ABSTRACT
Blockchain is a new approach to database management predicated on many features such as decentralization, trust, the immutability of records, and the consensus mechanism. Bitcoin was the first application of Blockchain technology but it has now many more potential applications in finance, business, government, and other sectors. However, this chapter focuses on this technology and its application in the financial markets. This study collects data through a review of recent literature on the Blockchain and recognizes how it works, its applications, and its benefits and challenges. The study reveals that Blockchain has various applications such as smart contracts, digital currencies, and the issuance of bonds and stocks. The literature shows that the Blockchain provides its users with many benefits such as cost reduction, fostering liquidity, speeding transactions, enhancing trust and traceability, and reducing fraud. However, distributed ledger technology is still in its nascent stage of improvement and development and is facing many challenges such as achieving consensus, the requirement of regulations, interoperability and standardization, confidentiality and privacy, scalability, and vast power consumption. On this basis, this chapter further investigates these challenges and potential solutions and points out various captivating future research directions.
