Benefits of using Blockchain

Technology

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 The problem of Trusting
● We never trust strangers and to sometimes not even our friends.
● In any human association, there needs to be a set of protocols that everyone needs to address to do
things in a right manner.
● We used to rely on a third party who would watch over the rules; the referee, the manager, or the
middleman. We would all trust that third party to make sure the game is being played fair.
● For Example in modern transactional systems, the intermediary can be a bank (e.g. CitiBank); a
payment provider (e.g. Paypal); a remittance company (e.g. Western Union); a credit card (e.g.
Visa), and so on.
● In a “centralised” system, we trust a single third party (e.g. CitiBank) to act as the intermediary who
guarantees those two properties.
● In a “decentralised” system, our trust is placed elsewhere, namely in public-key cryptography and a
“consensus mechanism” that allows us to determine the truth.

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 The problem of Trusting

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 The Immutable Ledger of Transparency
● Immutable means that something is unchanging over time or unable to be changed. So in this
context, it means once the data has been written on a blockchain, no one not even a system
administrator, can change it.
● As a provider of data you can prove that your data hasn’t been altered, and as a recipient of data
you can be assured that the data hasn’t been altered. These benefits are useful for databases of
financial transactions.
● For Example: In a traditional database system, a person with higher privileges could alter data, that
might lead to security concerns. Blockchain eliminates that option and stores all changes or
alterations as transactions over the system, which helps to track them.

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 High Availability
● Highly available due to decentralisation.
● Any number of nodes can go down without affecting the Blockchain.
● Protect Institutes from DOS attacks.

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 High Security
● All transactions on a blockchain are cryptographically secured and provide integrity.
● Each block is connected to all the blocks before and after it. This makes it difficult to tamper a single
record because a hacker would need to change the block containing that record which he needs to
hack as well as all those linked to that block to avoid detection.
● Network participants have their private keys that are assigned to the transactions they make and act
as a personal digital signature.

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 Faster Dealings and Cost Savings
● By removing third-party intermediaries and overhead costs for exchanging assets, blockchains have
the potential to reduce transaction fees significantly.
● In the financial industry, especially in post-trade settlement functions, blockchain can play a vital role
by allowing quicker settlement of trades as it does not require a lengthy process of verification,
reconciliation, and clearance because a single version of agreed-upon data is already available on a
shared ledger between financial organisations.

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 Verifiability and Auditability
● Any record of the transaction can be verified by anyone openly.
● This doesn’t mean the records are always openly accessible.
● Easy to audit any transaction & the trail of it.

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 THANK YOU!
Any questions?
You can mail us at
hello@blockchain-council.org

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