By FintechNews staff
-Blockchain introduced radical, innovative trends that imposed a formidable impact on almost all industries, including finance, supply chain management, and healthcare. Now, almost every modern enterprise is looking for opportunities with blockchain technology.
-For financial service companies, this technology could be a path to faster and cheaper transactions, automated contracts, and greater security.
-Financial services all over the world still follow the traditional, centralized, and multi-layered approach to their operations. Financial data lies largely in centralized databases and has to pass through multiple intermediaries. On the other hand, databases with the maximum levels of protection are vulnerable to hacking and data breaches.
-Immutability: Decentralized blockchains are immutable, which means that the data entered is irreversible. Once you have written blocks and added them to the blockchain, they are not subject to any modifications. Immutability provides a wide range of massive benefits with implementation in regular business transactions. Basically, blockchain ledgers can serve as trusted information sources. Such a record could be a list of transactions (such as with a cryptocurrency), but it also is possible for a blockchain to hold a variety of other information like legal contracts, state identifications, or a company’s product inventory.
-Decentralization: Blockchain technology enables the distribution of a digital ledger to various nodes. As a result, there is no need for a singular third party to process and store transaction data. So, the application of blockchain in finance functions can prevent the possibilities for hacking transaction data due to the lack of a central repository for storing transaction data with a singular security system.
-Privacy and Security: A key aspect of privacy in blockchains is the use of private and public keys. Blockchain systems use asymmetric cryptography to secure transactions between users. These keys are random strings of numbers and are cryptographically related. It is mathematically impossible for a user to guess another user’s private key from their public key. The public key is accessible for all users on the network, and the private key is accessible only to the stakeholders in a transaction. Therefore, the users in a network can view the transaction, and the transaction details will be visible only to participants. As a result, blockchain can maintain transparency in the financial system while safeguarding confidential financial information of stakeholders in transactions.