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Research project: blockchain, digital asset, and the financial system.

Research project: blockchain, digital asset, and the financial system.

Blockchain is technology that has revolutionized both the business and financial world. Blockchain has an
immense applications in every aspect of the economy such as supply-chain management, real estate, health
care, international trade, and finance. Your research project is to read about this technology, and summarize
what you will learn in no more than five pages. Your paper should provide answers to questions such as (but
not limited to): what is blockchain?, what are the applications of it in general, and in more details its financial
applications. I expect you also to discuss how financial institutions (such as banks) has used such technology
in Kuwait, and how has it reduced the transaction costs (An example is the recent use of the Ripple Network by
many banks in Kuwait ). The technology is expected to have a growing impact on our economy and life in the
next few years. You should properly list you reference using APA format. Plagiarism is strictly prohibited and
violates university code of conduct. If you have done similar research in other course, then you should
reference your work otherwise you might fall in self-plagiarism. The work you submit should be your own work
otherwise you will be violating the code of conduct and will be subject to failure. The objective of research
projects is to learn about something that could benefit you in your future career.

Lately, the blockchain, which can be bringing in consideration being an progressive technology to improve the future, has appeared as a new paradigm in the economic market place. The World Economic Forum (WEF) in 2016 predicted that the blockchain will revolutionize financial services, a platform for connecting consumers and producers. In addition, a blockchain was included in the “future of 10 new technologies” of the UN Future Report. Therefore, a large number of countries and companies in the relevant markets have invested in the blockchain sector, increasing the funding scale and participating in international development research.

This papers examines using blockchains carried out according to these purchases. Here, we provide an overview of the concept of blockchain technology and its potential to change the world of banking through facilitating global money remittance, smart contracts, automated banking ledgers and digital assets. In this regard, we first provide an overview of the core aspects of this banking service using blockchain, as well as the comparison between international market and Korean market. This study presents issues and countermeasures related to Korea’s related fields through the case of application of blockchain-based finance in foreign countries and Korea.

A blockchain is a distributed ledger technique in which all the members participating in the network share transaction information between the parties. That is, blockchain is a distributed database that maintains a continuously growing list of data records that are hardened against tampering and revision, even by operators of the data store’s nodes.

To confirm the financial transaction info, the sort of accumulating transactions that transpired for 10 min is called a prohibit, and conceptually, it is called a blockchain where the disables are sequentially linked. The blockchain is a ledger in which the Bitcoin transactions that have occurred so far are recorded in chronological order, and it is a public ledger open to everyone on the network. All members of the network collectively record, verify and store transaction information so that they can secure the reliability of transaction records without being notified by a “trusted third party” (TTP) such as a central bank or an administrative agency. It is also a very secure technology because it updates all the ledgers that are kept by each member every time a new transaction occurs. The blockchain cannot be counterfeited or hacked because it is counterfeit only when more than 51 per cent of the participants are synchronized by recording transaction details on the dispersal ledger.

The blockchain technically includes a very low-cost impact when managed based on a public important algorithm, a hash encryption method and a dispersed finalizing structure. It is therefore possible to replace the current centralized ledger structure with a distributed ledger. In addition, the banking sector considers the benefits in terms of stability, security and data management costs to be significant. As a result, service speed is expected to improve.

The blockchain modern technology is the most damaging towards the pay-per-view transportation program because P2P fiscal dealings are probable in between the functions if perhaps the internet is accessible without having the engagement of any financial organization or even a TTP. Owing to the transparency of transaction, information is guaranteed and we are considering using blockchains in various fields such as finance, health and administration. For this reason, start-up companies are already actively developing in the field of settlement, remittance and loan, banking, securities and investment, and are also expanding services based on blockchains.

Contemporary electronic digital settlement techniques count on trustworthy, key next celebrations to method obligations firmly. The pressure to reduce these transaction costs led to banks starting to accept claims on each other. This innovation made trading more convenient as merchants could now deposit notes from other banks directly into their own bank, eliminating the burden of converting paper money into gold to transfer the funds. In accepting the note from a different bank, though, the payee’s bank faced a new problem in which it was now exposed to the payer’s bank until settlement in gold could be arranged. Where note acceptance was limited to a small number of banks, this could be handled bilaterally.As the number of banks in the system increased, interbank payments became more cumbersome, and the incentive for banks to create a more efficient system increased.

Latest innovations have observed the development of computerized foreign currencies like Bitcoin, which blend new foreign currencies with decentralized settlement systems. Although the monetary aspects of digital currencies have attracted considerable attention, the distributed ledger underlying their payment systems is a significant innovation. As with money held as bank deposits, most financial assets today exist as purely digital records. This opens the possibility for distributed ledgers to transform the financial system more generally. The distributed ledger, which is implemented as a blockchain, is divided into closed and private, closed and public and open and public ledgers depending on participation and limitation of ownership of the ledger. Non-permissioned means that it is opened to everyone. Permitted is a structure in which only authorized persons can participate. Private ledger also limits the possession of the ledger to a small number of interested parties, but the public ledger can be owned by anyone.

In the fiscal sector, such as interbank payment and global monetary purchases, we utilize a shut down distributed ledger. Because of the nature of finance, reliability, stability and efficiency are priorities, blockchains based on a closed distributed ledger, where only authorized personnel can participate, are preferred. The closed type has a consensus mechanism that ensures the authenticity of the transaction, so that only a small number of specific groups can participate to offset the problems of openness. First, it is to secure technological development and standardization. Open type is difficult to standardize because of the lack of new standard method owing to technological development, but closed type is easy to agree and accept technical standards among participants. Second, this type can achieve efficiency and independence. Open type has the advantage that there is no specific power or reliance agency intervention, but the efficiency structure is lower compared to the closed type in consensus structure. Third, in the case of closed type, the transaction can be changed. An open type is not possible to modify the transaction recorded in the spreadsheet and can only be corrected by reverse trading, but the closed type can be modified by mutual agreement. In this respect, the financial sector adopts a closed distributed ledger.

The blockchain technology has distributed to economic dealings, in fact it is very probably be utilized in fiscal methods which includes settlement techniques like micropayment and large transaction methods. As a result of intervention by a number of institutions, foreign remittance services, in which customers have to pay a high commission fee, are considered to be the most effective field of blockchain technology by enabling direct transactions between individuals without a financial intermediary. In the case of banknotes, it is likely to be designed as a private blockchain.

Ripple, a FinTech business through the repayment industry, from United states, intends to implement a worldwide repayment neighborhood system by instituting blockchain technologies. This global network system is expected to be used in international currency settlement and foreign exchange market besides remittance services for individual customers. In addition, start-up companies are actively developing remittance services using blockchains