Page 38 - Banking Finance February 2025

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computer program that is shared, transparent, 2020 - Beacon chain was introduced, which was is a
unchangeable & viewable on permitted network. significant part of Ethereum 2.0 upgrade.

Parts of a Block: Uses of Blockchains:
Blockchain provides us a safe and tamperproof ledger of
HEADER
assets, which are connected through a chain known as
HASH hashes, providing a reliable history of ownership. The
blockchain has number of applications in areas like digital
TIMESTAMP currency, trade finance, KYC, international money transfers,

NONCE etc.

MERKEL ROOT Few uses of Blockchain are-
Blockchain is the underlying technology for
Header: Identity of a block.
cryptocurrencies, providing a decentralized and secure
Hash: It is basically address of the previous block. Used to method for recording transactions.
connect 'n+1'th block with 'n'th block. Blockchain can streamline and simplify the complex and
Timestamp: It's a string of characters which identifies the paper-heavy trade finance industry by providing a single,
date and time when the document is created. immutable record of transactions.
Nonce: Nonce number can be used only once in a crypto Blockchain can provide a secure and efficient method
communication. for customer identification, reducing fraud and

Merkel Root: a data structure summarizes all the simplifying the KYC process for financial institutions.
transaction in the block. Blockchain can enable faster, cheaper, and more
transparent cross-border money transfers.
History of Blockchain:
2008- An anonymous creator named Satoshi Nakamoto Uses of Blockchain in banking:

introduced the concept of a 'Distributed Blockchain' in his We know that the banking industry's vital roles are lending,
groundbreaking whitepaper titled 'A Peer-to-Peer Electronic trading, payment processing and transaction settlement.
Cash System'. This paper laid the foundation for the creation Despite the advent of the advanced technology, most of the
of first decentralised cryptocurrency, Bitcoin. banking processes are done on paper, creating excessive

2009 - Satoshi Nakamoto authored Bitcoin white paper.
2014 - Blockchain 2.0 came into picture.
2015 - Linux Foundation launched The Hyperledger project.
2016 - In this year a cryptocurrency exchange Bitfinex bitcoin
exchange was hacked, resulted in 1,20,000 bitcoins being
stolen.
2017 - The company Block.one introduced the EOS
blockchain operating system. This system was designed to
support commercial decentralized applications. The purpose
of designing the EOS.IO platform was to eliminate
transaction costs and process millions of transactions per
second.
2018 - Bitcoin turned 10 on 31st October 2018.
2019 - Ethereum network transaction exceeded 1 mn per
day.

34 | 2025 | FEBRUARY | BANKING FINANCE