The World Bank has launched a blockchain-only bond. The so-called bond-i—for “blockchain operated new debt instrument” and perhaps also for Sydney’s famous Bondi Beach—is a two-year bond that was arranged by Commonwealth Bank of Australia and raised 110 million Australian dollars ($80 million.)
Investors included several Australian banks and state treasuries. Arunma Oteh, the World Bank treasurer, mentioned in a statement the additional help of King & Wood Mallesons, Mark-it, Microsoft and Toronto Dominion Securities.
The World Bank, whose bonds carry an AAA rating, regularly uses its borrowing power to help develop new bond markets as well as pioneering new means for selling and trading the securities. It issues between $50 billion and $60 billion a year of bonds to back economic progress in developing countries.
Australia is a popular test site for market developments because of its well-established financial infrastructure and the familiarity of international investors with the Australian dollar, which is one of the most-traded currencies in the world.
Blockchains are a new data structure that is secure, cryptography-based, and distributed across a network. The technology supports cryptocurrencies such as Bitcoin and the transfer of any data or digital asset. Spearheaded by Bitcoin, blockchains achieve consensus among distributed nodes, allowing the transfer of digital goods without the need for centralized authorization of transactions. The present blockchain ecosystem is like the early Internet, a permissionless innovation environment in which email, the World Wide Web, Napster, Skype, and Uber were built.
The technology allows transactions to be simultaneously anonymous and secure, peer-to-peer, instant and frictionless. It does this by distributing trust from powerful intermediaries to a large global network, which through mass collaboration, clever code, and cryptography, enables a tamper-proof public ledger of every transaction that’s ever happened on the network.
A block is the “current” part of a blockchain which records some or all of the recent transactions, and once completed, goes into the blockchain as a permanent database. Each time a block gets completed, a new block is generated. Blocks are linked to each other (like a chain) in proper linear, chronological order with every block containing a hash of the previous block.
As a public ledger system, blockchain records and validate each and every transaction made, which makes it secure and reliable.
All the transactions made are authorized by miners, which makes the transactions immutable and prevent it from the threat of hacking.
Blockchain technology discards the need for any third-party or central authority for peer-to-peer transactions.
It allows decentralization of the technology.