Everyone now knows what a Smartphone is, and many understand the impact of technologies such as mobile and social on their businesses. New concept of blockchain, which financial professionals are just beginning to understand. For example, let's assume you have a child who goes to college and spends your living expenses every month.
There are many methods of remittance, but the most common method is to transfer money from your bank account to your child's bank account. The transaction records a debit in your bank account and a credit in your child's bank account.
Usually, neither you nor your child sees each other's bank records. Imagine a block with transaction information (date, time, amount, etc.) engraved on each monthly remittance. Both you and your child can view this block to confirm the transfer and receipt. It's unlikely that a poorly-funded child would come in the next week and complain that the bank made a mistake and the money wasn't sent.
The blocks and chains record all transactions with this child who will eventually graduate from college. As you grow older and decline, you could show your child this chain to show how much money they spent in college and ask them to spend a similar amount on a quality nursing home.
This is the rough mechanism of blockchain. Each block is a record of financial transactions, and the chain is a shared accounting ledger, visible to all parties, or nodes, across multiple networks. Each new transaction will be validated by all nodes and, if valid, added to all copies of the ledger. That is, a new block will be added to the chain.
Since the chain is secured by encryption, no one can change the record after the bookkeeping. Even if one finds a way around the cryptography, it's nearly impossible to change the block without anyone knowing, since the record is visible to all parties. At best, it only adds new blocks.
Impact on financial structure
The modern financial structure evolved from Venetian traders of the 15th century and Dutch stock exchanges of the 17th century. Double-entry bookkeeping has been used for such a very early period, and has shaped the system underlying the modern financial world.
The concept of all types of exchanges and transactions, such as funds, commodities, stocks and loans, requires each party to keep track of all transactions using his or her ledger.
In most cases, this method works very well. However, at times, multiple ledgers may become inconsistent, leading to increased auditing, distrust, and oversight.
A feature of blockchain is that all parties use the same ledger and all parties can see it. If there is only one ledger, it cannot happen that they do not match.
This new financial record approach offers many benefits, including:
● Improving transaction credibility: All parties can see all blocks in the chain, making it easier to ensure the fairness of any transaction. It is difficult to carry out illegal transactions under the eyes of the public. Through Bitcoinup you can get profit in bitcoin trading
● Decrease in fraud: Similarly, concealing, fraudulent transmission, and erasure of financial and other transactions can be very difficult if not impossible.
● Reduced risk-related lack of ethics: Increased credibility and reduced fraud reduce corporate risk. Evaluating contracts and transactions makes it easier to spot moral hazards, or lack of ethics.
● reduced transaction costs and reduced processing time: The number of systems and organizational infrastructures are reduced, which simplifies and speeds up the entire transaction process and reduces costs.
It is Bitcoin that is demonstrating how blockchain work globally and is rapidly evoking interest in blockchain, especially in the financial services industry such as banks and credit card payment providers.
If works of art and historical relics, non-profit banking for regions and people not covered by traditional banks, and time. There is also the process automation of general back office work that takes a lot of time.
Both financial and technology organizations have just begun a closer look at blockchain and future applications. Even in this early stage, there is the potential to increase efficiency, transparency, trust, and reduce risk, cost, and complexity.