Understanding How Blockchain Technology Can Be Used To Process Checks

By Author: Maria Lopez
Total Articles: 5
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For the last few years, the blockchain concept has been getting a lot of attention. It has moved beyond the small group of people who love Bitcoin and into the wider conversation about money and trading. It's possible to use smart contracts in this blockchain technology to get a job or run a business.

The Blockchain method was suggested to be used in an e-voting way with security concerns in order to fix problems. The idea of voting-based platforms was a good one. At the same time, a synchronised user identity model and a way to leave the system were made and used on the Linux operating system. Blockchain technology is an adulterated ledger that uses cryptographic algorithms to keep it from being changed. Two input statements with the same Hash or tag are made. This is how it works. Today, we'll see how the experts in the blockchain field have come up with a way to process checks.

There are many ways to process checks with Blockchain technology.

Using IPFS Blockchain Technology, ...
... you can make a decentralised app.

In this method, there are three algorithms that are used to clear checks. Let's look at how those algorithms work.

1. An algorithm

This method, called IPFS, mostly talks about how someone can use the cheque image in IPFS by giving some credentials. It's important to use a unique peer ID after the file is added to the IPFSP place. A hash will follow. This hash is a big part of the document. It is the main thing that people need to know about it. You can even share this Hash with your friends. You can even do this.

2. An algorithm

The suggested method shows how to share IPFS keys in a safe way. The document's hash key is called the Content Identifier or CID, which is also called the KEY. The CID is what people usually call the "key." The key can also be encoded and sent to other peers in IPFS using different ways. The encoded key is decoded and used by the receiver to get to the data.

3. An algorithm

Only nodes that have been approved are subject to process checks. In smart contracts, inputs like the Ethereum personal network's private hash key and the document's KEY Hash are used to make sure the cheque is real. They then make transaction information with metamask and approve the transfer if the cheque is valid for forwarding processing.

By using blockchain technology, cheques can be cleared.

This method will show how blockchain technology is used to clear cheques.

One of the first steps.

The issuer uses a bank app that has a personal e-wallet for each user. The QR code is made and the Blockchain is checked. If you write down a check, it turns into a soft copy of the check that the bank has. The issuer makes a QR code and checks the e-cheque with keys. After that, the QR code in the cheque is sent to be checked.

2. The next step.

If the QR-enabled Cheque (Account information) is legit, the issuing bank stores it in the blockchain's block with the hash values that were made. The recipient is told where the block is so that they can carry out the next steps.

It's number 3.

Beneficiary banks must check the QR code on the check to make sure it is real. This is the first level of security. The second layer of security uses two-factor authentication, which is done by making P and P' and comparing them to AT, or Authentication Token.

The fourth step is done.

After collecting the Authentication Token, the Blockchain system checks the account information and balance, then deducts and transfers money, and sends messages to both the sender and receiver.

A few things to keep in mind about this method: Let's check them out.

1. A better consensus method than POW is used to solve the scalability problem. However, the method requires the use of a bank teller system, which is not good. The time it takes to react and the safety of the person are not given any thought.

Second, the QR code, a two-step authentication verification method, and a 60-second One Time Password are used to make sure that the automatic verification and confirmation process works. However, the payment method has a lot of delays in paying people. If the link throughput isn't enough or the transmission time is too long, the check won't work. ToTP BS automatic verification gets more police attention as more operations are put in a queue for the police to check. At the servers, a better way to move data needs to be found.

Conclusion

So that was all about today's subject. During the last few days, we have seen how blockchain developer have been working for banking sectors. The good news is that blockchain developers have already come up with a few ways to clear checks. But we've also found some big flaws in this system. Blockchain experts, on the other hand, are working hard to fix the flaws in it. People who want to learn more about blockchain technology can go to a training course.

Blockchain Enthusiast and Result-oriented Technology expert with 10 years’ experience in education & technology roles.