Blockchain driving new ways of Reference Data

Author: Geetanjali Adhikari
Publish Date: January 04, 2019

Introduction

Since 2009 there has been a lot of news of cryptocurrency. From there the need of analyzing the use of technical coded language and reference data gets in demand which can change the market a ton.
Cryptocurrency is a virtual form of currency. It has got designed in a virtual asset form that works as a medium to secure financial transaction. It uses the medium of coded language for transfer of funds. Since Crypto-currency transactions are irreversible and fraudsters. People find them useful because they can collect the payments and ignore the deliver. Also, most of the major exchanges are buying and selling bitcoin on centralized servers. That means all the information for users will get stored in one centralized location and prone to attack. But these kinds of issues volatility and infighting are not fit for business. Thus, companies are now looking at the principle of blockchain technology to adapt it to the extend what would work for their business.
Blockchain on other hand is the operational platform which brings the cryptocurrencies into play. The blockchain is the technology that serves as the distributed ledger that forms the network. The network creates the means for transacting and enables transferring of value and information. Coded currencies are the units used within these networks to send value and pay for these transactions. Furthermore, one can see them as tool on blockchain, in some cases serving as a resource or utility function. Whereas, reference data is data design or use solely for categorizing or referencing a wide variety of data in the database. This is done to create a standard structure system for data sources drawn out of distribute ledger.

Journey of Blockchain

Blockchain came into existence in 2008 and its practical implementation in 2009. Blockchain is defining as a distributed peer-to-peer network. It is the best invention since the internet itself. It allows value exchange without the need of a central authority.
This is how it works by keeping track of all the units of each cryptocurrency traded. All the data get arranged systematically in the form of a ledger in a digital file that tracks all cryptocurrency transactions. Once the entire database got created it gets distributed across the world via a network of private computers. These private computers have both storing of data and executing computations. Each of these computers represents an end node of the blockchain network and has a copy of the ledger file.
The distributed ledger paradigm of blockchain could get used to manage reference data of any block in blockchain. This will help those companies who are collaborating to maintain contractual data between them.

Nowadays, companies going forward to trade through cryptocurrency. This will propel the need of Information to be held on a secure blockchain network. The network should be shared and continually reconciled database. A strong reference data system required to source quality data. By putting all the information on a blockchain, it will be possible for them to control who can change the data and who can actually get the access to them. So, the whole process will become more reliable and more real-time. This will also help when the business network get spread across different regulatory boundaries. This can be a very efficient way to share reference data. It helps in error reduction and support to the creation/ modification of workflow. This can be a way of using the network that has obvious benefits. The blockchain database can truly use as the authentic secure synchronize database (ASSD).

Glowing Future of Reference Data

Now, how blockchain will help reference data business is a big question for all the reference data management companies. Data is not a homogeneous entity in reference data and it consists of different categories, each with its own set of characteristics. Each of these units of categories may have strong dependencies on each other. As blockchain is being a distributed ledger technology. System will allow the financial reference data companies to push these functions to a cloud environment. On cloud environment there is no need to reconcile multiple copies of data units.
It provides a sophisticated and light-footed solution to the headaches caused by these inherited systems and processes. Also, the other reason could be using blockchain for data security and for data storage is, it will give an opportunity to data management companies to offer digital trust and to take advantage of the inviolability of blockchain architecture and the things that make that architecture work.

Conclusion

Blockchain is so powerful that it has the potential power to impact every component of the financial services industry. This will draw fundamentally new ways to transact business in the digital world. Not all the companies will come to pass the way and many of these changes will take years to develop. It is largely depends on how the technology works and how one can easy step into the world of digital forays. it will give the greater clarity into blockchains future adoption as well.