The use of blockchain as a technology to track financial transactions could be one of the most disruptive innovations to the financial industry for decades.
A group of researchers at the University of Michigan has taken a stab at developing a tool that would allow blockchain experts to conduct research on financial institutions.
According to the report from the U-M’s Blockchain Research Institute, blockchain could be used as a data warehouse for financial data, such as contracts, audited financial statements, tax returns and financial statements of foreign companies.
It could also be used to identify fraudulent transactions and identify transactions that are likely to be fraudulent.
“It’s a powerful technology that’s going to be really transformative,” said Mark Pimentel, a senior lecturer in computer science at U-m.
“We’ve seen it used for real-world data storage for a while.
We need to be able to harness that and use it for our research.”
While blockchain is a data storage system, it’s not yet a data analytics system.
The researchers are hoping that blockchain will be able, through its utility as a tool for data analytics, to allow the data to be easily accessed and analyzed, according to the paper.
Blockchain is a distributed ledger that allows for the transfer of information without the need for a central authority, Pimentels co-author and graduate student Joshua Gant said in a statement.
“We’ve been building a database of thousands of financial documents that we use to manage our business, to track our company, to identify our customers, to manage the risks we take, and so on,” Gant added.
Gant and Pimentell were part of a group of U-Mich students who designed the project and used the technology in a research paper.
They have published their paper in the Journal of Banking and Finance.
“Blockchain has a lot of promise as a system for managing and managing data, but there are some limitations that we’re trying to address in this project,” Gants said.
“For example, we don’t know exactly what kind of transactions will be included in a blockchain record.
We don’t even know how to get a blockchain from scratch.
We just know that the information in a record will be consistent across records.”
The paper’s researchers focused on two of the major types of blockchain records that are currently available to financial institutions: contracts and audited reports.
The first type of blockchain record is called a “contract,” or a document that is created and signed by the parties involved in a transaction.
In order to create a contract, a contractor can use a digital signature, which is unique to each transaction.
The second type of record is a “audited report,” which is a document created by an outside party, such an accountant or auditor.
The audited report is used to verify the validity of the information included in the contract.
“In order to understand how these two types of records could be useful, we’ve been using them in a series of papers and we’re hoping to use them to understand whether they are complementary or not,” Pimentells co-founder and executive director of the Blockchain Research Initiative, Adam Furlong, said in an email to ABC News.
“The first thing that we found is that they’re not complementary, so we wanted to find a way to combine them and see if we could make them work together.”
Furlong and his co-authors wanted to use blockchain for their research because it’s a system that can be used by any type of organization, from small companies to large companies, he said.
According a U-Michigan statement, the team has already begun working on its project and is in the process of securing funding.
“This is a collaborative project between the U of M, U-Mass-Amherst, UMass-Dartmouth and U-Miami and is funded through a research grant from the National Science Foundation (NSF) to explore how blockchain might be used for research,” U-mi’s statement read.
The team has been working on the project for two years, with the goal of developing a product that would be easy to use and allow financial institutions to track the financial transactions of their customers.
In the future, the researchers will be developing tools to help financial institutions track the transactions of all their customers, according the statement.
The paper is the latest effort to address blockchain as an important research tool.
The research paper is published in the journal PLOS ONE, the same journal that published a similar paper in February titled “Blockchain as a new technology for data science.”
The researchers have developed tools to analyze financial transactions, including contracts, and to detect fraudulent transactions.