Page 29 - Banking Finance April 2020

ARTICLE

BLOCKCHAIN

TECHNOLOGY:

WILL IT CHANGE

THE WAY WE

BANK?

B lock Chain is a computer program that carries time The concept of block chain is such that the data on any block

specific data which is distinct and cannot be
cannot be modified on an standalone basis and if the data
modified. This data is controlled by a cluster of
computers and is not owned by any single entity. on any block is modified than the data on all the blocks gets
changed and since the data is verifiable on many systems
The data is carried in blocks and is linked to each other using such a change would easily be detected hence for all
cryptographic principles (Chain). The salient points of Block practical purposes the integrity of data on a block cannot
Chain is that the data is not central, is transparent and is be tempered with.
open for everyone to see. A blockchain has no transaction
cost (although infrastructure is required to support the Block Chain has the potential to disrupt the way we do
functioning of Block Chain) also block chains can be used for business and it could practically lead to the elimination of
carrying any kind of data may be financial or non financial. third parties and connect the seller directly with the buyer
and with the transaction costs being negligible the overall
Of all the purposes for which the block chain has found uses, costs could come down drastically and lead to better
the impact on financial domain has been the most effective. efficiency. The scope of block chains is enormous however
we would limit ourselves with the study of impact and
About the author potential of blockchains on financial sector which is the scope
of this reading.
Jatin Khanduja
Manager (Research) The phenomenal rise of Bitcoin with its peak at $20000 had
State Bank of India had everyone including Investors and Regulators astounded
Institute of Credit and Risk Management, Gurgaon
alike. The investors were exposed to the huge potential

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