Blockchain in finance

Abstract

Blockchain is a type of decentralized, distributed public ledger. This is the technology which allows the smooth functioning of cryptocurrencies such as Bitcoin. The key incentives for using the blockchain are its immutability, which means the transactions once recorded on the blockchain cannot be changed very easily. This encourages transparency and trust even among strangers and has been the reason for its widespread adoption. At the code level, the blockchain is a series of message blocks linked together by a code known as a Hash, which every block inherits from the previous block. The Hashes join the blocks in the form of a public database called a Chain. One of the key applications of blockchain has been in Trade Finance where it has enabled cumbersome documentation to be greatly reduced and the time to verify and validate the transaction has also been substantially reduced.