Industrial Engineering Journal

ISSN: 0970-2555
Volume : 52, Issue 4, No.4, April : 2023
IMPLEMENTATION OF BLOCK CHAIN IN FINANCIAL SECTOR TO IMPROVE
SCALABILITY

Mr B.Rama Subbaiah, Assistant Professor,

Bandaru Bhargavi, Muttaluru Srinivasa Reddy, Chunduru Venkata Tejendra Prasad B.Tech
Student
Department Of CSE,SVR Engineering College,Nandyal

ABSTRACT— The Blockchain is an encrypted database that stores information statistics, or in

different words, it is a virtual ledger of any transactions, contracts - that needs to be independently
recorded. One of the key capabilities of Blockchain is that this virtual ledger is out there throughout
several masses and heaps of computer and isn't always sure to be stored in a single place. Blockchain
chain has already commenced disrupting the financial offerings area, and it's far this technology which
underpins the virtual currency- bitcoin transaction. The aim of the paper is to conduct research on the
effect of blockchain technology on the financial sector. There is no doubt that the world is curious to see
how this promising technology will influence or shape the future of banking. Blockchain enhances
safety in data storage and transmutation, avails a decentralized and transparent network infrastructure
and significantly reduces the costs in operations. These remarkable attributes make blockchain a very
promising and in-demand solution even in an industry as restricted as the banking sector.
Keywords—Applications of blockchain, benefits from blockchain, features of blockchain, security of
blockchain.

I.INTRODUCTION
A blockchain is a distributed digital ledger where transactions can be recorded and checked
electronically over a network of computers in the absence of a central ledger. Cryptography is used to
protect the data from deception or hackers[1]. Blockchain is being called “the new internet”, and is
expected to transform businesses across various sectors, most importantly the financial sector.
It was invented by “Satoshi Nakamoto” in 2008. A blockchain helps to record all the transactions made
so that no alterations can be made later on so as to maintain the security of the data. Today, entities
maintain records in their own traditional ledgers for transactions between them. This sometimes leads to
transfer or exchange of a considerable amount of data between entities, resulting in an increase in time
and cost for them. It also makes the process of any asset transfers inefficient, costly and vulnerable. The
duplicated shared ledger concept in blockchain technology can help remove these weaknesses[2]. The
use of smart contracts, an application of blockchain technology, can enhance efficiency through event-
triggered mechanisms. Most credit and budgetary organizations can't do their work without various go-
between, while their interest makes the administrations of these establishments substantially more
costly. The execution of blockchain will empower pointless arbiters to be relinquished and give clients
and banks less expensive administrations. The fundamental zones in which banks and other budgetary
organizations will probably actualize blockchain innovation: Payment, Client Identification framework,
Loans, and Credits protection[4].

II. LITERATURE REVIEW

Blockchain is still in its relative infancy, but it is increasingly becoming a solution that will result in an
essential advantage in the context of the switch of belongings within business networks.

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 Industrial Engineering Journal
ISSN: 0970-2555
Volume : 52, Issue 4, No.4, April : 2023
A. Invention and importance of blockchain
Satoshi Nakamoto sketches out a new method for peer-to-peer digital cash gadget, the use of a
cryptocurrency known as bitcoin. It became an appreciable improvement. Cryptocurrencies (virtual
currencies) aren't constructed or aren't in fee of the government. They have got their own set of policies
to follow. This type of association has come to be the very new blockchain era, which was the bottom
for the growing numbers of authorizing expended blockchain[1]. Blockchain era permits exchange cash
without intermediaries. Thus, humans ship cash immediately and correctly and with none trouble at ten
same times. It's miles one of the maximum promising and revolutionizing inventions. Attested to be as
large to the internet or energy. Sadly, very few have heard of the era but significant social media
coverage is assisting. It is one of the maximum promising and positive new era for the coming era. It’s
an allotted ledger generation that roots bitcoin[3]. Presenting a new manner to record, preserve the
records and transfer the records. Even greater incredible is the transparent, and secure statistics, this is
auditable and proof against blackout.
B. Blockchain an underlying technology of bitcoin
Many humans count on that blockchain and bitcoin are identical. Blockchain is the underlying
generation of bitcoin. They're intently associated, however, they're no longer the same factor. In 2008,
bitcoin turned into introduced as a form of unregulated virtual currency created through Satoshi
Nakamoto. Blockchain was the ledger answer used to safely record facilitating using this new forex
when you consider that there has been no bank or government involved to reveal or police the
transactions. The confusion between blockchain and bitcoin regularly arises because those two concepts
have been introduced at the identical time. The blockchain era as for instance the only used for bitcoin
allows for the recording of transactions on an allotted ledger across a community of users. The open-
source era allows for the garage of records from the transactions into blocks. Each block consists of a
time-stamped report of the transactions with each block related to the previous one, for that reason
developing a series[10]. The records saved at the blockchain is absolutely obvious and everlasting
without the potential to trade or take away previous transaction facts from the dispensed ledger. This
characteristic and answer can be used to resolve many inefficiencies in unique packages and industries.

III.PROPOSED SYSTEM
Blockchain is an era that strengthens an awesome manner to have huge-undertaking implications so that
it will now not genuinely transform financial offerings, but many other commercial enterprise and
industries. Billions of humans and groups are served and trillions of bucks are moved around the
previous worldwide financial device every and every day. Nevertheless closely reliant and dependent on
paper, despite the fact that dressed up with a virtual appearance, there are various problems with this era.
Motive brought price and delays as well as make it much less complicated for crime and fraud to cripple
it. In spite of the monetary employer’s resistance to trade, blockchain and its anticipated benefits make it
worthwhile. Blockchain, not like traditional structures, is dynamic enough to come to be a pacesetter in
implementation in a chargeable market situation. In a blockchain, the best advantage it guarantees is that
every celebration has a report that is maintained in a ledger to be had to everyone. It is a ledger
extensively surpassed between special users thereby developing a shared database that is replicated to
those users and who can get right of entry to it simplest when they have the get admission to the right for
it.

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 Industrial Engineering Journal
ISSN: 0970-2555
Volume : 52, Issue 4, No.4, April : 2023
A. Things blockchain can do for the financial sector
a). On-chain settlement
Blockchain is a pioneering technology based on a distributed ledger. It has a capability to lower the
fraud rates in the international bank system and it is also capable of providing On-chain settlement.
Blockchain can be used in the financial sector specifically in banking sector providing a platform for
banks to reduces fraud as well as On-chain settlement to the users that also helps in reducing the
processing time. DLT is capable of providing a platform on Ethereum blockchain. The user will don’t
have to rely on the centralized system for the confirmation of the transaction.
b.) Low transfer fees
The user will have a transparent cost model for sending a certain amount of money for overseas
transactions. The traditional system has a number of intermediates which results in the high transfer
fees. The banks have to rely on the centralized system for verifying the transactions. The process is
complicated and takes a lot of time to verify the transactions. The platform proposed will have a
transparent cost model for sending the money cross border that will provide ease to the user and they
have to pay only the negligible cost for sending money.
c). 24*7 Availability
The platform is accessible anytime from anywhere from the world. The nodes in the distributed network
will verify the transaction and if more than 75% verifies the transactions, the process will be completed
and the user on the side will receive the funds. The nodes will have certain amount of price to verify and
block creation.
d). Transparency
The bank system presently changes the conversion rate without informing the users which results in high
transaction cost. The platform proposed will have a transparent conversion rate that will be visible to the
user for sending the money overseas with ease. This will also allow the user to seek in his ledger and see
the transaction history and conversion rate.

Fig. 1. Benefits of Using Blockchain

B. Proposed working of platform
Every bank registered on this blockchain platform will have to update the ledger by uploading customer
data in encrypted form which allow security to the user’s data. By registering to this platform every bank
will have the same ledger for the customer data and transaction history. DLT will provide a full
transparency model to the user to send money overseas along with 24*7 availability. This will also
reduce the time for the transaction to process as every node present in the network will verify the
transaction and store the transaction history in the blockchain database. This distributed ledger will also
vanish the double spending problem present in the centralizes system. This platform also provides on-
chain settlement with the negligible cost for a transaction.

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 Industrial Engineering Journal
ISSN: 0970-2555
Volume : 52, Issue 4, No.4, April : 2023

Fig. 3. Banks on the Blockchain Platform.

If a user wants to send money to the other user, the platform will provide some features over the
centralized system. The banks registered within the blockchain platform will interact with each other in
the ledger. The user can only send money to the banks registered on the platform that will carry all the
information of other users in the distributed ledger.
The user sending the money via this platform will have transparency for the transaction made with the
negligible fees. The user on the receiver side will get the funds after more than 75% nodes verifies the
transaction. However, the availability of the platform is easily accessible and they don’t have to visit
banks for sending money overseas. The transaction made has to undergo a consensus mechanism that
will be carried out by nodes in the network.
The platform will have a certain advantage over the centralized system as the transactions made will be
immutable which reduce the rate of frauds conversions.

IV.CONCLUSION
Although the potential of blockchain is widely claimed to be at par with early commercial interest,
banking firms need to understand the key features of the technology and how it can solve the current
business issues as on one hand, internet enabled the exchange of data while on other, the blockchain can
involve the exchange of value. Banks need to identify opportunities, determine feasibility and impact
and test proof of concepts. However, the questions around emulations will have to be resolved through
focused discussions with competent regulatory authorities and incorporation of their though-process.
Further we will research how we can provide off-chain settlement for the banks which are not listed on
the platform, one of the alternate to do it is to access its database with the permission, due to which
further transaction can be taken place (between listed and non -listed banks) so that both can have equal
ledger maintained.

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