Assessment of Blockchain Technology Research Paper

Assessment of Blockchain Technology Research Paper

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Assessment of Blockchain Technology Research Paper

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Introduction

Blockchain has revolutionized the financial sector by developing transactional methods with a high degree of transparency. The sophisticated protection layer of blockchain technology provides the main factor behind the widespread use of this technology.

They are leading financial institutions and banks to keep abreast of the latest technological developments in the financial sector. There is no doubt that monetary transactions are considered to be one of the most important applications of blockchain technology.

As it is characterized by the high speeds of transferring funds across borders from one place to another in a few moments, with the advantage of fees and transfer costs less than the current situation. Still, the most distinctive aspect revolves around that blockchain technology.

You do not need data centralization, which is the case in remote areas and countries where formal banking services still exist. From jumping directly to blockchain-based solutions, which makes those countries save the enormous costs of starting a new infrastructure.

Security features of blockchain

Blockchain is secure since the manipulation of data in the platform is hard since information is stored in millions of copies. This feature makes the transactions secure even though data stored in the blockchain is not private since any user can access it.

The other security feature about by blockchain, is that, even though a person may have access to the data of transaction stored on the blockchain, he or she cannot identify the user’s making transactions. This feature alone makes it secure to store your transaction information on the blockchain.

There is also another security feature of testing the computers that want to use blockchain, and it requires the users to identify themselves before using it. And many, at times, solving the mathematical problems in the tests is hard, and this discourages hackers and malicious internet users such as frauds and many others. The transactions are more transparent and accurate, and this reduces the chances of fraud or even hackers.

The availability of the feature of testing the eligibility of the users has impacted the financial institutions positively, and they can know to whom the transaction has been made to and there is no chance of manipulation of the data since it’s secure, [1].

Contributions of blockchain to finance

Many financial institutions have realized the kind of services blockchain offers, and the main that attracts them is the absence of transaction fees when processing the transactions. This feature is because blockchain handles transactions on its own and does not involve a third party in treating them.

This feature has also attracted many investors, and now more people have accepted the use of digital currency. Many companies also have been attracted to the use of blockchain since of the fact that there is no transaction cost in processing of transactions made through this technology.

The feature of smart contracts in the blockchain technology has impacted the financial sector positively since it allows commercial transactions and agreements to process immediately, [1]. This feature does not need transaction fees and thus many banks and businesses have realized the potential of blockchain and its development over the years.

Blockchain technology has changed the way insurance policies are offered and acquire, and this is mainly contributed by the availability of the smart contract feature. It has made it easier for any insurance company to settle the files that are not claimed. It has also made more comfortable the process of claiming settlements and even filling of the claims.

Blockchain has also impacted the financial sector positively since it has enabled companies, especially financial institutions, to track their customers since their details are permanently stored accurately [2]. This feature also enables information sharing between parties that participate in the blockchain.

The financial institutions can find out which customers have better credit scores and which one don’t, this enables participating financial institutions to give loans to the eligible customers and deny those that are not, and this reduces losses.

The blockchain has also enabled financial institutions to engage in collaborative security measures within the financial sector. They join forces in fighting fraud and corruption within the institutions. They also share data of clients or customers that are suspected of engaging in criminal activities that may impact them negatively, leading to losses.

The blockchain has not only impacted the financial sector alone but also the environment, health, economics, and many others. For example, in the health sector, health insurance companies can keep track of their financial transactions and also keep records and path of their customers or clients.

It has also impacted the economics sector positively since countries and nations can keep track of their transactions and also be able to eliminate corruption in their economic ministries leading to the development of economies.

The blockchain has also offered several solutions to the financial climate. It has enhanced the rewarding systems and massive funding towards the climate change finance sector. The environmental conservation programs can keep track of their large or massive transactions and also do them in a secure network.

It has enhanced transparency to these institutions and helped in getting rid of corruption and adherence to their financial policies [3].

Countries such as Singapore and Dubai have collaborated to use blockchain in their future transactions; this is according to the summit held in September 2018. The government of UAE also has made plans to make Dubai become the first city to be run entirely through blockchain, and also the government transactions are made being made through blockchain. Same case goes to Singapore.

For the coming years, it is predicted that blockchain will be the main financial transaction platform. It will also be used to control investments and all banking services. Even though it is said to be secured, there arise some questions about whether decentralization of information and data is the best strategy towards controlling of fraud and its eventual elimination.

As the technology keeps on developing the more questions arise, both ethical and technical. These questions can only be answered when the security of technology is one hundred percent assured.

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References:

1. Reiff N. (2020). Blockchain explained. Retrieved from https://www.investopedia.com 
2. Polyviou A. et al. (Oct, 25, 2019). Blockchain technology: Financial sector applications beyond cryptocurrencies.
3. Neves L. and Prata G. (Sep, 2018). Blockchain contributions for the climate finance. Pdf retrieved from https://www.bibliotecadigital.fgv.br.com 
4. Futuristic creative. (Jan 24, 2020). Inside Dubai’s quest to be the first blockchain-powered city. Retrieved from https://www.futurism.com 
5. How blockchain has revolutionized the finance sector.https://all-stocks.net/how-blockchain-has-revolutionized-the-finance-sector/ 
6. In Lee, D. (2018). Handbook of blockchain, digital finance, and inclusion: Volume 1.
7. In Li, K.-C., In Chen, X., In Jiang, H., & In Bertino, E. (2020). Essentials of blockchain technology.
8. Kim, S., & Deka, G. C. (2020). Advanced applications of blockchain technology. Singapore: Springer.
9. Singapore and Dubai strengthen fintech ties, to collaborate on blockchain and big data. Retrieved from https://www.futureblockchainsummit.com 
10. Tiwari A. (Nov 6, 2019). The impact of blockchain technology on financial services. Retrieved from https://customerthink.com 

11. Xu M. et al. (2019). A systematic review of blockchain.

Assessment of Blockchain Technology Research Paper

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