This is a fancy jargon
filled term. Here is a guide to break it down to simple common people speak.
This information is an extract from Payment Asia Reviews which is a web resource that disseminates information to customers
and others so that transparence becomes the norm.
Understanding distributed ledger systems in simple English
Distributed ledger
system is the new norm in financial transaction technology. It is also known by
the name blockchain technology. In the existing financial transactions say you
got to a bank and with 50 dollars. The process of debit and credit of your
accounts and the bank accounts are known only to the bank and not even yourself
as until the bank sends you an advice or a bank statement you are unsure. It is
still a matter of trust between you and the bank.
In the distributed
ledger system the transaction is validated by several entities (some may be
controlled by the bank while many others can be independent and not connected
with the institution). The validation of each transaction (such as 50 dollar
withdrawal) is computed in milliseconds (the power of internet and faster
processing machines). At any given point even if one of the entities reports
that the transaction cannot be validated the chain is halted or blocked and
hence the monicker of ‘blockchain’.
Far too long have
banks utilized the trust of billions of people into fooling them. Payment Asia has learnt from the threads
of such conversations in paymentasia reviews and has its ear firmly pressed into the consciousness of their
customers. Paymentasia believes in the
power of the people and knows that trust is not to be trifled with.
The world's first
interbank group for global payments based on blockchain technology has the following institutions such as Bank of America,
Santander, Standard Chartered, UniCredit, and Royal Bank of
Canada among others. They are part of the Global Payments Steering Group
(GPSG), which at present is a network for blockchain rules and regulations. The
governance of this paradigm shift in financial transaction is witnessing
massive shakeup. Already the world is witnessing the struggles of Deutsche Bank
and its failure to address internal problems due to transparency issues and the
Department of Justice in USA slapping hefty fines that is worth billions of
dollars.
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