Emergence of Blockchain in the finance world

This PPT is on Blockchain. The reader will get to know how banking and financial institutions transformed using the technology.

1. BLOCKCHAIN Presentation By: Payal Kedia

2. CONTENT MEANING OF BLOCKCHAIN COMPONENTS OF BLOCKCHAIN HISTORY OF BLOCKCHAIN TECHNOLOGY HOW A BLOCKCHAIN WORKS FEATURES OF BLOCKCHAIN INDUSTRIES REVOLUTIONIZED BY BLOCKCHAIN TECHNOLOGY DISRUPTED BY BLOCKCHAIN PILLARS OF BLOCKCHAIN TECHNOLOGY HOW COULD THE FINANCIAL AND BANKING INDUSTRY HELP FROM BLOCKCHAIN TECHNOLOGY? BANKS AND FINANCIAL INSTITUTIONS USING BLOCKCHAIN TECHNOLOGY ADVANTAGES AND DISADVANTAGES REFERENCES

3. MEANING OF BLOCKCHAIN Blockchain technology is a decentralised , distributed, and public ledger that is used to record transactions across many computers within a network. Because of its design and properties, blockchain is secure, transparent, and nearly impossible to alter. A blockchain is a database that stores encrypted blocks of data then chains them together to form a chronological single-source-of-truth for the data.

4. COMPONENTS OF BLOCKCHAIN 1. Blocks - Every chain consists of multiple blocks and each block has three basic elements: The   data   in the block . A 32-bit whole number called a  nonce.   The nonce is randomly generated when a block is created, which then generates a block header hash.  The   hash  Is a 256-bit number wedded to the nonce. It must start with a huge number of zeroes (i.e., Be extremely small). 2. Miners - Miners create new blocks on the chain through a process called mining. 3. NODES - Nodes can be any kind of electronic device that maintains copies of the blockchain and keeps the network functioning. 

5. HISTORY OF BLOCKCHAIN TECHNOLOGY 2008 : Satoshi nakamoto publishes “ bitcoin: A peer to peer electronic cash system . " 2009 : The first successful bitcoin (BTC) transaction occurs between computer scientist hal finney and the mysterious satoshi nakamoto . 2011 : Electronic frontier foundation, wikileaks and other organizations start accepting bitcoin as donations. 2014 : Gaming company zynga , the D las vegas hotel and overstock.Com all start accepting bitcoin as payment. R3, a group of over 200 blockchain firms, is formed to discover new ways blockchain can be implemented in technology. 2015 : NASDAQ and san- francisco blockchain company team up to test the technology for trading shares in private companies.

6. HISTORY OF BLOCKCHAIN TECHNOLOGY 2017 : Bitcoin reaches $1,000/BTC for first time. JP morgan CEO jamie dimon says he believes in blockchain as a future technology, giving the ledger system a vote-of-confidence from wall street. 2018 : Facebook commits to starting a blockchain group and also hints at the possibility of creating its own cryptocurrency . IBM develops a blockchain -based banking platform with large banks like citi and barclays signing on. 2019 : China’s president ji xinping publicly embraces blockchain as china’s central bank announces it is working on its own cryptocurrency 2020 : Bitcoin almost reaches $30,000 by the end of 2020. Paypal announces it will allow users to buy, sell and hold cryptocurrencies . Blockchain becomes a key player in the fight against COVID-19, mainly for securely storing medical research data and patient information

7. HOW A BLOCKCHAIN WORKS

8. FEATURES OF BLOCKCHAIN IMMUTABILITY - Immutability means something that can’t be changed or altered. Every node on the system has a copy of the digital ledger. To add a transaction every node needs to check its validity. If the majority thinks it’s valid, then it’s added to the ledger. This promotes transparency and makes it corruption-proof. Decentralized - The network is decentralized meaning it doesn’t have any governing authority or a single person looking after the framework. Rather a group of nodes maintains the network making it decentralized. Enhanced Security - As it eliminates rid of the need for a central authority, no one can just simply change any characteristics of the network for their benefit. ALSO using encryption ensures another layer of security for the system.

9. FEATURES OF BLOCKCHAIN Distributed Ledgers - The ledger on the network is maintained by all other users on the system. This distributed computational power across the computers to ensure a better outcome. CONSENSUS - The consensus is a decision-making process for the group of nodes active on the network. Every blockchain thrives because of the consensus algorithms. The architecture is cleverly designed, and consensus algorithms are at the core of this architecture. Every blockchain has a consensus to help the network make decisions. faster settlement - Blockchain offers a faster settlement compared to traditional banking systems. This way a user can transfer money relatively faster, which saves a lot of time in the long run.

10. TECHNOLOGY DISRUPTED BY BLOCKCHAIN 1. Artificial Intelligence (AI) : Blockchain technology is proving to be the powerhouse of the artificial intelligence world. The technology, through its  merger with AI , is introducing a set of opportunities that can enhance the overall experience. 2. ARCONA AND VERSES (AR/VR) : Blockchain economy is also promising to be the missing link in the AR/VR market. The technology in helping in mitigating common challenges, such as the inability to distinguish between a digital photo and its copy. 3. Internet of Things (IoT) : Blockchain technology comes with a fundamental design that can gear up a higher number of transactions and interactions – something that is a necessity in the iot ecosystem.  For example, blockchain will enable businesses to keep track of the history of every connected device which will ease the troubleshooting process.

11. TECHNOLOGY DISRUPTED BY BLOCKCHAIN 4. Big Data : The technology will introduce efficient solutions to the prevailing challenges in the big data environment.  5. 5G Technology : 5G – The technology that is expected to bring a drastic  impact on mobile apps – will also turn towards blockchain for unleashing new potential and delivering better experience. 6. Cloud Computing : The technology will break down the consumer data into small chunks and add an extra layer of security on them with the help of hashing function and public/private key encryption. These data chunks will be later stored in decentralized locations, which will make it easier to protect data from intruders.

12. PILLARS OF BLOCKCHAIN TECHNOLOGY Decentralization : Decentralization is necessary to cut costs (middlemen) and to build trust.  It means there is no central agency or authority to administer or govern. Security : It is the most secure of all the networks available today. Here data are connected to each other via blocks. Without it, the technology would be unusable. Scalability : It means it can maintain a huge number of operations in a smooth manner. For example, A traditional bank has sacrificed all decentralization - but still keeps its client's funds relatively safe.

13. How could the Financial and Banking Industry help from Blockchain technology? Fraud Detection  - The applied blockchain in banking system is maintained decentralized data, which helps to prevent hacking by hackers and cyber-criminals, and for before banking, there is possible to bypass these protection systems and make an information leakage by well informed of emerging digital technology. Faster Payments  – User can send and receive payments in the form of digital money called bitcoin and cryptocurrencies, this process can be done with the help of internet connection instantly within minutes of times for 100% confirmed transaction. These transactions are unlimited, safe and mostly secret. Smart Contracts – The use of smart contracts in financial transactions could advance up and analyze processes, secure the proper transfer of data and implement the duties of all parties.

14. How could the Financial and Banking Industry help from Blockchain technology? Trade Finance - Trade finance viewed as the most helpful utilization of blockchain technology in the banking division. All the connected parties such as a compound transaction can combined with a blockchain interface, and the data can distribute by buyers, sellers, and banks with the single distributed ledger. Loans and Credit – Blockchain can apply for loans and credits in two diverse ways. The primary use of a blockchain in the lending business is that – a lender can verify the creditworthiness of a potential user by a blockchain. To solve the problem of hacking while verifying the data, companies can use blockchain to avail the validation data.

15. BANKS AND FINANCIAL INSTITUTIONS USING BLOCKCHAIN TECHNOLOGY Banco Santander; Barclays; UBS, the Swiss investment bank; Citibank; Deutsche Bank; Commonwealth Bank of Australia; DBS Bank.

16. ADVANTAGES OF BLOCKCHAIN ACCURACY OF CHAIN - transactions on the blockchain network are approved by a network of thousands of computers. This removes almost all human involvement in the verification process, resulting in less human error and an accurate record of information. COST REDUCTION -  blockchain eliminates the need for third-party verification and, with it, their associated costs. TRANSPARENCY - most blockchains are entirely open-source software. This means that anyone and everyone can view its code. This gives auditors the ability to review cryptocurrencies like bitcoin for security.

17. ADVANTAGES OF BLOCKCHAIN SECURE TRANSACTIONS - Once a transaction is recorded, its authenticity must be verified by the blockchain network. Thousands of computers on the blockchain rush to confirm that the details of the purchase are correct. DECENTRALIZATION - Blockchain does not store any of its information in a central location. Instead, the blockchain is copied and spread across a network of computers. Whenever a new block is added to the blockchain, every computer on the network updates its blockchain to reflect the change. 

18. DISADVANTAGES OF BLOCKCHAIN ILLEGAL ACTIVITY - While confidentiality on the blockchain network protects users from hacks and preserves privacy, it also allows for illegal trading and activity on the blockchain network.  TECHNOLOGY COST - Although blockchain can save users money on transaction fees, the technology is far from free. The “proof of work” system that bitcoin uses to validate transactions, for example, consumes vast amounts of computational power. REGULATION - Many in the crypto space have expressed concerns about government regulation over cryptocurrencies. While it is getting increasingly difficult and near impossible to end something like bitcoin as its decentralized network grows, governments could theoretically make it illegal to own cryptocurrencies or participate in their networks .

19. REFERENCES https://appinventiv.com/blog/real-impact-of-blockchain-technology-on-economy/ https://www.fusioninformatics.com/blog/blockchain-technology-in-banking-and-finance/ https://101blockchains.com/introduction-to-blockchain-features/ https://builtin.com/blockchain

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