Implications of Blockchain On The Financial Markets

Posted on September 5, 2019
Kevin Bell

Financial institution and banks have been an integral part of the economy. The founding principle on which financial institutions and banks have operated on is trust.  Trust that they will safeguard your money, trust that they will work what’s best for the people. Now with developments occurring at such a rapid pace and the advent of the blockchain technology there seems to be a paradigm shift from the traditional practices to newer and advanced technologies.

Blockchain is a technology that allows people to create a platform where multiple users come together to create a financial ledger that records transactions from the very initial transactions thereby creating a block of transactions which allows every participant to inspect them, but  it’s not in the control of a single user .

This creates a twofold advantage for the member as it provides transparency and does not require the participants to trust or even know of each other. Blockchain is slowly and steadily building a reputation as one the trusted sources of investment. One of the factors contributing to that is Bitcoin, as blockchain is the technology behind Bitcoin The success and acceptance of Bitcoin has made everyone more aware of the technology behind it.

Blockchain as a technology is gaining popularity day by day and now a lot of businesses are considering investing in this technology, this is going to impact financial markets.

 Impact on financial Markets:

Disruption in conventional practices:

Banks have been the link between those who have funds and those who need these funds. But with advent of blockchain technology this practice seems to be changing. As blockchains does not require an arbitrator to facilitate transactions between them. this has brought about a drastic shift in the borrowing and lending of money. As more and more people look towards blockchain as an investment strategy banks and financial institutions need to upgrade their traditional practices.  And traditional practices need to now make way for new practices.

International Appeal

Businesses are growing they are no more limited by geographical boundaries. As businesses have cross border transactions, it should also be kept in mind how they will make and receive payments. Banks and other financial institutions usually charge high rates for such transactions. Also, the time for these transactions to go through is 5-7 days. But the blockchain technology offers a more efficient way to conduct these transactions and at a lower rate as well. This will have an impact of the financial markets as they will enable a more efficient and inexpensive way of conducting transactions.

Transparency:

Financial institutions have always been burdened by not being very transparent and being ambiguous in nature. With blockchain technology and application development this is going to change. Blockchain technology is extremely transparent is nature as the players involved in this can view the transactions and the history is recorded and there is no way these transactions can be tampered or altered with it. This will directly impact the financial institutions as they will need to be clearer and more transparent when it comes to their transactions.

Security:

Blockchain technology and applications are constantly looking to improve and upgrade their applications and developers are constantly looking find solutions to challenges that may arise. One threat financial institution always face is that of lack of security of transactions. Blockchain technology is extremely safe as no one can tamper or modify the transactions. Banks and financial institutions are looking into developing probable blockchain solutions to overcome this threat.

Increased productivity:

 Blockchain applications allow users to transact with each other directly without using any middlemen and arbitrators to facilitate the transactions. This has enabled them to increase their efficiency as decisions can be take faster and no outsider can play a role influencing the decision-making process, thus as and when the potential arises that requires immediate action it can be implemented. This has enabled in increased productivity as well.

Conclusion:

 Blockchain as a technology is still in its initial stages, the applications need to be developed and they still have a long way to go, as awareness about this technology needs to increase. Financial institutions and markets are investing in the development of blockchain technology, this in turn increases the demand for skilled blockchain developers. Financial institutions and markets are looking forward to completely integrate this technology in the day to day transactions as it will increase their efficiency and lower transaction costs. This will bring about a change in the financial markets and how they function, monopoly and dependency will reduce and will give all the participants a level playing field. This will cause a drastic shift in transforming the rules and setting up new set of rules.

Cryptocurrency and Software Development- How The Two Mash Up to Create Major Change

Posted on August 31, 2018
Kevin Bell

Cryptocurrencies have clearly seen their fair share of ups and downs. From USA to Japan, every country has now looked into these and formed its stance on regulating them; after all, every single investor in the world looking for new avenues has looked into cryptocurrencies as an opportunity. Bitcoin and Ethereum have been at the forefront of the crypto wild ride, having a market cap of $100 billion and $45 billion respectively.

The ones who wanted to speculate upon cryptocurrencies speculated and either went on winning big or losing big. Jamie Dimon, the CEO of JP Morgan, was clearly against cryptocurrencies for a long period of time but in 2018 even he changed his opinion. USA saw its first legitimate acceptance of financial instruments based on cryptocurrencies. All in all, no one can accurately predict the upside or downside of Bitcoin and Ethereum but cryptocurrencies are here to stay in some or the other form.

While the speculators were busy studying the upward and downward trends, the intelligent investors looked into understanding the cryptocurrencies and the technology behind them. Each of these cryptocurrencies is based on blockchain. The simplest way of defining blockchain would to be call it an encrypted public ledge which records every transaction between the parties involved.

Bitcoin serves as token on this network while Ethereum serves as a smart contract. Beyond these applications, Blockchain Solutions provide highly sophisticated utility in several key areas of business and administration:

1. Encrypted public ledgers for banks, financial institutions and capital markets: Blockchain technology can serve as a huge support system for financial institutions looking into both running, leveraging and regulating financial markets. Stock exchanges can use these systems for maintaining real time data of listed companies, banks can use financial transactions in encrypted mode for better credit ratings thereby increasing their lending activities. Finally, the market regulators like SEC (USA) or SEBI (India) can use encrypted public ledgers to see the upcoming trends in the capital markets and look for any discrepancies.

2. Enterprise software upon a blockchain network for operational management: Blockchain application development can seem very complex at its core but it can have great impact on the daily running of a company. One of the key developments in the software development industry have been the ERP systems which help behemoth organizations run with startup like efficiency rates. That said, these ERP systems are usually lagging and expensive. If the same ERP systems are made over a blockchain network, they can provide real time data and analysis to the top management based on even the minutest of transactions occurring on a daily basis.

3. Blockchain for government bodies: Those who believe that blockchain can only work for private organizations looking forward to adapting, you couldn’t be more distant from reality. Blockchain as a network can be of great value to any set up which has a humongous amount of data being added, removed or altered on a very regular basis and one which involves a big number of participants. Hence, any system falling in these criterion can leverage blockchain for its benefits, including government bodies. For instance, with the help of a very sophisticated set of blockchain developer the administration of Visakhapatnam, a port city in India, is working towards creating a blockchain based network of real estate records. This way, the data shall remain available, safe and accessible.

With advancements in blockchain, software development will have to shift towards more collaborating approaches like agile development, over the more rule based approaches. Hence, blockchain will only foster avenues for innovation and opportunities for software developers.

Blockchain Technology- The trends that are going to rule in 2018

Posted on April 11, 2018
Kevin Bell

In the world of technology, the buzz around blockchain has seen an inordinate increase in the past few years. And if you have still not heard of this term, then you will definitely soon! Having been regarded as a technological novelty for a long time, blockchain is evolving with all speed, and may soon emerge as an operational tool on a global scale.

 Of all, trade finance is one of the most interesting areas that blockchain is seeking to address. Blockchain holds a great potential to further amplify financial inclusion to some of the remotest corners of the world. And, it is not only the financial sector that is to be affected by blockchain solutions, the technology is here to stay and shape various other domains as well. Here is what the future of blockchain technology will be in 2018 and years to come.

 Understanding Blockchain: What is the Technology All About?

 Prior to understanding what will be the future of blockchain technology in 2018, it is to be first understood what blockchain really is. In a single sentence, it is essentially a digital ledger of transactions that is incorruptible.

 In the words of a layman, blockchain can be understood as a large decentralized spreadsheet that securely records the transactions. Cryptographic algorithm serves as the means of security for the ownership and transactions which are stored in data blocks. As the blocks are linked to each other, the technology is known as Blockchain.

 Blockchain Trends that are Very Likely to Rule in 2018

 2017 was a great year for blockchain app development. Since then, there has been an increase in the demand of blockchain applications. The technology is all set to rule this year as well. And below are the blockchain predictions all set to rule in 2018 that every blockchain developer must definitely read.

  • Blockchain will Get its Very Own Asset-Tracking Tool: The blockchain platform is all powered by terms like ‘coins’ or ‘tokens’. When it comes to bitcoin technology, bitcoin is also regarded as the token. By making use of a token, it is ensured that it only appears at a single location at one time. Hence, it is very likely that asset management tools will be created for businesses that will be based on blockchain technology.
  • Merger with IoT (Internet of Things): It has been predicted that around 20 percent of the total deployments of IoT will be enabled by basic levels of blockchain services. So, it is clear that blockchain technology is here to stay, it is here to rule. The technology will bring various benefits when merged with IoT, for example, reducing costs, accelerating transactions, and building trust.
  • Proof-of-Stake (PoS) is Here to Rule: A consensus algorithm of Bitcoin, PoS, or proof-of-stake aims at achieving distributed consensus by deploying cryptocurrency blockchain network. And this algorithm is very likely to see a growth in its usage in order to reach the consensus in 2018.
  • Implementation of the Rule of Law by Bitcoin: If you are very much into bitcoin, then you must be definitely aware of the term ‘Smart Contract’. It is basically a program which is stored on every computer network. Smart Contract is considered as a powerful tool when it comes to automating business process operations. Bitcoin will be implementing the ‘Rule of the Law’ when parties to contract get into a dispute.

Growth in the Utilization of the proofs of ‘Zero-Knowledge: There is no denying that blockchain acts as a very powerful platform when it comes to making transactions between two groups or parties. And speaking of ‘Zero-Knowledge proof’, it discloses the veracity of a specific statement, without actually divulging any extra information yonder what it is proving. These zero-knowledge proofs will be acting as a concept in enhancing key elements like privacy and security.

So, this was all about the future of blockchain technology in 2018 and the coming years. If you are indulged in blockchain app development, then you must definitely take these into account.