1.1 Introduction
Financial tracking is the practice of keeping track of one's income and spending on a daily basis. It is accomplished by recording receipts, invoices, and business expenses into some type of accounting ledger. It complements budgeting and is a useful tool for keeping track of business finances. A Blockchain is a distributed database that is shared among the nodes of a computer network and makes use of cryptographically signed transactions. It operates in a blockwise manner, with each block linked with a cryptographic system. This ledger technology is made up of several nodes on the network that receive, store and record data, and because these nodes on the network are distributed and decentralized they therefore have to agree on the data that will be stored and recorded on the blockchain (Adam, 2022). One of the most important components to blockchain is this idea of group consensus, and even though it might appear odd, blockchain is a very inefficient system. A blockchain-based system should be decentralized, trust less, collectively maintainable, reliable and anonymous.
As a prelude to other parts of this study, this chapter will discuss the background upon which this study was initiated, the statement of problems that led to this study, the Aim and Objectives of the study. Others are Significance of the study, Scope of work, Limitation of the study and Definition of technical terms.
1.2 Background of Study
In recent years, the use of different channels for banking and financial services has changed the whole way bank customers and their banks interact. With the increasing popularity of the internet, more and more industries are seeking ways to utilize this popular medium in an effort to keep up with the changing technological preferences of their customers. The possibilities of the internet are seemingly endless and the banking industry has decided that it will not be left behind. While most people have at least heard of online banking, the majority of them have probably not tried it yet. Maybe it’s because we find more comfort in working with real people and real paper when it comes to money matters rather than performing transactions in the seemingly impersonal universe of the World Wide Web. A number of authors and experts have defined e-banking services as a contemporary facility that provides conventional bank products and services through a new medium.
It is entirely automated facility based on IT delivery mechanism to conventional banking users’ products and services. It provides online medium of conducting and providing various banking services, such as, online accessibility of bank account, online fund transfer facility, online bills paying facility etc. According to Abu Shanab et al. (2010), internet has transformed the entire business pattern for people as well as for businesses. Although, technological advancements are happening everyday but not every advancement has been welcomed and adapted by financial sector; but financial sector that enjoying advantages of this new mode of service delivery, has adapted the e-banking phenomenon from its introduction only.
The blockchain technology has emerged as one of the advanced technologies used in carrying out online financial transactions. (2020), described that blockchain is a decentralized communication and data management solution that is just budding and needs no trusted third party. Without recourse to a central authority, various parties can provably transact on the technology even though they do not trust themselves. Blockchain technology introduces digital immutable ledgers that guarantee data integrity. Also, blockchain stores this ledgers in peers or nodes that ensure availability. Coupled together with existing authentication techniques will ensure unauthorized access to the data stored in the blockchain is not permitted.
The blockchain, initially associated with virtual currency, has quickly gained prominence in different other areas of life. Without the need for a controlling entity, transactions can be initiated and validated on the blockchain. This features its unique selling point. To this end, studies have identified blockchain technology as possessing the potentials to address the problem of fraudulently banking transactions adequately. Hence, this study intends to develop a block chain based application for tracking of financial transactions.
Blockchain technology is one of the newest, hottest and most intriguing technologies currently in the market. The technology is capable of providing a secure, transparent, and efficient processes for Entrepreneurs, startup companies, investors, global organizations and governments. Block Chain technology is a digital ledger which uses bit coin or other crypto currency to conduct transactions which are recorded chronologically and publicly. The technology, which can be described as a diary is difficult to forge. The block chain is definitely a resourceful invention that has grown significantly in use with an estimated market size of over 540 Million Dollars in 2018. Block chain was conceptualized and distributed by Satoshi Nakamato in 2008.
The technology is capable of holding a secure history of data exchanges, use a peer-to-peer network to time stamp and verify each exchange, and can autonomously be managed without a central authority. This constitutes the backbone of digital currencies such as Bitcoin and Ethereum. It is expected that as the technology is widely accepted the decentralized Block Chain system will impact positively on the way business is transacted and managed and also transform banks, financial institutions, and other firms.
1.3 Statement of Problem
Investigation revealed that most online financial transaction software relies on applications that make use of various database technologies. With the increased traffic of transactions, frauds such as card skimming, card theft, have increased excessively in recent years (Gichungu & Oloko, 2015). This particular problem is now affecting the new online channels and indirectly affecting customer experience and business for banks and agents alike. As a result of the above problem, this study intends to develop a block chain based application for tracking of financial transactions in order to ensure Maximum financial security.
Block chain technology has not been legally accepted in Nigeria even though it is currently being propagated among the people and in the social media. The Central Bank of Nigeria (CBN) has public warned Nigerians to beware of investments in crypto currencies, stating that virtual currencies are not accepted legal tenders in the country. This lack of government support constitutes a major setback to the growth and acceptability of the technology.
1.4 Aim and Objectives of the Study
The aim of the study is to design and implement an Organization Financial Tracking System Using Blockchain Technology. In achieving this aim, the following specific objectives were laid out as follows:
- To develop an application that will use blockchain technology to track financial transactions by enabling secure data storage in online transactions database and curb fraud;
- To implement this platform using bitcoin on the blockchain for financial tracking;
- To design a cloud based fault tolerant platform for the blockchain; and
- To test the efficiency of the solution against the proof-of-work mechanism using some standard metrics (power consumption, cost evaluation, memory consumption, resource utilization and CPU usage).
1.5 Significance of Study
The research will assist in developing an application that will be used by organizations (particularly banks) to transact on the banking platform securely using blockchain technology. There are many cases whereby there has been loss of customer account data and consequently has costed the organization heavy legal fees and fines. The proposed system will help in addressing such problems.
This study will provide relevant data for the effective formulation and implementation of policies to enhance the realization of envisaged objective. This study will be of immense benefit to other researchers who intend to know more on this study and can also be used by non-researchers to build more on their research work. This study contributes to knowledge and could serve as a guide for other study.
1.6 Scope of Study
The scope of the research is focused on design and implementation of an Organization Financial Tracking System Using Blockchain Technology.
1.7 Limitations of the Study
During the course of this study, many things militated against its completion, some of which are:
- Time Constraint: The time frame given to accomplish this project was very short due to school academic calendar and it was carried out under pressure which made the researcher not to implement some necessary features.
- Research material: availability of research material is a major setback to the scope of the study.
- Frequent power failure: This made the researcher append more money on fuel to ensure sustainable power.
- Financial Constraint: Insufficient fund tends to impede the efficiency of the researcher in sourcing for the relevant materials, literature or information and in the process of data collection (internet).
