Effective Ways In Which The Blockchain Technology Has Improved The Financial System #001

jueco (76)modquality controllerin Steem Alliance • last year

Hello great minds,

It is a wonderful opportunity to be here today again to discuss on an issue of great importance.

I believe you are all doing perfectly well and are enjoying your activities in this community as we strive to make steemit great again.

Today, we shall be discussing on Important ways in which the blockchain technology has shaped the financial system.

The advancement in the operation of the financial sector is no news and today we shall be examining some Improvement, please follow along:

INCREASED TRANSPARENCY IN FINANCIAL TRANSACTION:

The blockchain helps to Improve transparency in financial transaction by providing an immutable and decentralized ledger that stores and verifies all transaction

The blockchain technology operates in a different method when compared to the traditional financial system.

In the traditional financial system, the central authority are in charge of the processing and storage of the financial transaction,and this creates a potential vulnerability but the blockchain on the other hand operates on a network of computers which is known as the nodes, and a copy of the blockchain is maintained by each node.

This decentralized operation removes the need for a central authority and ensures that no one has full control over the activities of the blockchain.

The transactions on a blockchain are usually stored and recorded on the chain in an orderly manner, and as such it is impossible to remove/alter a block on the chain once it has been added without consensus from the network.

With the immutability feature of the blockchain, it makes the transaction tamper-proof, and it would require the modifying of other blocks to alter any transaction on the blockchain which will require a huge amount of computational power.

IMPROVED SECURITY THROUGH CRYPTOGRAPHIC TECHNIQUES:

Source

The blockchain plays a very important role in improving financial security by providing a tamper-proof and decentralized framework for the verification and storage of data.

The blockchain makes use of cryptographic hash functions to create unique fingerprint of data.

These hash functions such as SHA-256 are used to uniquely Identify blocks of data that even a minor change in transaction will create a completely different hash, thus making it impossible for a data to be tampered with without detection.

The blockchain also aid digital signature and this provide authentication in blockchain transactions.

These signatures are designed using Public key cryptography where each participants owns a private and public keys.
The public keys is usually shared fir verification and the private keys are usually kept secret and used to validate transactions.

Whenever transactions are validated using the private keys, these transactions can be confirmed using the public, thus confirming that the transaction was made by the owner of the account.