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   Blockchain Concept

Blockchain technology can enhance the basic services that are essential in trade finance. At its core, blockchain relies on a decentralised, digitalised and distributed ledger model. By its nature, this is more robust and secure than the proprietary, centralised models which are currently used in the trade ecosystem.

Blockchain technology creates a viable, decentralised record of transactions – the distributed ledger – which allows the substitution of a single master database. It keeps an immutable record of all transactions, back to the originating point of a transaction. This is also known as the provenance, which is essential in trade finance, allowing financial institutions to review all transaction steps and reduce the risk of fraud.

The application of blockchain also offers a far better means of establishing and proving identity than present day systems. Blockchain technology greatly simplifies the direct transfer of trade assets and increases confidence in their provenance. This is achieved through providing unique, non-forgeable identities for assets, along with an inviolable record of their ownership. The result is an opportunity for additional financing services based on the trade of physical goods.

   Blockchain Concept

Blockchain technology can enhance the basic services that are essential in trade finance. At its core, blockchain relies on a decentralised, digitalised and distributed ledger model. By its nature, this is more robust and secure than the proprietary, centralised models which are currently used in the trade ecosystem.


Blockchain technology creates a viable, decentralised record of transactions – the distributed ledger – which allows the substitution of a single master database. It keeps an immutable record of all transactions, back to the originating point of a transaction. This is also known as the provenance, which is essential in trade finance, allowing financial institutions to review all transaction steps and reduce the risk of fraud.


The application of blockchain also offers a far better means of establishing and proving identity than present day systems. Blockchain technology greatly simplifies the direct transfer of trade assets and increases confidence in their provenance. This is achieved through providing unique, non-forgeable identities for assets, along with an inviolable record of their ownership. The result is an opportunity for additional financing services based on the trade of physical goods.

   Benefits Of Blockchain

   Benefits Of Utilising Blockchain Technology

Transparency

As blockchains are shared and everyone can see what is on the blockchain, this allows the system to be transparent and as a result trust is established. This is more relevant in scenarios such as the disbursement of funds or benefits where personal discretion should be restricted.

Immutability

Once the data has been written into the blockchain, it is extremely difficult to change it back. It is not truly immutable but, due to the fact that changing data is extremely difficult and almost impossible, this is seen as a benefit to maintaining an immutable ledger of transactions.

Highly secure

All transactions on a blockchain are cryptographically secured and provide integrity. Network participants have their own private keys that are assigned to the transactions they make and act as a personal digital signature. If a record is altered, the signature will become invalid and the peer network will know right away that something has happened.

High availability

As the system is based on thousands of nodes in a peer-to-peer network, and the data is replicated and updated on each and every node, the system becomes highly available. Even if nodes leave the network or become inaccessible, the network as a whole continues to work, thus making it highly available.

Simplification of current paradigms

The current model in many industries such as finance or health is rather disorganized, wherein multiple entities maintain their own databases and data sharing can become very difficult due to the disparate nature of the systems. But as a blockchain can serve as a single shared ledger among interested parties, this can result in simplifying this model by reducing the complexity of managing the separate systems maintained by each entity.

Cost saving

As no third party or clearing houses are required in the blockchain model, this can massively eliminate overhead costs in the form of fees that are paid to clearing houses or trusted third parties. Much has been made of how blockchain will cut costs in the financial industry. The primary way it will do this is by replacing legacy systems and record-keeping infrastructure and reducing IT costs.