Vivian Obakpolor
Banks are the sector that hold funds in the world today but they have had issues for the longest time (fraud, slow processes and so on) and the rise of Blockchain has also been very impactful to solving the problems of the banks. Blockchain is an immutable distributed ledger that runs on a peer to peer network and takes records of daily transactions in the network between nodes. This research aims to see how effective blockchain is in the banking sector that means doing extensive reading on the current blockchain systems been used in banks and also giving a recommendation on which blockchain based system is best in solving the issues of blockchain in banks.
Vivian Obakpolor
ABSTRACT
Banks are the sector that hold funds in the world today but they have had issues for the longest time (fraud, slow processes and so on) and the rise of Blockchain has also been very impactful to solving the problems of the banks. Blockchain is an immutable distributed ledger that runs on a peer to peer network and takes records of daily transactions in the network between nodes. This research aims to see how effective blockchain is in the banking sector that means doing extensive reading on the current blockchain systems been used in banks and also giving a recommendation on which blockchain based system is best in solving the issues of blockchain in banks.
INTRODUCTION
In early history, banks have been the institutions that deal in funds and investments of the society. They given loans and also serve as intemediaries to help customers send transactions from one country to another country. Banking problems sky-rocketed during the pandemic.
Due to these problems, transactions in the bank have lengthy protocols like using an ID (passport) to collect money that is sent to you, which leaves people stressed and tired. With the emergence of this new technology known as blockchain these issues can be retified.
PROBLEM ANALYSIS
Here are some prblems banks face when using blockchain.
- Scalabilty
- Cost
- Security
- Privacy
- Hard to integrate
Algorand
Algorand is a cryptographic currency that works to best consensus on transactions with a system based on proof of stake.
Merits
- To be considered as honest, one must follow the protocols as they are given in a cordial manner.
- It against attacks.
- It mines the new blocks in seconds.
- It is fair and trustworthy.
- It is accurate.
- It is very secure.
Demerits
- Its adoption level is low.
Corda
Corda is a decentralized ledger platform that is used for recording and processing transactions and records.
Merits
- It helps to record and manage financial information.
- It setups workflow between firms and organizations.
- It assists in including regulatory and supervisory observation by selecting the node.
- It validates transactions between parties and sub groups.
- It allows the use of consensus mechanisms.
- It uses industrial tools.
- It defends the network against attacks.
Stellar
Stellar also known as Stellar Lumens is a permissionless decentralized protocol, for digital currency to fiat money transfers that enables cross border transactions between any currencies.
Merits
- It can process about 2000 transactions in seconds.
- The cost of transaction is very low.
- It supports the use of smart contracts which improve the functionality of the protocol.
Demerits
- A user must have at least 20 coins in their wallet for it to function.
RECOMMENDATION
The suggested blockchain technology that shoould be used in banks is Corda. It creates a way to secure data from users, does fast transactions, assits the entire network with increased efficiency of operations, reduces cost of operations and has a better processing time.
CONCLUSION
The financial sector's use of blockchain technology is acceptable and addresses all blockchain-related difficulties. The financial industry has also been observed to be the most affected by blockchain. As a result, Corda is preferred solution, as it offers several advantages and appears to have the best use cases in the financiaal sector. The use of money is gradually becoming digitalized, thanks to cryptocurrencies like Bitcoin, Dogecoin, Peercion and others. It also shows that there is a need for more blcokchain research in order to find a proper solution to blockchain.
