Blockchain Technology in Financial Transactions: Addressing Challenges in Security and Scalability

Abstract

Originally developed for use with bitcoin transactions, blockchain technology has quickly become a game-changing tool for improving the safety, openness, and effectiveness of a wide range of financial processes. It has great promise for resolving pressing issues in the financial industry, including as data integrity, transaction delays, and fraud, thanks to its cryptographic characteristics and decentralised structure. Despite blockchain's many advantages, security and scalability concerns have prevented its widespread use in the financial sector. financial transactions using blockchain technology, particularly its effects on scalability and security. blockchain technology's advantages, which include the capacity to facilitate quicker and more transparent cross-border transactions, the provision of secure, tamper-proof transaction records, and the reduction of fraud risk. In addition, blockchain faces significant obstacles that limit its scalability, including network congestion, high energy consumption, and transaction speed. Additionally, it delves into possible remedies for these scaling problems, including sharding, consensus methods, and second-layer technologies. While this research does acknowledge the need for additional development and integration to fully realise blockchain technology's promise of revolutionising the financial industry, it ultimately demonstrates the technology's promise of meeting the increasing demands of the sector.