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Blockchain - A Disruptive Technology In Financial Assets

Profile image of Betty JepkemeiBetty Jepkemei

2019

Abstract

Blockchain as technology promises to be a hugely disruptive and empowering technology both in public and private finance applications. As a method to order transactions in a distributed ledger, blockchains offer a record of consensus with a cryptographic audit trail that can be maintained and validated by multiple nodes. It lets contracting parties dynamically track assets and agreements using a common protocol, thus streamlining and even completely collapsing many in-house and third-party verification processes. Block chain originally conceived as the basis of cryptocurrencies, aspects of blockchain technology have far-reaching potential in finance. Although it promises a secure distributed framework to facilitate sharing, exchanging, and the integration of information across all users and third parties, it is important for stakeholders to analyze it in depth for its suitability in business applications. There is a wide spectrum of blockchain applications ranging from cryptocurrenc...

Figures (5)
Fig 1 how block chain works. 'School of Business, Kabarak Univeristy, Kenya ’School of Computer Science Kabarak University, Keny. A block chain database contains two types of records, transactions and blocks. Blocks hold batches of transaction. These blocks are time stamped and are linked to previous blocks and the transaction cannot be altered retroactively. Block chain can also record transactions automatically, these transaction value is measured in cryptocurrency that cannot be controlled by any party such as the central bank. A block chain database contains two types of records, BETTY JEPKEMEI', ANDREW KIPKEBUT?
Fig 1 how block chain works. 'School of Business, Kabarak Univeristy, Kenya ’School of Computer Science Kabarak University, Keny. A block chain database contains two types of records, transactions and blocks. Blocks hold batches of transaction. These blocks are time stamped and are linked to previous blocks and the transaction cannot be altered retroactively. Block chain can also record transactions automatically, these transaction value is measured in cryptocurrency that cannot be controlled by any party such as the central bank. A block chain database contains two types of records, BETTY JEPKEMEI', ANDREW KIPKEBUT?
Fig 2 Distributed ledger Technology.
Fig 2 Distributed ledger Technology.
Figure 3: Coin colors cryptographic key provides as shown in figure 3 Another application, after receiving SEC (security exchange comission) permission, online retail giant Overstock announced it would issue public shares of company stock on its blockchain platform. This example is only one part of the story for blockchains in digital assets. They can be the asset, but blockchains can also be used to run the market itself. Basically, these financial efforts are treating digital assets as a bearer instrument, which is a wide and dexterous application. Another application, after receiving SEC (security
Figure 3: Coin colors cryptographic key provides as shown in figure 3 Another application, after receiving SEC (security exchange comission) permission, online retail giant Overstock announced it would issue public shares of company stock on its blockchain platform. This example is only one part of the story for blockchains in digital assets. They can be the asset, but blockchains can also be used to run the market itself. Basically, these financial efforts are treating digital assets as a bearer instrument, which is a wide and dexterous application. Another application, after receiving SEC (security
Fig 3: Filter Factors for Block chain adoption But, with all the talk of building the digital backbone of a new transactional layer to the internet, sometimes blockchains, private cryptographic keys and cryptocurrencies are simply not the right way to go. Many groups have created flowcharts to help a person or entity decide between a blockchain or master copy, client-server database. The following factors is a filter of much of what has been previously done: client-server database. The following factors is a filter Traditional Paper can be difficult to counterfeit
Fig 3: Filter Factors for Block chain adoption But, with all the talk of building the digital backbone of a new transactional layer to the internet, sometimes blockchains, private cryptographic keys and cryptocurrencies are simply not the right way to go. Many groups have created flowcharts to help a person or entity decide between a blockchain or master copy, client-server database. The following factors is a filter of much of what has been previously done: client-server database. The following factors is a filter Traditional Paper can be difficult to counterfeit
Fig 4: Disruptive Technology Theory (Yu and Hang, 2010)
Fig 4: Disruptive Technology Theory (Yu and Hang, 2010)

Key takeaways

  • While invented to help transact in bitcoin, blockchain is the digital global ledger that not only records cryptocurrency transactions, but also provides a home for documents of all sorts.
  • Use a good antivirus ii Run anti-malware scans regularly iii Never state block chain keys in plain text iv Use email blockchain wallet to send keys There is one notable security flaw in bitcoin and other blockchains: if more than half of the computers working as nodes to service the network tell a lie, the lie will become the truth.
  • According to Forbes one of the primary block chain security issues is lack of regulation and standards, bitcoin and cryptocurrencies wants to continue enjoying the anonymity that fuel the growth of blockchain while some government regulators and legacy financial institutions argue that even cryptocurrency must be regulated.
  • Since the consensus algorithms incentive, the users in the network to agree upon one version of the truth, it solves the double spending problem: On a blockchain the double spending problem is solved by publicly announcing the transaction to all miners in the blockchain such that all miners verify all transactions.
  • Disruption is an intersection between economic social and technological Domain figure 5, In order to explain if blockchain can be seen as a disruptive technology in Financial investments ,we will clarify the concept of disruptive innovation, by presenting the evolution of disruptive technology theory ,explain if blockchain is disruptive or not, and to subsequently explain the link between a disruptive technology and the effect it will have on business .

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Related topics

  • Business
  • Finance
  • Consensus Algorithms