From bitcoin to block chain: how the new technology books mortgage industry transformation

From bitcoin to block chain: how the new technology books mortgage industry transformation

Runaway commentary Bitcoin: Although blockchain technology first and most well-known applications, but with the continuous progress of transformation and project development direction of each industry, application of block chain technology from simple encryption extended to many industry money. Including the current applications and most of the financial sector and sub loan process. Each country and company development in this direction has also been launched, some judicial institutions have started to pay attention to it in the financial industry and some potential must avoid the risk.

Translation: Annie_Xu

Most people hear the blockchain will think of bitcoin. However, the blockchain evolved into more technical tools unbelievable, many features of the block chain can be used in different industries, including mortgage loans. Block chain is stored in the ledger system to the center database, can contain multiple computers or the owner of a plurality of interconnected sections. With time stamp blocks will record together. It was originally used for the underlying technology bitcoin, an electronic money system. After January 2009, bitcoin released open source code, the block chain technology.

This technology enables the file storage and transfer process may not change, you can verify the existing process error less than. Block chain to the center can increase productivity, because all can enter the network at the same time, processing documents.

Block chain can bring what?

Block chain advantage, two is the most important network attack defense and document security, two of all mortgage loans is very important, can save millions of dollars.

First of all, in addition to simplify the work process, but also can reduce the cost of third party suppliers with automation. Second, the transparency of the block chain to achieve data storage. Block chain books entry is a time stamp block, that is impossible to modify the secret chain. Document management using the block chain technology, which can not be tampered with the data help to regulatory compliance tracking, the final data transparency can increase consumer confidence.

Another advantage to block chain is the document validation function can verify the data on the network belong here. When the data on the network, the document block using special Hashi series encryption, Hashi specific sequence must be matching network. If the sequence does not match the data will not be saved to block chain.

High block chain technology application, can be used in a variety of industries, including the need to use the payment and transfer, stock trading, voting, data storage security industry. These industries include legal, medical, insurance, car rental, car sales, network music, stock trading, supply chain management, storage, and mortgage loans.

Defective block chain

Although the blockchain provides many advantages, some factors must be taken into account, including the “51% attack” and the network energy consumption, supervision. Block chain default network security depends on the principle of network hackers can not be tampered with, unless they have attacked the most of the energy, which is also the 51% computer network, you can control the chain block.

For network thief, can log on to a specific block chain of computer storage of such data and records are not very valuable. Although it is not possible to attack the complete computer network, private chain certificate request node and login permission, the security layer increased. If the attacker have entered the network nodes and control of work force, these licenses and certificates to further increase the network login and control the blockchain difficulty.

In the 51% attack, most of the network is under attack, hackers can interfere with new block records. The intervention to prevent other users to complete the new block block chain, the chain monopoly network attacker block data input. Although this kind of attack is devastating, hackers need block chain operator is huge.

As for the energy consumption, requires distributed characteristic of network nodes location continues to provide computing power. Environmental researcher Sebastiaan Deetman said that the block chain network bitcoin where the energy consumption is probably small power output, energy consumption and other small countries to Denmark in 2020. The Deetman study further pointed out that the current consumption of the bitcoin network equivalent to 280000 U.S. households consumption.

Since the block chain is a new technology, currently there is no formal supervision right, however, have had a characteristic of the guidance, such as privacy and security, as well as its application deployment and management. The United States regulatory agencies, including the SEC and the Ministry of finance has said must monitor all risks related to the chain block and uncertainty, including network security and supervision.

The Treasury’s Financial Crimes Enforcement Network (Financial Crimes Enforcement Network) issued a guidance document in 2013, to discuss the Bank Secrecy Act (Bank Secrecy Act) application, block chain and virtual currency issue, trading and transmission regulation participants. Although the Consumer Financial Protection Bureau (Consumer Finance Protection Bureau) has not issued a statement on the blockchain application, but has warned consumers to consider the risk of bitcoin.

Time is one of the block chain network problems in the development of transaction processing, the block size is a MB, every ten minutes to dig a block. Limit block size and mining time means can only record seven transactions per second. The trading volume limit may be block chain network into the mortgage industry barriers. However, with the development of technology, greater storage capacity and computing power of mining block will add to the block by the industry chain more welcome.

The application of block in the mortgage industry chain

In the industry, the block chain can be used throughout the loan period, from the audit to the end of the service process. First, block chain allows the verification and tracking of documents, can correct data input and storage. These features capture the borrower in the loan period is more accurate than the traditional process of data points. So if the block chain technology is applied in the whole cycle, including loan application, implementation, service and auxiliary functions; so as to increase the accuracy and efficiency, simplify the process. However, the challenge is the complexity of infrastructure loans, including the diversity of industry participants, such as lenders, service providers, and other property companies.

Since the block chain process can prevent fraud and modify the data input error will be less. When the input data, each transaction by miners or single user authentication, they also went to the center of the network node control network from each block chain. Various algorithms can be used to verify the input and transaction in the transaction input error under the condition of not in the display block chain or error display these transactions. This function can immediately alert the user, whether these mistakes are unintentional or fraud, users can survey and error correction, and again in the area accurately input transaction information.

Another significant benefit blockchain is document verification. The verification process can determine the input block chain data really belong here. The principle is to set up a network in each block to hash sequence. When the subsequent blocks into the block chain, hash sequence must match in front of the block, otherwise the data will be input to.

In general, the blockchain applied to the mortgage loan process can bring more automation cycle in nature, reduce dependence on third parties, thereby reducing the cost of the loan. In addition the lenders will use internal methods for better control of the whole process, relying on third party intermediary will also lower. In 2015 Capgemini Group research estimates that if the block chain, according to the $200 thousand mortgage loans the average cost is $4350, each loan can reduce 480 to 960 dollars. The report cites 2015 data before the TRID loan law, TRID adds to the cost of each loan, lenders will be able to report in 2015 to save loan processing costs of $1 billion 500 million.

Market participants

Although the block chain concept for the financial and credit industry is new, some participants have begun operations. Factom, Mphasis, ThoughtMachine, HSBC, Context, Labs, Coin, Chain and other companies have started to open up the road.

Factor is committed to the mortgage industry data verification and audit solutions, so the development of Factom block chain, an open source network to the center of the public, companies use it to protect applications and data. Factom said the network can be used for auditing, data and system integrity, networking security protection (such as defense DoS attack), public infrastructure and test. Factom also provides audit and survey for data collection, can help the regulatory compliance, quality control and service.

Science and technology service provider Mphasis in India created the first solution Excellence Center block chain service and based on the key solution is based on a proprietary license type block chain. The first Mphasis center of excellence on multiple platforms were tested, and horizontal integration and financial services. The first case in the field of development across the trade financing, loyalty, mortgage, medicine, aviation and insurance. Mphasis has developed three cases for the mortgage industry: record loan application, verification documents, accounting fraud and found in Mphasis block chain.

ThoughtMachine said that in the development of Vault OS, a banking system provides end-to-end technology, can manage the loans, mortgages and other financial products. But the company said Vault OS system based intelligent electronic contract, this contract automatically performed by digital method can make the parties signed the contract, and put in the chain block encryption.

Many organizations are looking for new ways to use block chain. HSBC (HSBC) and China bank cooperation will block chain technology in property valuation services. JP Morgan (JPMorgan Chase) and Citigroup (Citigroup) completed the blockchain test, which is used to track the credit default swaps. Barclay and Santander joined the financial technology start-up R3, explore the different case handling payment and securities settlement.

Discussion the blockchain lawyer is the legal profession will bring benefits to attract, including verification and time stamp. For example, it can bring great benefits to the need to deal with the investigation and the burden of proof of litigation lawyers, especially because you can see who, when the landing of the block chain, and chain store what block.

Application of block chain in the world, including Chinese, India, Europe, America, middle east. The Dubai government announced recently launched the “Dubai block chain strategy” (Dubai Blockchain Strategy), and plans to use block chain technology in government documents management, make the government more efficient, also won the world’s leading position in the field of chain block.

Factom and the government of Honduras and the property rights of software company Epigraph cooperation. This cooperation aims to develop safe and permanent land property rights record system, hope to curb the governments land management corruption and failure.

The British government launched the blockchain contest, the purpose is to find the books distributed technology, increase production capacity and performance of the technology development company to set the highest reward 15 million yuan a pound.

Block chain rapid expansion in money, across many industries. The loan industry did not welcome the progress of science and technology history in other industries, but it finally seemed to be catching up, because of cost savings is irrefutable. The problem is with embrace technology development loan industry, whether the industry can make great progress, a good grasp of the new technology; the technical documentation in the loan period in the storage and transmission of the advantage has been recognized by the industry.

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