The blockchain technology is seen as the main technological innovation of Bitcoin. Bitcoin defined a blockchain as a record of all bitcoin transactions ever executed.
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A block is the current part of a blockchain which records some of the recent transactions. As these transactions are completed, blocks go into the blockchain as permanent records in the database. A new block is generated when one block gets completed. The blocks are linked to each other in linear and chronological order. Every node (systems connected to the Bitcoin network with the help of a client that performs the task of validating and relaying transactions) get an automatically downloaded copy of the blockchain when they join the bitcoin network. In the blockchain, one can find complete information about the addresses and their balances from the genesis block to the most recently completed block.
As the name suggests, a public blockchain platform allows everyone present on the platform to read or write to the platform, provided they are able to show a proof of work. The number of potential users of any technology can generate in this space is high and hence there has been a lot of activity here. It is a fully decentralized blockchain.
A private blockchain allows only a set of owners or a particular owner to have the right to make any changes to the platform. This is a concept that draws considerable interest from the financial industry and large companies.
Various banks and financial institutions have been investing in blockchain technology.
Given below are some organizations that use blockchain technology.
The bank has been exploring various use cases of blockchain in payments and settlements of flat currencies, asset registries, enforcement and clearing derivative contracts, regulatory reporting, KYC, AML registries, improving post-trade services etc.
US Federal Reserve
Federal Reserve is reported to be working along with IBM to develop a new digital payment system related to blockchain.
Goldman Sachs had participated as a lead investor in a bitcoin startup Circle Internet Financial Ltd.’s $50 million funding round. It has also discussed extensively about blockchain in its annual publication.
Barclays has two bitcoin labs in London that is open for various blockchain entrepreneurs, coders and businesses. It provides mentoring to blockchain enthusiasts and gives them a chance to work with the bank on certain projects. Barclays claims to do around 45 experiments on blockchain internally.
Citibank has set up three separate systems in the Citi group to deploy blockchain based distributed technologies. It has also developed an alternative to bitcoin, naming it Citicoin which they use internally in order to understand digital currency trading systems in a better way.