April 18th, 2018
Bitcoin may sound controversial to some, but it is a new technology that has grabbed the attention of people from around the world. What’s more interesting, is the infrastructure which underpins Bitcoin could turn out to be of bigger use in the banking sector than previously thought. This digital currency concept was first introduced in the market back in 2009, over the years its popularity has reached new heights. One thing that is becoming clear is that this currency is highly volatile and its value will continue to crash and soar. The database technology underlying the digital currency was successful in garnering the attention of researchers and scientists from different places.
Similar to a digital ledger, blockchain technology indexes, and records each movement of digital currencies, thus creating a searchable database of all transactions ever made. Unlike traditional ledgers that record information on a central server, blockchain technology stores transaction dates over a vast network of computers. All of this data is constantly verified and checked with each other. This unique process helps in keeping or storing information securely for all financial firms and individuals.
Lately, there have been many such instances where security breaches took place. Just in the last year, a group of an unidentified hackers successfully compromised servers of a popular bank and stole over $100 million. There was also another case with Tesco Bank, where cyber attacks siphoned money from around 20,000 current accounts. Every person puts a high amount of trust on banks or financial institutes that they use, such cyber-security breaches can be devastating on part of the groups or institutes. Compared to it, blockchain technology is considered to be far advanced and it can also provide a whole new level of security, thereby ensuring fast and easy processing.
When financial information is stored across a network of computers the task of compromising data turns out to be quite difficult for hackers. With Blockchain technology, hackers have to breach majority of the networks in order to steal information, not like traditional banking systems where you can get information by hacking one server. In this case, hacking is extremely difficult for even the most accomplished and experienced cybercriminals. It’s practically impossible to falsify records on the blockchain, to do so hackers would have to breach every node simultaneously.
The high level of security features that come with blockchain technology, make it attractive for financial institutes around the world. Researchers have already started finding out ways to implement this new technology and experts believe that blockchain technology will be used for traditional banking systems in the future. The World Economic Forums anticipates that by the year 2025, 10% of the domestic product will be stored on some type of distributed ledger. Already many regulators, financial exchanges, and banks are researching ways to adapt to this technology to securely record data on property deeds, as well as, stocks and bonds. With such a wide range of applications, blockchain technology comes with tremendous potential for the future.
A New Opportunity For Banks And Financial Institutes
Currently, the financial services or banking sector is dominated by computer systems that are difficult to maintain or even inefficient-considering the risks. With blockchain technology, there are many new possibilities that will help banks or financial institutes to manage every aspect of their business more efficiently and securely. Using the latest blockchain technology businesses around the world can innovate new financial solutions for consumers and provide a new range of services.