Will the Blockchain Deliver a Decisive Blow to Financial Fraud or Fall Flat on its Face?
Technologists have been promoting blockchain technology as a sort of panacea that could save the financial sector and protect everyday banking customers from fraud. Economists and journalists have painted a different picture. They've claimed that distributed ledgers are an easy way of obscuring illegal transactions and point to several high-profile cases where criminals used cryptocurrencies to cover smuggling and gambling debts.
Considering that some engineers have gone so far as to call blockchain technology nothing more than a passing fad, the truth may very well lie between these two extremes. There are, however, many organizations already deploying this technology to reduce the risk of fraudulent purchases.
Systems Currently in Place to Prevent Fraud
Since blockchain decentralizes the data structures used to govern economic transactions, it can define the concept of trust. Institutionalized trust providers like third-party banking authorities have long defined what a legitimate transaction is. However, this trust has been brought into question in a world filled with media manipulation and disinformation.
Auditors remain the main method of preventing fraud, but blockchain technology is often more trustworthy because it relies on a P2P network running consensus algorithms that ensure perfect data replication happens across all nodes. There's no way an attacker could reasonably ...
Read More on Datafloq
Considering that some engineers have gone so far as to call blockchain technology nothing more than a passing fad, the truth may very well lie between these two extremes. There are, however, many organizations already deploying this technology to reduce the risk of fraudulent purchases.
Systems Currently in Place to Prevent Fraud
Since blockchain decentralizes the data structures used to govern economic transactions, it can define the concept of trust. Institutionalized trust providers like third-party banking authorities have long defined what a legitimate transaction is. However, this trust has been brought into question in a world filled with media manipulation and disinformation.
Auditors remain the main method of preventing fraud, but blockchain technology is often more trustworthy because it relies on a P2P network running consensus algorithms that ensure perfect data replication happens across all nodes. There's no way an attacker could reasonably ...
Read More on Datafloq
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