Over the past decade, the Internet and software have made the transaction of money practical. You can easily shop online and trade securities. But transferred financial assets go through correspondent banks, archaic systems linking clearing houses, and central depositories. Sometimes it takes many days for the funds to reach an account or purse to settle. Not only are these systems slow, but they are expensive and unsafe. Blockchain development is addressing this problem by restructuring fundamental business transactions, including money market transactions, and introducing new forms of digital interaction.
What is BlockChain?
Blockchain is popularly known as the underlying technology behind Bitcoin. It uses a network of peer-to-peer computers to validate transactions. Blockchain is a data structure for creating and sharing distributed registers of transactions between a computer network. It allows users to make and verify transactions immediately without central authority.
Currently, the use of blockchain development technology is predominant in the financial and banking sector. Some remarkable examples are:
- Deutsche Bank: Exploration of blockchain use cases in currency settlement, transaction processing, derivative contracts etc.
- US Federal Reserve: Development of a digital cash system using blockchain with the help of IBM
- Barclays Bank: operates dedicated laboratories in London for Bitcoin and Blockchain entrepreneurs, coders and businesses.
- Citigroup: implementation of a ledger technology distributed using blockchain and a test currency called “citicoin”.
- NASDAQ: By using Nasdaq Financial Framework, it has opened its blockchain services to more than 100 of its market operator clients.
Private vs Public BlockChains
In a private blockchain, write permissions are centralised in an organisation. In this system, access and permissions are tightly controlled and modification rights are limited to the central authority. This could be a concept with huge interest from FIs and large companies. A proprietary system based on a private blockchain will reduce the transaction cost and increase the efficiency of validation.
- Eris Industries – Multi-network blockchain client provider. It is a blockchain design that is stable, intelligent and based on a validation contract.
- Blockstack – Developers can use the blockstack.js APIs to authenticate the user, retrieve and store application data.
- MultiChain – Provides an open source distributed database for financial transactions.
- Chain Inc. – Similar to Multichain, it’s an enterprise blockchain infrastructure that allows organizations to build better financial services from scratch.
A public blockchain, a fully decentralized platform where anyone can read and send transactions. Valid transactions are included in the ledger. Public blockchains are secured by cryptoeconomics, a combination of economic incentives and cryptographic verification. The degree of influence in the consensus process is proportional to the amount of economic resources contributed to the system.
- Ethereum – It is a provider of a decentralized platform and programming language that helps execute smart contracts and allows developers to publish distributed applications.
- Blockstream – Provider of blockchain technology, focused on extending the capabilities of cryptography and distributed systems. Their vision is to form an ecosystem to solve problems in financial systems related to fraud, counterfeiting, liability and transparency.
- Factom – Developed an underlying blockchain data infrastructure for an open source platform called Factom technology.