Block chain as a technology to increase trust and reduce transaction costs in the financial sphere

Abstract

© 2019, Institute of Advanced Scientific Research, Inc.. All rights reserved. The approach to the block chainas to only a new technology regarding which security many questions arise seems rather narrow. The experience of using block chain in the financial sector shows the wide possibilities of this system to significantly reduce transaction costs by increasing the level of trust between economic agents who use it for transactions. The level of trust in the use of block chain in the financial sector is increasing due to the ability to ensure the reliable verification of assets (property, capital), storing transaction records, ensuring reliable data storage, and reducing costs. Trust is a factor determining the level of transaction costs in the economic system and, ultimately, the effective functioning of the economic system, the prevailing forms of business organization and business processes in it. Trust is a component of social capital and it has a stimulating effect on the effectiveness of a national economy. As cross-country comparisons show, countries with a higher level of trust show higher GDP and investment growth. Thus, the block chain acts as a factor in increasing confidence and, on this basis, the growth of macroeconomic indicators, in particular, GDP, the share of investments in GDP.