The blockchain technology and its applications in the financial sector

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School of Business | Bachelor's thesis
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Date

2017

Department

Taloustieteen laitos

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Mcode

Degree programme

Taloustiede

Language

en

Pages

24

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Abstract

Industries and old ways of doing business have been reshaped or become entirely obsolete due to the new digitalization trends. The current technology to truly revolutionize and disrupt especially industries that rely on trust, such as the financial sector, is the blockchain technology. The core idea of this technol-ogy is that it is a public, shared and tamperproof ledger that allows people who do not know or even trust in each other to share information in a trustworthy ledger, where any sorts of immaterial infor-mation of value can be stored. This thesis is a literature review that provides a theoretical framework to examine how the blockchain technology affects particularly the financial sector. As this thesis acknowledges, the blockchain technology has the ability to enhance efficiency, increase transparency, reduce risks when less assets are tied up during transactions and reduce expenditures, such as transaction costs in the financial sector. One of the most ambitious application of the blockchain technology is smart contracts, but there are other applications as well that can benefit the financial sec-tor. The technology has great potential to disrupt the current financial system, but since the technology is still in its initial stage of development, it is too early to say what the blockchain technology will exactly enable. The most extreme hypothesis is that the blockchain technology makes banks unnecessary. How-ever, this thesis argues that the financial institutions are more likely to take advantage of the blockchain technology than to become obsolete because of it. 

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Thesis advisor

Murto, Pauli
Mustonen, Mikko

Keywords

blockchain technology, financial sector, smart contracts, Distributed Ledger Group

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https://urn.fi/URN:NBN:fi:aalto-201707046243

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[kand] Kauppakorkeakoulu / BIZ (Open Access)