Security of blockchain-based finance
Blockchain or distributed ledger technology (DLT) has emerged as a powerful tool to transform financial transactions. With its decentralised storage, cryptographic authentication, consensus protocol, and immutability, blockchain provides a tamper-proof, single source of truth for all financial records. The smart contracts feature removes the need for intermediaries in financial transactions by automating the execution of rules. Hackers have gotten around the innate security mechanisms of blockchain. Still, attacks can be prevented by analysing the potential threat based on the use case and setting up multi-level security controls, a governance structure, and incident response systems. Different financial transactions like trade finance, regulatory compliance, or financial agreements can be made more efficient, transparent, and secure by providing shared records, an authentic audit trail, error and manipulation-free payments, and automated enforcement of regulatory compliance.
