help the banking
sector in a variety of ways. When superfluous
and costly intermediaries are removed from
various processes, technology can cut costs and
boost efficiency. When fewer assets are held up
during transactions, blockchain technology
reduces risks (The Economist, 2016a). The
distributed qualities of public blockchains
improve transparency, and security is assured
when data cannot be altered with (The
Economist, 2015). Private blockchains have
recently gotten, notably in the banking industry,
because they allow you to store secret data and
restrict who has access to it (Buterin, 2015).
The effects of blockchain technology on
financial markets and the kind of applications it
could enable were the subject of this thesis.
However, there are a variety of intriguing things
to research in relation to block-chain technology.
One fascinating area of study is how blockchain
technology will affect the lives of 'ordinary
people.' One thing is certain: banking services
will become faster and less expensive, which
implies that anybody with an account or who
conducts business online will be impacted by this
technology.
This is an exciting and contemporary issue in
my perspective, however it was reduced down
for this thesis. Another important aspect is the
Distributed Ledger Group's collaboration.
One may look at the Distributed Ledger
Group's growth and developments, as well as
the possibilities that blockchain technology
has in the financial sector. Before moving to a
blockchain-based system, there are still
technical and legislative hurdles to surmount.
There is little doubt that blockchain
technology will have tremendous long-term
significance, but it will take time to realize its
full potential. "We won't get there tomorrow,
but we will get there," said Masters (2015) of
the adoption of blockchain technology in the
financial sector.
Reference:
[1] Kakavand, H., Kost De Sevres, N. and
Chilton, B., 2017. The blockchain revolution: An
analysis of regulation and technology related to
distributed ledger technologies. Available at
SSRN 2849251.
[2] Seretakis, A.L., 2019. Blockchain, securities
markets and central banking.
[3] Guo, Y. and Liang, C., 2016. Blockchain
application and outlook in the banking
industry. Financial innovation, 2(1), pp.1-12.
[4] Jutila, L., 2017. The blockchain technology and
its applications in the financial sector.
[5] Palihapitiya, T., 2020. Blockchain Revolution in
Banking Industry. University of Moratuwa, Sri
Lanka.
[6] Melnychenko, O. and Hartinger, R., 2017. Role
of blockchain technology in accounting and
auditing. European Cooperation, 9(28), pp.27-34.
[7] https://changelly.com/blog/merkle-treeexplain/