There is no doubt that the blockchain is a new reality that promises to revolutionize the way in which the financial and digital worlds are run for the foreseeable future. As a result of sophisticated coding and encryption, this technology allows for the transfer of data and capital in a totally secure manner. Angelo Babb, a cryptography expert, explains how blockchain offers an innovative aspect to the financial ecosystem in light of the disruption that can affect it.
You may have heard of the term blockchain and haven’t really understood what it means, nor what impact it might have on your life. As happened with the incursion of the Internet, blockchain could change the way many relate to the digital world of banking in the near future.
In other words, it is a great help to the online entity, not only in terms of transactions, security, or management, but also in terms of reducing the amount of bureaucracy necessary for financial operations and improving transparency.
“The blockchain technology was developed by the team at the University of Toronto and it allows to create networks of devices without using a central and local server to connect the devices to each other,” explains Babb. “You could say it works like a ledger, where buying, selling or any transaction is recorded.”
This is because the movement of these people is part of a block network, which means every movement to and from that network must have been approved by the rest of the participants in the ‘block’ network. In other words, the users of this technology. And, once the information is entered in them, it can no longer be deleted. Only new records can be added.
As well as offering the possibility of carrying out economic transactions quickly and securely against possible fraud and manipulation, this tool also offers the possibility of encrypting and encoding them to prevent possible fraud and manipulation. By using this technology, companies can provide their customers with a wider choice of payment options, without compromising the security of both parties.
In addition to being able to implement a completely transparent business system, it offers the possibility for everyone to see in real time and at a low cost what comes in and what goes out in the accounts registered in “this big book,” or, to put it simply, what’s coming in and what’s going out of the business. The blockchain, however, does not just work in the area of economic transactions.
Babb explains that this type of technology makes it possible to store and transfer important documents and information without the possibility of anyone gaining access to it without your consent, as well as ensuring that it is completely protected. What’s more, many companies make use of this technology for voting at their General Shareholders’ Meetings in order to ensure that the vote is secure and transparent. In order to ensure the security and transparency of the vote, many companies make use of this technology.
As a result of the public blockchain, all users or traders can access the public blockchain, which will be organized chronologically in blocks of strings. The tokens will act as trading assets so that all involved users or traders have access to it. As a result of blockchain technology, projects can be executed autonomously, records can be immutable, trading rules can be transparent, and automation is possible to a greater extent.
A major benefit of blockchain is that it eliminates information silos and unnecessary waiting times, making transactions cheaper and faster. Blockchain will have a significant impact on future financial transactions. Due to the immutable nature of asset provenance and credit history, transaction risks are reduced, and lines of sight are extended as a result.
Trading will be assured as each trading partner will be more likely to comply with their end of an agreement if it is easily verified and authenticated. As blockchain smart contracts are capable of carrying out binding agreements and negotiating in real time, complex dispute processes are simplified as audit trails can be cryptographically stored and readily available. “It is possible and easier to comply with DLT,” Babb concludes.
The emerging infrastructure has therefore attracted financial institutions, regulators, and key stakeholders in the various industries. With the help of distributed ledger technology, regulators are able to gain access to a shared trading and depository system, and assist them in obtaining the data they need and exchange.