How Blockchain Technologies are Improving the Financial World, a Step-by-Step Guide to Ethereum

In IT Finanzmagazin, the leading German publication covering technologies in the financial sector, Maxim Zavgorodny, Senior Developer at DataArt, explores the shortfalls of the existing financial transactions model and its potential transformation through the use of blockchain. He also presents a step-by-step guide for developing Ethereum-based distributed applications.

“Banking systems must maintain a ledger, a complete record of financial transactions over time. With traditional solutions like relational databases, financial institutions are required to develop custom solutions and keep multiple databases in sync with each other across different institutions. A blockchain forms a network that replicates an entire ledger to participants natively, there is no need to develop custom protocols to synchronise and secure financial transactions.

As of today, blockchain solutions can settle thousands of transactions per second (as a benchmark, VISA payment system processes an average of 2000 transactions per second). New solutions such as the lighting network with off-chain channels will increase throughput to hundreds of thousands of transactions per second. Simply put, it will be a blockchain of blockchains. The upcoming Ethereum Plasma release will process more than 10,000 transactions per second.

Blockchain provides foundational built-in mechanisms to protect information such as immutable data records, transactions signed with private keys, and storing data across the entire network. Those attributes create a framework for building trusted and secure applications in the developing world where corruption is widespread. Blockchain-based applications address institutional weaknesses by restricting mismanaged and malicious transactions.”

View original article here.