Blockchain and smart contracts.
Blockchain technology grows at a rate of knots. Enthusiasts say that in case of active development of contracts technology based on online data storages and chains of blocks, within next 10 years the bearer would be unable to enter his house if he misses to pay his credit. How would this happen? It's pretty simple - there exists a record somewhere in blockchain that nominal Bob took a house credit from Mary and failed the monthly payment. The door lock also connected to blockhain won't open with Bob's card as soon as required entrance condition is absent.
Such a business activities form will become possible with so called "smart contracts". These kinds of deal will soon transform the society life. Smart contracts idea belongs to Nick Szabo, who has represented it in 1997. Possible he has also created Bitcoin as the user with name Satoshi Nakamoto, but it's not for sure. How this idea is formulated? Nowadays, contract execution is guaranteed by the law and the level of trust between parties. Whether second is clear, the legislation also isn't so precise, as soon as it's articles are often misinterpreted. Lots of space for unpunished violation remains in traditional form. Another thing is the deal which execution is controlled by a software with a smoothly running algorithm - it wouldn't cause any doubts.
What to do with a source reliability?
Information security is the key point alongwith access to huge database containing information about deal and confirming it in this way. The major past problems has been linked with this, especially with data transfer. Blockchain became a solution. It's pretty hard to give an explanation for this term, but if simplified, you can liken it to an account book, that stores the data about all financial operations performed in the net in digital form. Hereby information is distributely stored, i.e. every user has it's copy. Such method makes data counterfeit intrusion extremely difficult, and yet it have happened, it's found out easily.
So if we have such a reliable data source, then there's no need to rely on today's companies that are involved in information storage and this outdated model will soon become useless. Blockchain technology is already running and attracting an interest of a larger number of effective enterprises. Thus, Barclays says that such technology will turn the world around and it's unacceptable to miss a moment to become on of the first ones who masters it.
Modern financial system hasn't changed a lot for the previous 50 years and still in such financial operations like international wire transfers require the services of a large number of intermediaries who have their own interests and work methods. As a result total fee reaches 10% or more. Owing to blockchain these intermediaries will become useless due to the direct transfers between accounts, hereby the software guarantees the transfer accuracy. The cost price of the transaction will be just miserable and comparable to the price of electricity spent by user to process a block. Transaction speed will grow thousand times and will last just a few seconds. Banks are already trying to master and apply the distributed net technology and the biggest of them will join it soon.
Blockchain and information technologies.
Smart contracts implemention in banking system brings the crypocurrency disclaim, either Bitcoin or its forks. That's why the BTC community is suspicious about companies interested in blockchain. However the most of them are optimistic as soon as these companies are likely to create a new internet.
There exist arguments against blockchain also: lack of one standard applied for evaluation data source security, potential to control the data as well as impossibility to estimate the trust of software.That's why it's hard to say whether distributed networks would become the basics of future financial system as it is predicted by ones or they would be totally forgotten as the others tell. But still it's clear that current system needs to be changed.