Decentralized Banking System on Ethereum Blockchain

Abstract

Banking is the backbone of the financial sector of our times. Financial sector is one of the main facilitators in the progress of our society. The world we see today would not have been possible without the banking system. But the banking system currently has a centre dependency. CORE (Centralized Online Real-Time Exchange) banking has major disadvantages like single point of failure, power and authority for planning and decision making rest with top management organized around a hierarchical structure, dictatorial & inflexible. Decentralized/Distributed banking is the need of the hour as it gives anonymity, low/no interest rates, no single point of failure, power to the masses. It is resilient, inherently democratic and efficient. Crypto Banks are decentralized banking platforms that provide the usual services similar to centralized banks, primarily lending services and credit scoring. But it essentially cuts out all of the middlemen that a centralized bank uses. There is no centralization whatsoever. The employees needed in a centralized bank to structure financial data and approve loans are replaced in a crypto banking ecosystem by smart contracts and p2p, peer-to-peer, services. Since all issues can be solved online, most of the network will be online. The bank is moulded in the form of a computer interface, whether on a desktop or a phone, and the currencies dealt with are mostly cryptocurrencies. In this project, I have created a smart contract on Ethereum blockchain that functions as a bank. It covers basic banking operations - creating new accounts, adding/withdrawing money, giving interest to the account holders, showing balances. I used Solidity programming language to write the smart contract and wrote a few tests in Javascript. To test the smart contract, I used Remix IDE. The project gives an idea of how crypto banks work in a real-time environment.