Blockchain Technology: Emerging Opportunities and Risks

Alpesh Doshi

When Satoshi Nakamoto first published his famous paper11The identification of the real person whose pseudonym is Satashi Nakomoto is under debate. It could have been one person or a team, but the real identity is not known. on a new peer-to-peer (P2P) electronic cash system called “Bitcoin” in 2009 – together with the software that enabled this type of system to be implemented – no-one knew the long-term impact it would have. Nakamoto’s paper and software featured an innovative new technology called “blockchain”. In short, blockchain has launched a fundamental challenge to the nature of money and trust that underpins modern commerce whose repercussions are only starting to be understood.

This chapter will introduce the ideas that surround blockchain, starting with the Bitcoin and its key components. It will then examine in more detail the foundations of the concepts, algorithms and computer science comprising this technology. Finally, it will explore some of the characteristics of blockchain that can affect risks in the financial services sector. Although blockchain has many potential consequences, this leading sector has been chosen to examine the application of this new and exc

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