Blockchain Technology for the Financial Market

Abstract

Purpose: Blockchain technology has exploded in popularity in the social economy over the years. Because blockchain technology offers so many advantages, it was first employed for Bitcoin transactions. The interaction between blockchain technology and financial industries will grow more personal and interwoven with the introduction of Bitcoin. As the value of blockchain technology became evident, more financial companies began to test its use in monetary operations. Numerous financial companies have been experimenting with blockchain technology to reduce the transactional costs and to improve the efficiency of operations, specifically in the domain of financial notes, cross-border payments, and asset-backed securitisation. Blockchain will have a broad range of applications in the financial industry shortly.

Methodology: Through financial tools and methods, trust may result in successful businesses. In the long term, blockchain technology is generally a significant source of the finance industry revolution. It allows you to create immutable transaction histories available to everyone on the network. A blockchain system consists of a sequence of blocks connected by a connection to the block before each block. Each block comprises more than one transaction representing changes in the ownership of assets on the ledger. A consensus procedure is employed to add new blocks to the existing chain, in which members of the public blockchain confirm that transactions are accurate.

Findings: Blockchain technology is still in its infancy. The challenges of sustainability, privacy, secrecy, and latency, among others, have surfaced. Financial markets must get a deeper grasp of Blockchain to provide trustworthy alternatives.

Significance: The book chapter highlights the architecture, protocols, and applications of Blockchain Technology. The chapter will also enlighten the readers about the challenges and solutions of Blockchain Technology in the Financial Market. Moreover, the chapter also discusses the future research scope of Blockchain Technology in the Financial Market.

Citation

Kaushik, K. (2023), "Blockchain Technology for the Financial Market", Grima, S., Sood, K. and Özen, E. (Ed.) Contemporary Studies of Risks in Emerging Technology, Part A (Emerald Studies in Finance, Insurance, and Risk Management), Emerald Publishing Limited, Leeds, pp. 305-320. https://doi.org/10.1108/978-1-80455-562-020231020