Implementation of Blockchain in Current Transaction Systems

Abstract

The blockchain technology is being deployed in many areas and the banking system is not an exception. It is a new technology and should be introduced in the modern banking system. The aim of this project is to give an overview of blockchain technology with its benefits and emphasizing on the application of this technology in the banking sector. We are going to generate our own cryptocurrency along with a banking system with number of nodes between which we can perform transactions using blockchain. And we are using Ethereum (Online Transaction Management System) for our ongoing project. Now, blockchain is better than the conventional banking systems as, combining shared databases and cryptography, blockchain technology allows multiple parties that may not know each other from different geographical locations to have simultaneous access to a constantly updated digital ledger that cannot be altered. So, we will generate our own virtual nodes (Users who want to transfer money) which will transfer our own cryptocurrency to each other. The blockchain is a ground-breaking innovation that empowers Bitcoin, Litecoin, Dogecoin, and other virtual monetary standards to be open, mysterious, and secure. The blockchain basically is a database about each Bitcoin exchange in detail. Typically known as an "open record," the log contains metadata about when and how every exchange occurred. The record is freely available through APIs and deluge destinations. To forestall messing with current and furthermore past exchanges, the database is cryptographically made sure about. Because of Cryptography can edit only the parts of the blockchain that they “own” - by possessing the private keys required to write to the file. It also keeps everyone’s copy of the distributed blockchain is kept in sync. Using blockchain rather than conventional banking system would help in fraud reduction and that too by quiet a lot of margin. Financial institutions spend millions of money per year to keep up with Know your Customer (KYC) and customer due diligence regulations according to a Thomson Reuters Survey. These regulations are meant to help reduce money laundering and terrorism activities by having requirements for businesses to verify and identify their clients. Blockchain would allow an organization to access the verification details of a client by another organization, thus avoiding repetition of the KYC process. Blockchain disruption could be highly transformative in the payments process. It would allow banks higher security with minimal lower costs to process payment between organizations and their clients and even between banks themselves. Blockchain would get rid of all the intermediaries in the payment processing system.

Keywords: Blockchain, current transaction system, KYC, online transaction management system, processing system

Cite this Article: Dhruv Rawat, Gaurav Rana, Jaskaran Singh Bindra, Amit Kumar. Implementation of blockchain in current transaction systems. International Journal of Data Structures. 2020; 6(1): 31–59p.