Page 43 - Banking Finance November 2021

ARTICLE

automatically through peer-to-peer network and a strategic technologies for 2020 in its report "Top 10
distributed timestamping server. It is authenticated by mass Strategic Technology Trends for 2020'. It said public
collaboration powered by self-interests. Its structure blockchains are presently too immature for enterprise
facilitates strong workflow where the participants feel deployment due to poor scalability and interoperability
secured because data security is high. but expects the technology to overcome these issues
by 2023.
History of blockchain o However, it sees a current role for enterprise blockchain

Y First time Blockchain-like protocol was proposed by in digital transformation with "evolutionary and
Cryptographer David Chaumin 1982 in his thesis incremental improvements" in trust and transparency.
"Computer Systems Established, Maintained, and
Trusted by Mutually Suspicious Groups" Working Mechanism of Blockchain

Y Again in 1991, Stuart Haber and W. Scott Stornetta Blockchain is just like a shared digital ledger. It allows
described further on a cryptographically secured chain thousands of connected computers or servers to maintain a
of blocks. single, secured, and immutable ledger. Transactions here
are done without involving any third-party intermediaries.
Y In 1992, Haber Stornetta and Dave Bayer incorporated
Merkle Trees to the design, which improved its efficiency So in order to do the transactions, everybody needs its
by allowing several document certificates to be collected wallet. This Blockchain wallet is nothing but a program
into one block. which allows one to spend cryptocurrencies. Such wallets
are secured by cryptographic methods (public and private
Y The first Block Chain was objectified by a person or
keys) which is helpful in managing and keeping control over
group of people using the name Satoshi Nakamoto in his transactions. When a user creates a transaction over a
2008 to serve as the public transaction ledger of the Blockchain network, a block will be created that represent
CryptoCurrency bitcoin. The identity of Satoshi that transaction is created.
Nakamoto still remains unknown. The invention of the
blockchain for bitcoin made it first digital currency Once a block is created, the transaction request is
without the need of a trusted authority or central broadcasted over the peer-to-peer network that consists of
server. computers popularly known as nodes, validate the

Y Actually Satoshi Nakamoto used the words block and transaction. The verified transaction can involve
chain separately in his original paper, but were cryptocurrency, contracts, records or any other valuable
eventually one single word "blockchain" became popular information. Once a transaction is verified, it is combined
in place of separate word i.e. block and chain by 2016. with other blocks and it creates a new block of data for the
Y Further in May 2018, Gartner (Gartner, Inc, officially ledger. Here it is important to note that with each new
known as Gartner, is a global research and advisory firm transaction, a secured block is created, which are secured
and bound to each other using cryptographic principles.
providing information, advice, and tools for leaders in
Whenever a new block is created, it is added to the existing
IT, finance, HR, customer service and support,
Blockchain network confirming that it is secured and
communications, legal and compliance, marketing,
sales, and supply chain functions. Its headquarters are immutable. It can be also understood from the below
flowchart
in Stamford, Connecticut, United States) found that only
1% of CIOs (Chief Information Officers) indicated any
kind of Block Chain adoption within their organizations Advantages of BlockChain:
and only 8% of CIOs were in the short-term "planning There are many advantages to using Blockchain technology
or (looking at) active experimentation with Block compared to other traditional technologies.
Chain". For the year 2019 Gartner reported 5% of CIOs Y Security: With BlockChain, Business process will be
believed Block Chain technology was a 'game-changer' better protected with the help of a high level of security
for their business.
Y Hacking threats: Hacking threats against the business
Y Again Gartner listed blockchain as one of the top ten will also be reduced to a greater extent.

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