Blockchains have been around for decades, but they're becoming increasingly important to the financial industry. For institutions that process digital transactions-brokerages, exchanges, and clearing firms in particular-blockchain technology plays a mission-critical role.

What is a Blockchain?

Smart Contracts

Imagine a car and a truck crashing in the middle of an intersection. Eight out of 10 witnesses say the car ran a red light. One witness couldn't be contacted. Another said the truck ran the red light. There's little doubt that the car ran the red light. This is the principle behind blockchain. It's a public decentralized transaction ledger that maintains a continuously growing list of records (blocks). Each block contains a timestamp and a link to a previous block. A blockchain keeps digital transaction histories secure by creating a zero-trust "consensus network," or a ledger of digital transactions shared by many computers to arrive at a consensus. A blockchain makes it virtually impossible for anyone to rewrite or alter transaction histories. If you're processing financial transactions in the current digital environment, you need this all-important layer of security.

Smart contracts are computer protocols which create a type of unbreakable escrow, eliminating the risk of others not following through on their commitments. Blockchain makes this more secure. Modulus Blockchain handles smart contracts, which control assets via a convenient scripting language based on JavaScript. Users may encode arbitrary state transition functions by writing logic in a few lines of code. The scripting language allows users to write logic for contract terms, events which occur when there is success or failure, and so forth.

Modulus Blockchain Features