In the world of technology, everything keeps evolving with time. The evolution takes place right in front of our eyes and we get the first hand experience of it. Just when we were getting familiar with the method of money transactions through credit and Visa cards, came a brand new method that effectively serves the same purpose. The BlockChain technology. There are numerous features of the blockchain system. Unlike the conventional system, there is no central authority that regulates or monitors every transaction. Once a transaction has been made, it is added to the chain of blocks. A new block gets added after every transaction and this block can never be removed. That is why, blockchain is irreversible. Irrespective of time, once a block is added, there is now way to remove it from the blockchain. This brings us to the next feature of the blockchain. Its security.
Your data gets stored forever and it cannot be manipulated with. Each new block is linked to the previous one. This is how every transaction in the form of a block is added in the chain. There are various groups of people and communities who think otherwise and expect the blockchain system to fall in the future.
The size of the blockchain has already become an issue. With the size exceeding several gigabytes, and the chain always expanding, the size of the chain is an issue that needs to be addressed with time. Another problem that the experts talk about regarding blockchain is that in the case of any fraud, there will be no one to be blamed for the same. Since there is no central authority that regulates and monitors the transactions, it is difficult to identify the culprit for any fraud.
Transaction from the sender to the receiver takes place using cryptography. When the sender sends any data, it gets encrypted through a private key that represents his ownership over the data. At the receiver’s end , the public key is used to validate that the digital signature signed by the sender.
The entire process of decrypting the hash code and then validating the keys is a lengthy process and thus, transactions take time in a blockchain. On an average it takes about 10 minutes for a computer to decipher the code using the HASH256 technique in a bitcoin transaction. Clearly, to get the blockchain system in the mainstream, the speed of transactions is one thing that needs to be looked at.
Many international banks have already started to implement the use of blockchain in one way or the other. Barclays, for instance, has set up a research team dedicated for exploring ways in which the blockchain can positively impact the banking system. One of the key issues they identified in the early stages were identity theft and trade finance. The belief with blockchain is that it can definitely put an end to identity theft that takes place in the ongoing system. Blockchain has the ability to eliminate the hurdles of time in identification and verification (ID&V) and KYC; it is a fundamental new foundation for the sharing of information. A secure, distributed ledger can transform the speed of ID&V and help to make sense of the huge amounts of data generated by an individual or corporation.
Other banks such as Credit suisse, Canadian imperial bank, HSBC etc have also put their hands up in acknowledging the importance and benefits of blockchain in the banking ecosystem. Technology is all about innovation and improvement. Blockchain is the new item in that list and it is here to stay. More and more industries have started implementing blockchain to overcome the issues with the current system. The outcomes have been pretty satisfying so far with a long way to go yet.