Blockchain Technology- Revolutionizing banking system

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The traditional banking system has been serving and taking over after it champion other forms of banking, but in 2008 a light penetrate and shine in the world. Satoshi Nakamoto published a white paper with the title a peer-to-peer electronic cash system. This white paper outline the concept of a decentralized digital currency and the underlying technology which is blockchain technology.
After the end of 2008, in 2009 the first blockchain came into play as a public ledger for recording all bitcoin transactions. It is true that the identity of this person or group of persons known as Satoshi Nakamota who worked and built the blockchain technology remained unknown still date. But their amazing work has a great impact in the financial industry and in other industry as well. Their work has build the world and is taking the world to a more brighter space.

Now let's talk about what a blockchain technology is.

What is Blockchain Technology?

Blockchain technology is a decentralized and distributed digital ledger system that takes notes of transactions and record them in a secure way across multiple computers. This blockchain is made up with individual blocks with each block containing a set of transactions or information.
Blockchain stores data or information in a transparent way which help ensure the security and the immutability of the network.
With the help of cryptographic references blockchain can store information in a secure way which can be hard to alter without altering the subsequent blocks. This has so much protected all the data which are stored on a blockchain.
The potential of blockchain technology lies in the way it creates secure tamper-resistant and transparent records which can be transfer in various industries.

Let us talk about the two main types of blockchain.

1. Public blockchain: This is a type of blockchain that is open to the general public, and anyone who desire to join can freely participate. There are some features that makes it unique like, being decentralized which means that no central body controls it instead each individual has control over his or her own data. Another thing is that because it is an open blockchain all data and transactions are being recorded on public ledger which makes it visible to everyone.
   Security is another unique feature it possesses. Open blockchain uses consensus mechanisms like delegated proof of stake, proof of work (PoW), and proof on stake(PoS) to prevent Intruders and fraudster from their harmful activities and to secure transactions.
   Public blockchain are open to all individuals with an internet connection. they are mostly used for cryptocurrency. Not only that, but they also have the potential for various applications that work by young finance like decentralized applications (Dapps).

2. Private Blockchain: Unlike the public blockchain this type of blockchain is not open to the general public. This blockchain has some restrictions and participants are being controlled. Before anyone can come into this type of blockchain the entity controlling the blockchain has to grant permissions. This has made it possible for more governance on the blockchain. Talking about privacy it is totally different from that of the public blockchain where transaction are visible, but here transactions are invisible to the general public but are being held by the network owner who define who can assess what information.
   The private blockchain uses a consensus mechanism like proof of authority or practical Byzantine fault tolerance to secure transactions.
   Private blockchains are said to be more secure. They are being used by organisations and consortia for such purposes as financial services, healthcare, voting system and supply chain management.

Banks are centralised financial institutions which offer financial services.

Now let's talk about some areas where our traditional banking system has failed.

. Centralization: This is one thing that is drawing our banking system down. Being centralised means that all transactions comes to a central body and then are being verified before sending it to it destination. Most times this slow down transactions and increases costs.

. Risk of Fraud: Despite all the security measures put in place, banks has been experiencing high rate of fraudulent activities which has been enduring loss both on banks and customers.

. High Transaction Fees: Banks today have been living on the fees they collect from customers. This can be painful and also seems like a burden to customers especially those living with low income.

. Limited Accessibility: due to fewer infrastructures put in place it has been very difficult for many to access the bank services especially those living in villages and where there are no bank infrastructure.

Blockchain technology has solved a lot of Banks failure, let's talk about some of them.

. Decentralization: Most blockchain networks are highly decentralized making it possible for everyone to completely have control over their data. Being decentralized make it possible for transactions to be processed peer-to-peer without the need of a central body.
Being decentralized has enhance the security of blockchain technology.

. *Use of Consensus Mechanism: This has made it possible for multiple participants to agree on a transaction before it is added to the block. Through this way it has been very difficult for fraudsters to alter or forge transactions with the consensus on the network.

In conclusion banks has been of great benefit to us for the service reder to us
Blockchain technology is reshaping the way the world's financial system works. It is really leading us to a more secure, transparent, and decentralized financial world.

Posted Using LeoFinance Alpha