The Secret Behind Bitcoin's Blockchain Technology Tested By 40 Banks
Why are the Fintech and banks equally banking on the blockchain? The secret behind the success. Read along.
The Context Of Blockchain Technology
In the current scenario, there was a major boost to blockchain technology where R3 CEV which is a fintech innovation company thereby along with 40 banks successfully trialed five distinct blockchain technologies in parallel using the innovative multiple cloud technology providers in a first-of-its-kind test. Hereby the move shows just how much major financial and tech institutions have high hopes for blockchain the technology that powers Bitcoin.
Hereafter a blockchain is a public ledger of all transactions that have ever been executed. The fact that as it is constantly growing the completed blocks are added to it, and also along with a new set of recordings and the blocks that are added to the blockchain thereby in linear chronological order as through cryptography ensuring that they will remain meddle-proof. Here it is that the blockchain thus stands as a tamperproof record of all transactions on the network distributed to all participants.
The Banks Banking On Blockchain
Hereby even though the technology has many potential uses outside the financial system, these banks have been among the first to look at the benefits of the cost advantages and the efficiency that this technology offers them. The fact that it was due to Santander InnoVentures and that there is distributed ledger technology that could hereby reduce the bank's infrastructure costs attributable to cross border payments, securities trading, and regulatory compliance between $15 -20 billion per annum by 2022. Therefore the potential benefit this innovative technology offers has led banks to openly and secretly work to explore the technology.
It was then that during the recent experiment the trials were conducted to run the smart contracts on the R3 managed privately distributed ledger built by Chain, Eris Industries, Ethereum, International Business Machines Corp., and the Intel Corp. connected the participating banks. While these smart contracts were programmed to facilitate the issuance, secondary trading, and redemption of commercial paper a short term fixed income security typically issued by corporations to raise funding according to the press release by R3CEV. Hence by now, the experiment includes five distributed ledgers that ran logically identical smart contracts to enable banks to compare performances between them. Hereafter these distributed ledgers were supported by cloud computing resources of Microsoft Azure, IBM Cloud, and Amazon AWS.
What Is The Blockchain All About?
Consequently, the financial innovation firm R3 CEV has begun partnering with leading banks worldwide to design and apply distributed ledger technologies to global financial markets. Hereby R3CEV was joined by nine banks, the number that is now at 40; Banco Santander, Bank of America, Barclays, BBVA, BMO Financial Group, BNP Paribas, BNY Mellon, CIBC, Commonwealth Bank of Australia, Citi, Commerzbank, Credit Suisse, Danske Bank, Deutsche Bank, Goldman Sachs, HSBC, ING Bank, Intesa Sanpaolo, J.P. Morgan, Macquarie Bank, Mitsubishi UFJ Financial Group, Mizuho Financial Group, Morgan Stanley, National Australia Bank, Natixis, Nordea, Northern Trust, OP Financial Group, Royal Bank of Canada, Royal Bank of Scotland, Scotiabank, SEB, Societe Generale, State Street, TD Bank Group, UBS, UniCredit, U.S. Bank, Wells Fargo, and Westpac Banking Corporation are the names to be noted on the list.
Hereafter according to the CEO of R3, David Rutter, this development further supports R3’s belief that the close collaboration among global financial institutions and technology providers is set to create the significant momentum that is behind the adoption of the distributed ledger solutions across the industry. It is therefore that these technologies represent a new frontier of the innovations and will dramatically improve the way the financial services industry operates, in much the same way as the advent of electronic trading decades ago delivering huge advancements in efficiency, transparency, scalability, and security.
The Bottom Line
It is here that the distributed ledger technology or simply blockchain comes as a cost-saving advantage, swift transactions, tamper-proofing of records, absence of a middle party, and much more. Thereby for these reasons the blockchain technology is attracting not only financial institutions but many others in the world of music, diamonds, traders and stock exchanges, insurance, voting, and even healthcare.
Subsequently, the blockchain technology is winning hearts when it comes to the Fintech institutions as well as banks. It helps the technologists to bring more of the application to the general public. This technology is assigned to bring the result thereby making sure the investors are well paid. Here the distributed ledger technology helps make the institutions a very much distinguished technology.
It is important to note that the security and safety provided by the blockchain era are much more than what the other technologies offer. It is one such area where the investors, as well as developers, are strongly integrated.