From “Dividing by Zero” (Global Knowledge, 2016-2017), Ana Nives Radovic 

Blockchain and FinTech play a central part in the digital revolution that shakes the world of banks, insurance companies and more financial markets in general, therefore it is the reason why a new arrangement will allow the revision of the positive law in order to empower the issuance and the conduction of certain non-admitted financial securities to the operations of a central securities custodian by using this platform.

fintech perperzonaTo understand the scope of FintTech and blockchain revolution it is necessary to recognize a speeding up of hi-tech innovation which includes the tendency towards better connection with related parameters, such as rules and their fulfillment, changes in banking practice, and increased rivalry with FinTech start-ups that take advantage of their quickness to have a strong impact on the outdated financial sector. If a majority of “minors” agree on the possibility of the transaction, then it is validated, time-stamped and entered in the common register. A new block is then added to the blockchain in chronological order and definitively. This approach, which is at odds with the current model, however, faces certain slowness and a high cost because of the computing power required to verify each transaction, limiting its development.

This practice has been developing since the crisis of 2008, both in the securities and in cash system. The key problem that was visible from the earliest days of blockchain development was that the current banking system that is planned to be improved is that it requires outsized technical resources, as well as huge number of people on each side involved in these parts of transactions, such as the institutions who play roles of the lender and the borrower. The key element of change introduction is openness, fundamentally through the exploit of a blockchain. One of the main principles is that the collateral must be revalued at standard time, such as daily or in every few hours, in the same way as the accumulation of contracts or open positions it is supposed to wrap, associated with the market price of the security on the market.

digital perperzonaHaving in mind that the period without any constructive action has lasted too long, there is a strong decision of bitcoin enthusiasts to overtake the force and to encourage a new version of supplement to the blockcahin world, which competes the very first version and proposes an irreversible adjustment of the rules of the software that governs the bitcoin, in order to boost the control of the network and that it deals more transactions. For the achievable incorporation of additional protocols, the enthusiasts will be focused on bitcoin combination in conjunction with other fiduciary currencies.

This consists of more influential and consensus-based schemes that are related to a assured level of trust between participants. Since the blockchain usage raises less authorities or security concerns, it is not unanticipated that conditionally this technology is implemented to advance obtainable solutions. With the idea to face these fluctuations as well as the potential fractional return of securities, a margin call is considered among the two parties, where each of them is launching their own assessment, putting it side by side it with their counterparts. The usage of blockchain in financial sector could revolutionize the situation fundamentally, by reducing the significant amount of complexity of the reconciliation processes.

binary perperzonaThis platform intends to make this process straightforward by performing only one computation and submitting a harmonized representation to the stakeholders, consequently eliminating dissimilarities in theory. To make this transformation take place, a greater part of mining instruments will fall behind the idea that it should correspond to three-quarters of the computing power of the network for two weeks in order to reveal that it runs the engine correctly and can consequently enforce this new standard reasonably. Experiencing any kind of bugs at this time will lead to solving problems at the earliest stage in order to prevent any risky situation before broader implementation.

All of these shows that the users are hence reliant on its volatility, which is the spot on which bitcoin enthusiasts must not fail to turn down any liability, clearing up that the rate of conversion of the regular money into bitcoin may be dissimilar from what is relevant when we convert bitcoin into regular money. This does not mean that one might require bitcoin address in order to send money, since an e-mail or a phone number is as much as necessary, though the beneficiary does not have a digital wallet in some of major supported currencies they will receive bitcoins which could be exchange on other platforms.

ethereum perperzonaDepending on how successful this overthrow will be in early stage, as well as on how soon bitcoin that we know today and some advanced type of it will differentiate we will see how their registers where the transactions are recorded develop and later in which sense they might confront. We have already seen how that altercation works with ethereum, which at this time benefits indirectly from all those slowdowns of bitcoin. Regarding the relationship between blockchain and ethereum, it consisted in increasing, as an experimental platform which engages certain types of smart contracts that can be defined as self-ruling processor code evolving in equivalent of the database and capable to fulfill the requirements of exchange if assured conditions are met. Over the past several years cryptocurrencies benefited mostly from the keenness, passion and trust among the members of global bitcoin community, which is the reason why many enthusiasts believe that this type of transactions represents the future of money, explaining that it would soon totally replace traditional currencies, which, of course, could not be the case in the short term.

When it comes to regulation, it will depend on how authorities of certain countries would be willing to adapt the regulatory framework to those subjects that will be offering this type of services, but, as it is the case with many payment services, we expect to see restrictions in electronic payments related to gambling etc. and they will have the right to put back or cancel these transactions without warning, as well to adjust the time limits for exchange and withdrawal. This new system would be the support for big cryptocurrency mining companies, and consequently the absorption and centralization of this movement into an oligopoly. More commonly, this divergence illustrates this background’s opposition between mining businesses and the group in charge of the improvement of the bitcoin network, that brings all important resources together.

blockchian perperzonaBlockchain is in particular a technology of immediate synchronization of data, so the realization of transactions is not reduced to bringing together books of accounts, therefore it is necessary to perform a certain amount of tests in order to authenticate particular conditions and finally to make sure that the operation fulfills with the regulations in force, which means it still should involve some brains that the technology itself does not provide. Furthermore, it would be too optimistic and even unreal to expect that this technology could transform the payment industry in the next several years since the current technologic usage is not tailored to the performance of mass payment resources that require short-time responses, as it is the case with payment cards.

The formation of a private blockchain, shared with the smart contract tools, comes out to be the ultimate explanation to optimize the reconciliation procedures between financial institutions at the same time as lasting visible to the supervisory body. In any type of transaction services this is supposed to ease the automatic transmission of verified information, while automating the confirmation procedures and definite supervisory and that is the reason why these segments would take an advantage to a great extent of optimization, effectiveness and protection.

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