Blockchain technology is a distributed ledger technology known for starting the digital currency bitcoin which is currently the next big thing in the Digital Era. It is also viewed as the future for financial services infrastructure. It enables the cryptocurrency which is decentralized, digital currencies that are capable of handling highly secure transactions. Satoshi Nakamoto (Pseudonymous developers) introduced bitcoins (a currency which used no paper or metal rather only certain coding) to the world in the year 2009 which currently has a market capitalization of around $10.5 billion.
Cryptocurrency faces many major challenges- 1. How to create and maintain scarcity of the currency. 2. How to avoid being dependent on the centralized entity.
Banks and Blockchain:
A blockchain is capable of showing you the origin and source of every transaction- a service which is currently provided to the banks by some the set of the back-office system. With blockchain technology, the financial institution does not have to act as a third party to the financial transaction as the blockchains can easily start the transaction without the central authority. Smart contracts that are stored on the blockchains are self-executing which cannot be controlled by anybody giving the minimum possible to hack it hence they can be counted as a trustworthy technology. IoT devices have a lot more improved features and more powerful processing system and a huge amount of memory space which allows them to store and execute smart contracts.
With all these advantages and transparency included in Blockchain technology, all banking systems from around the globe are increasingly considering to adopt blockchain technology. Accordingly, Bank of America is also considering to replace parts of the data-sharing system with Blockchain according to a patent application published on 12th April (Thursday).
According to the patent document which was first filled in year 2016 and published by the US Patent and Trademark Office (USPTO) describes that be a permission blockchain technology is to be implemented and used, it would record and certify personal as well as business data, as to make sure that only authorized members can access this data. On an addition, the system will also keep a track on all the individuals who have accessed the data.
Using blockchain technology to combine all the existing data storage platform into a single secured network is the best way to increase the efficiency by controlling the number of the storage location.
The document reads as:
The embodiments of the invention use a private blockchain to store all different types of records that have to be conveyed to different service providers. In this manner, the relevant data of the individual or a business is stored securely in the blockchain storage system which is then given to the service provider, later on providing secured access to the service providers to the record such that they can only access only the records which they are authorized for. Example A home health care provider can only access the healthcare records on the blockchain.
Recently service providers and individuals are mostly using the internet and social sites to share their personal information, business records and data mainly through e-mails, attachments, web portals etc. There is indeed a high risk of data corruption and hacking of data in electronic sharing method. Using blockchain in this digitalised era will prove to be very beneficial and efficient system where an individual person can store all his record in a single digital ledger which will be more hassle-free and well as will provide maximum security. Both service and business providers can access these records whenever necessary.