Blockchain is a decentralized ledger system that stores data in blocks, which are linked to each other. It has the capability to generate new blocks automatically and with no interference from third parties.
The blockchain can be used to manage transactions and records digitally, without the need for a central authority or any intermediaries.
Blockchain can also be used in various sectors like finance, healthcare and many more like education and government services.
It is an encrypted database that distributes information across multiple locations or users with no single point of failure. This would make it difficult to hack the data which would give it an advantage over traditional databases that have a single location where all the information is stored.
Blockchain technology provides a trustless, decentralised way of recording transactions without any third party interface such as banks, governments or brokers involved. It has been known to provide a secure public ledger for digital currency such as Bitcoin and Ethereum, but it can also be used for other applications like digital identity management systems, supply chain tracking, solar panel electricity credits trading, health care records.
Evolution of traditional lending process
Blockchain has the potential to completely disrupt the lending process. This is because it offers a decentralized database that is very difficult to hack, which is often a problem with centralized databases.
Distributed Ledger Technology for credit risk modeling
Blockchain is a shared digital ledger, which provides an easy way to track data and transactions. It records all the transactions in a distributed database.
There are many benefits of using blockchain for credit risk modeling. It provides better transparency, reliability, and security than any other technology. This makes it more trustworthy than traditional databases that are managed by centralized institutions.