Blockchain

• Blockchain is an incorruptible data ledger for recording economic transactions. The records it keeps are fully public and easily verifiable. It constantly keeps on growing as blocks are added to it in a linear and chronological order.
• A blockchain’s integrity hinges on strong cryptography that validates and chains together blocks of transactions, making it nearly impossible to tamper with any individual transaction record without being detected.
• The Blockchain is stored on a network of participants (often referred to as nodes in network terminology). The participants adhere to certain rules, and share data with each other. The rules which are applied to sharing and submitting data are referred to as the bitcoin protocol. As all these nodes have equal power in the network and abide by the same rules, it is called a peer-to-peer network. There is no central or leader node in this network.

Blockchain Use in Banking

• The most significant benefit of the blockchain is that it can eliminate inefficiencies in existing financial markets and drive faster, lower-cost transactions that are more efficient and provide increased liquidity, transparency and security. The blockchain offers trust for the user, eliminating the need for the intermediary and mitigating the risk of human error with complete automation.
• In stock trading it can reduce the costs and time of stock purchases as right now when a stock is traded, it has to pass through brokers, exchanges, and needs to be “settled”. Also, everyone receives the cut from the operation and the processing time may take days. Blockchain could eliminate a lot of friction and stock tampering also.
• In the banking sector alone Blockchain technology could cut bank’s infrastruture costs for cross-border payments, securities trading and regulatory compliance by $ 15- $20 bn a year from 2022, according to a recent report by Spanish bank Santander, management consultancy Oliver Wyman and venture capital investor Anthemis.
• A slew of banks including  Citi, Credit Suisse, JP Morgan, Royal Bank of Scotland and UBS have joined a coalition, led by a firm called R3, to implement blockchain technology in banking.
• One of the largest US online retailers, Overstock focused on building the crypto-capitalism future. In 2016 the company unveiled their new blockchain-based private and public equities trading platform, which allows instant and secure share trading online.