Scaling up Banking Operations: Harnessing the power of block chain Technology

© 2023, IRJET | Impact Factor value: 8.226 | ISO 9001:2008 Certified Journal | Page 796
Scaling up Banking Operations: Harnessing the power of block chain
Technology
K. Syam Prasad1, G.M. Vema Reddy2
1,2 JNTUA College of Engineering Pulivendula, Dept. of Computer Science Engineering, Andhra Pradesh, India
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Abstract - The Blockchain is an encrypted database that is
distributed across numerous computers and serves as a
virtual record of transactions and contracts. This
technology supports bitcoin transactions and has already
upended the financial industry. Since blockchain technology
has the potential to improve data security, provide a
decentralized and transparent network, and lower
operational costs, the goal of this study is to examine how it
can affect the financial industry. Blockchain's extraordinary
properties make it a potential technology for determining
the financial sector's future despite its limits. Blockchain
technology makes sure that payments are made
autonomously and transparently, preventing any fraudulent
activity.
Keywords: Blockchain, Decentralized, Smart contract,
crypto-currency
1. INTRODUCTION
Blockchain technology is a decentralized peer-to-peer
network composed of a series of blocks, hence its named
as blockchain. Satoshi Nakamoto first developed and
implemented this concept in Bitcoin, and it has since
piqued the interest of researchers, with its characteristics
increasing its applicability. Blockchain is also known as
distributed ledger technology, which preserves the
calculation of all nodes in each block, ensuring that the
ledger is shared and reliable within the network.
Additionally, each block contains a unique and
unchangeable value called a hash code, which is derived
using a complex mathematical hash function, ensuring
immutability. Moreover, transparency is ensured by these
reasons, and as transactions do not occur in the
traditional manner with individual real user IDs and
addresses, both the sender and receiver can remain
anonymous. The absence of a central authority also makes
the entire system somewhat autonomous . These factors
have made blockchain an emerging technology that can be
applied in various fields. The implementation of
blockchain technology has the potential to eliminate
unnecessary intermediaries, resulting in cheaper and
more efficient services for both clients and financial
institutions. The areas where banks and other financial
organizations are likely to adopt blockchain include
payment systems, customer identification, loan
processing, and credit protection. Blockchain technology
is still in its early stages, but it is increasingly seen as a
solution that can provide a significant advantage in the
context of the transfer of assets within business networks.
Satoshi Nakamoto introduced a new method for peer-
to-peer digital cash, using a cryptocurrency called Bitcoin.
This was a significant development, as cryptocurrencies
are not created or controlled by governments, and have
their own set of rules to follow. This type of organization
has given rise to the new blockchain technology, which
forms the basis for the growing number of authorized
blockchain applications. Blockchain technology allows for
the exchange of money without intermediaries, enabling
people to send money directly and securely without any
hassle. It is one of the most promising and revolutionary
inventions, attested to be as significant as the internet or
electricity. Unfortunately, few people have heard of the
technology, but significant social media coverage is
helping to raise awareness. It is one of the most promising
and positive new technologies for the coming era, an
distributed ledger technology that underpins Bitcoin. It
offers a new way to record, preserve, and transfer data,
and what's even more incredible is the transparency and
secure data that is auditable and resistant to tampering.
Many people assume that blockchain and Bitcoin are
the same thing, but they are closely related but not the
same. In 2008, Bitcoin was introduced as a form of
unregulated digital currency created by Satoshi
Nakamoto. Blockchain was the ledger solution used to
safely record and facilitate the use of this new currency, as
there was no bank or government involved to monitor or
police the transactions. The confusion between
blockchain and Bitcoin often arises because these two
concepts were introduced at the same time. The
blockchain technology used for Bitcoin allows for the
recording of transactions on a distributed ledger across a
network of users. The open-source technology allows for
the storage of transaction data into blocks. Each block
contains a time-stamped record of transactions, with each
block linked to the previous one, thus creating a chain
[10]. The information stored on the blockchain is entirely
transparent and permanent, with no ability to change or
remove previous transaction data from the distributed
ledger. This feature and solution can be used to address
many inefficiencies in different applications and
industries.
International Research Journal of Engineering and Technology (IRJET) e-ISSN: 2395-0056
Volume: 10 Issue: 10 | Oct 2023 www.irjet.net p-ISSN: 2395-0072

2. BACKGROUND AND RELATED WORK
2.1 Working of blockchain
Blockchain technology has the potential to
revolutionize our systems of trade, identity, and
governance by increasing transparency. Every transaction
that occurs is recorded in a distributed, immutable ledger,
also known as a blockchain. This ledger is shared and
stored in multiple locations, removing a single point of
failure, and providing transparency across all participants.
Once a transaction is agreed upon and attached using
cryptography, it is nearly impossible to go back and
change the past records.
For a new transaction or edit to be added to the
blockchain, a majority of the nodes within the blockchain
implementation must execute algorithms to assess and
verify the information. If a majority of nodes agree that the
information and signature are valid, the new block is
added to the chain. This distributed consensus model
allows blockchain to run as a distributed ledger without
the need for a central authority.
Each page of transactions in a blockchain forms a
block, and each block is linked to the next through
cryptographic hashing. Before a block can be added to the
chain, a cryptographic puzzle must be solved, creating the
block. The computer that solves the puzzle shares the
answer with all other computers on the network, a
process called proof of work. The network then verifies
the proof of work, and if correct, the block is added to the
chain. This combination of complex math problems and
verification by multiple computers ensures the
trustworthiness of each block on the chain. By removing
the need for a central authority, blockchain allows for
real-time direct interaction with data.
Blockchain technology can be classified into two
categories:
i. Public Blockchain:
This type of network, also known as a permissionless
blockchain network, is completely open-ended, and
anyone can participate without requiring permission [9].
The only significant difference between public and private
blockchain networks is that anyone can join the
permissionless network, perform the consensus protocol,
and maintain the shared open public ledger.
i. Private Blockchain:
A private blockchain network requires an invitation to
participate in the network, either through the network
initiator or by following the regulations/conditions set by
the network initiator. A permissioned blockchain network
restricts access to participants who meet specific criteria
required by the network.
2.2 Blockchain and Crypto-Currency are not the
same thing
Blockchain serves as the platform that facilitates the
use of cryptocurrencies. It is the technology behind the
distributed ledger that documents the network and
enables the transfer of value and data.
Cryptocurrencies are the tokens used within
blockchain networks to transact and pay for services.
They can be seen as a tool or application of blockchain
technology and can be used to digitize the value of assets.
While cryptocurrencies are an essential part of the
ecosystem, blockchain serves as the underlying
technology that enables their use. Transactions involving
cryptocurrencies can only occur on a blockchain network,
which provides a means to record and transfer them.
3. PROPOSED WORK
In this section, the proposed work is elaborated at a
high-level scope. Blockchain technology has the potential
to transform not only financial services, but many other
industries as well. While traditional financial systems are
heavily reliant on paper and vulnerable to issues such as
fraud and delays, blockchain technology offers increased
security and efficiency. Blockchain's dynamic nature
allows it to become a leader in implementation in a
chargeable market situation. The advantage of blockchain
technology is that it provides a shared database that is
accessible to all parties involved.
3.1 Things blockchain can do for the financial
sector
In the financial sector, blockchain can offer several
benefits, including:
a) On-chain settlement:
The proposed system can provide a platform for banks to
reduce fraud and offer on-chain settlement to users,
reducing processing time and eliminating the need for
centralized confirmation of transactions.
b) Low transfer fees:
The proposed platform will have a transparent cost model
for sending money cross-border, eliminating
intermediaries, and reducing transaction costs for users.
c) 24/7 Availability:
The platform will be always accessible from anywhere in
the world, with nodes in the distributed network verifying
transactions and completing processes quickly.

d) Transparency:
The proposed platform will have a transparent
conversion rate visible to users, allowing them to view
transaction history and conversion rates with ease.
Fig-1: Benefits of using Blockchain
3.2 Proposed Working of Platform:
The platform proposes that every bank registered on the
blockchain network must update the encrypted customer
data in the ledger to ensure data security. All banks on the
platform will share the same ledger, ensuring
transparency and transaction history. This model based
on distributed ledger technology will ensure 24/7
availability and reduce transaction processing time.
Verification of transactions by every node present in the
network will eliminate the problem of double spending
present in centralized systems. The platform will provide
on-chain settlement with minimal transaction costs.
Fig-2: Banks on Blockchain Platform
When a user initiates a money transfer, the
proposed platform will offer various benefits over the
traditional centralized system. The registered banks on
the blockchain platform will interact with each other
through the shared ledger. Users can only send money to
other users registered on the platform, with all their
information stored in the distributed ledger.
The user initiating the transfer will have complete
transparency for the transaction and will only pay
negligible fees. The funds will be available to the recipient
once more than 75% of the nodes in the network verify
the transaction. Additionally, the platform's availability
will allow users to send money overseas without visiting a
physical bank. The transaction will be subjected to a
consensus mechanism carried out by the network's nodes.
Compared to the centralized system, the proposed
platform will have the advantage of immutability, which
reduces the possibility of fraudulent conversions.
3.3 Benefits of the proposed platform:
The proposed platform offers a single database for user
information, reducing the need for multiple KYC processes
by different banks. The process of transferring money will
be automated, resulting in faster transaction times, which
will be beneficial to users sending money to any part of
the world.
Fig-3: Transaction made through proposed platform
4. SYSTEM DESIGN
The entire system design is divided into two parts
namely the diagrams and the implementation. The
description of each step is given below.
4.1 UML Diagrams:
Unified Modeling Language (UML) is a widely
accepted and standardized modeling language used in the
field of object-oriented software engineering. It is
managed and created by the Object Management Group
with the aim to provide a common language for creating
object-oriented software models. UML is composed of two
major components - a Meta-model and a notation, and in
the future, a method or process may also be added.

UML is not limited to software systems, but also used
for business modeling and other non-software systems. It
incorporates best engineering practices for modeling
large and complex systems, making it a crucial component
of object-oriented software development process. UML
uses graphical notations to represent the software project
design.
i. Usecase Diagram
A use case diagram is a type of behavioural diagram in
the Unified Modeling Language (UML) that is created
from a use-case analysis. Its purpose is to provide a
graphical representation of the system's functionality,
including the actors, their goals (represented as use
cases), and any dependencies between those use
cases. The main objective of a use case diagram is to
illustrate the system functions that are carried out for
each actor. The roles of the actors in the system can
also be depicted.
Fig-4: Usecase Diagram
The above use case diagram represents that the
system contains multiple use cases and three actors
namely user, bank admin and Blockchain server
admin.
ii. Class Diagram
A class diagram is a static structure diagram in the
Unified Modeling Language (UML) used in software
engineering to depict a system's structure. This
diagram provides a visual representation of a
system's classes, their attributes, operations or
methods, and the associations among the classes,
including which class stores the information.
Fig-5: Class Diagram
The above class diagram contains classes named user,
Block chain server, bank account, transactions, self
deposit,View balance and transfer. Each class contains
its own attributes and operations.
iii. Sequence Diagram
A sequence diagram is an interaction diagram in the
Unified Modeling Language (UML) that depicts the
interactions and ordering of processes. It is based on
the Message Sequence Chart construct and is also
known as an event diagram, event scenario, or timing
diagram.
Fig-6 : Sequence Diagram for Registration and Login

Fig-7 : Sequence Diagram for Transfer
Fig-8: Sequence Diagram for Self Deposit
Fig-9 : Sequence Diagram for Check Balance
iv. Activity Diagram
An activity diagram is a workflow or process
modeling diagram that is part of the Unified Modeling
Language (UML). It provides a visual representation
of the sequential flow of activities or control in a
system or business process, and is particularly useful
for illustrating complex workflows, software
processes, and organizational processes. An activity
diagram consists of nodes and edges. The nodes
represent activities, actions, or decisions, while the
edges represent the flow of control or the transition
between activities. The nodes are linked by arrows
that indicate the direction of flow.
Fig-10: Activity Diagram
5. Implementation
The platform is developed using python language. To
implement the system we had first installed the python.
We used the TRUFFLE ETHEREUM tool and DJANGO
SERVER to run our blockchain application.
The system is developed in such a way that many
users can register and login to the website and can
perform the following operations:
Deposit Amount : The website contains the link to add
amount to user’s self account
View Balance: The website contains link to view his
balance, link again to view his current balance
Send Amount : The website contains the link to
transfer amount to another user
The more detailed implementation is described in
results section with proper screenshots of website
activities.
6. RESULTS AND OBSERVATIONS
In the proposed system we have developed an online
website platform where users can register and login to
use the services of banking using blockchain. The
following are the results and observations of the proposed
system.

Fig-11: Home page
The above figure is the landing page of the website which
includes the options for sign up and login.
Click Sign Up button to see the below page where user can
register with platform by providing necessary details.
Fig-12: Sign Up page
Fig-13: Login Page
Fig-14: Welcome page after Login
Fig-15: Self Deposit Page
Fig-16: Send Amount Page
Fig-17: View Balance Page with history of transactions
7. CONCLUSIONS & FUTURE SCOPE
Although blockchain technology is widely seen as
having similar potential to early commercial interest, it is
crucial for banking firms to understand its key features
and how it can address current business issues. While the
internet enables the exchange of data, blockchain allows
for the exchange of value. Banks must identify
opportunities, assess feasibility and impact, and test
proof-of-concepts. However, questions regarding
regulations will have to be resolved through discussions
with competent regulatory authorities and the
incorporation of their thought processes. We will also
research how to provide off-chain settlement for banks
not registered on the platform. One possible solution is to
access their database with permission, enabling further
transactions to take place between listed and non-listed
banks so that both can maintain an equal ledger.

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