A Guide To How Blockchain Is Redefining Network Monitoring Services

Around the same time when bitcoin was entering the digital market, blockchain technology began making an introduction catching the attention of mainstream investment companies.  According to Blythe Masters, the leader of the New York-based start-up company Digital Asset Holdings, banks were facing a common problem in that they were dealing with incompatible financial databases during transactions.  This factor was complicated, costly, and tiresome when completing financial interactions.  While it seems that the Wall Street traders operate at lightning speed, Masters purports that the technology used to perform trades is old-fashioned and tedious.

Based on information from Masters, for any transactions to be made on Wall Street many telephone calls need to be made, emails must be traded, and even the occasional fax needs to be sent.  This could take approximately two or three days before any stocks are traded via clearing houses.  The procedure is known as a settlement lag, and each hour leading to the settlement is a precarious one where the trade hands between sale and purchase with risk of the transaction failing.  Obviously, it is within the bank’s best interest to reduce the lag time as much as possible.  This is where blockchain technology can be beneficial.

Wall Street traders who choose to acknowledge blockchain technology agree that blockchains can reduce the gap of a trade from days to minutes, potentially seconds.  According to a published report by Santander InnoVentures, the blockchain technology could save banks billions of US dollars by the year 2022.  All this is done via reduction of regulatory, settlement, and cross-border costs when conducting foreign currency settlements.

Masters states that he would like Digital Asset Holdings to be the distribution database handling the blockchain transactions.  Of course, speed and efficiency are not the only attractive qualities of the technology for banks across the globe.  According to Masters, regulators find that blockchain-based interactions present with increased traceability and transparency; thereby, offering an immutable audit trail and reducing any chance of financial fraud that comes from “cooking the books”.  It is quite ironic that these words are a direct quote from a female who was investigated for the cover-up of an energy-trading strategy fraud case by the Federal Energy Regulatory Commission.  Masters was not cited for wrongdoing and no charges were placed against the investigated female.

One of the most well-known facts is that Wall Street is a “rat race” where one needs to embrace control of trading, regardless of whether it is an ally or a death kneel.  To make revenue, it is recommended that you know where the average individual stores his money.  Is it in a current bank account or perhaps a savings account, maybe a safety deposit box?  The fact is that blockchain technology can help become a new repository of value.

How will this work?  A traditional loan has banks assess credit scores of the company or individual to lend money; however, blockchain technology could become the source of creditworthiness for borrowers.  This will facilitate more peer-to-peer financing for the individual.  Moreover, how does a typical money transfer or typical credit card service operate?  Traditionally, the money transfer or credit card service will flow through banks; however, blockchain technology could chain this option by offering an exchange of value from one person to another via direct contact.

Traditional accounting services will also be influenced by blockchain technology.  If you consider a well-known account business, such as the multi-billion company Deloitte, there is the chance that auditors may have a chance to commit financial fraud.  By implementing blockchain technology, the digitally distributed ledger will report transparent financial transactions of the business in real-time; thereby, reducing the need for large accounting firms.  This is one of the reasons why the majority of large players in the financial industry are investing in blockchain solution resources.  They find it beneficial to embrace the new technology from https://path.network/ to ensure it works for their company and not against them.

One of the new San Francisco-based startup companies, known as Chain, is reported to have raised in excess of $30 million in funding from businesses such as Citi Ventures, Nasdaq, and Visa.  The funding was obtained to develop open-source coding for distributed ledger databases; thereby, joining forces with Masters’ company, Digital Asset Holdings.  This development of blockchain technology helps underlie the original software available to developers, and the joint efforts were originally overseen by the respected company, the Linux Foundation.

In recent years, the company Goldman Sachs filed a patent for their own form of cryptocurrency known as SETLcoin – a type of digital currency similar to the bitcoin.  The SETLcoin processes foreign-exchange transactions and is designed to operate on the bank’s private blockchain technology.  This means that the replicated transaction ledger remains centralized and guarded by the company; thereby, seeming to defeat the purpose of blockchain technology.  In the patent, the SETLcoin is described as having the potential to perform an immediate settlement in foreign-exchange.  This would mean that all the capital acquired by the bank needs to remain in the reserve and freed up when required by the company.

Taking into account the issue of Goldman Sachs’ new patent, it can be seen that blockchain raises a question of how much people trust one another; furthermore, how much do they trust banks.  Reports have shown that the majority of people pay bank account interest and fees to verify accounts, but keep the information hidden from other individuals.  People pay thousands of dollars for amenities, insurance, lawyers (in some cases), and accountants to reconcile financial situations; however, this remains “quiet” between the person receiving money and the individual making the payment.  The trusted intermediaries are part of a professional trust that is being questioned by blockchain technology.

The majority of ideas surrounding blockchain technology may sound radical, particularly the fact that third-parties are paid to facilitate trust.  Regardless of whether the third party is a custodian, referee or agent, they will need to prove their value if they do not want to be supplanted by immutable, decentralized ledgers.  It makes one consider whether blockchain is removing the human element of interactions or if it is making our digital world a safer one by redefining network monitoring systems.


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