Blockchain as an Emerging Financial Trust Model

Abstract

Blockchain is being touted as a new technological genie being unleashed from its bottle. Through Blockchain, the epicenter of trust is about to diffuse, it is said. Blockchain is the technology behind cryptocurrencies such as bitcoin and ether. Blockchain can be characterized as a class of technologies that facilitate validated, tamper-resistant transactions that are consistent across many network participants. Simply put, blockchain can be thought of as a large distributed database or spreadsheet that guarantees a ‘single truth’ across participants who may or may not trust each other. Blockchain has been referred to as a distributed ledger system because it mimics large databases and spreadsheets. It is therefore not surprising that the financial industry has been in the forefront about expressing interest in blockchain. Even though most blockchain applications are still in test environments or sandboxes, it is strongly believed that blockchain is already disrupting the financial sector. Disruptive technologies are game-changers that follow the spoor trails of a paradigm shift.