25. Determining the Mechanism Used within Blockchain System and Enabling Acceptance

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.

The use of blockchain is increasingly considered in many financial institutions, but the way to apply it is quite complex. In this regard, there are two key components that are distinguished: 1) determining the mechanism of the system, and 2) enabling acceptance.

The key challenge for financial institutions today is to determine the mechanism used within blockchain system and apply it in their operations. This is a long process that involves an extremely complex research and testing, which will demonstrate the justification of the adoption of this advanced platform in daily transactions due to lower costs of operation and higher speed transfer of funds.

Bitcoin is based on a distributed database blockchain that is seen as a large register that contains all the transactions made. This database is replicated on all nodes. Blockchain is the computer technology used to create virtual currencies. Many institutions are also interested in applying the features of blockchain, which is a technology of storage and transmission of information at minimal cost, that is also secure, transparent and that operates without central control.

Even if this acceptance changes almost completely in certain activities, for example that of officials who will have to develop towards a greater part of advice and representation to the detriment of the mechanical tasks of registration, conservation and restitution, the opponents will probably be fewer and less powerful than in the monetary field, which in general will promote the adoption of cryptocurrencies.

At the same time, the diversity of fields of application will favor the existence of different payment systems, hence different units of account. As it is the case with other blockchain backed cryptocurrencies, the bitcoin was created from a computer technology that represents secure and functioning information storage and transmission technology without central control. The blockchain is similar to a huge, public, anonymous virtual registry of all transactions made by users.

This article is part of the academic publication Dividing by Zero by Ana Nives Radovic, Global Knowledge 2018

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