To a Decentralized Future: Benefits that Blockchain Could Endow the Financing World

The initial appearance of blockchain technology has brought about profound changes in the financial area. Researchers have discovered that the advantages of blockchain can be used to address the drawbacks of traditional centralized financial systems. Existing papers focus on three main aspects: the technology introduced by blockchain, such as DLTs and Smart Contracts; the unique advantages of blockchain, such as trustworthiness, security, and efficiency; finance-oriented potential applications of blockchain, including both current applications and future challenges. To gain a comprehensive understanding of blockchain’s application in finance, the document conducts a systematic review of existing papers on the advantages, risks, and applications of blockchain. The document firstly shows the prominent superiority of blockchain from three aspects including trustworthiness, efficiency and cost reduction. Then the document discusses the main obstacles to the application of blockchain which mainly exists in scalability and permission protocol changes. At last, the document briefly describe the road for blockchain to implementation from both present and future perspectives. In summary, while there are both advantages and challenges in the application of blockchain in finance, continuous efforts are being made in blockchain research.