A Transparent Privacy-Preserving Digital Currency System for Central Banks Using Custom Blockchain and Unspent Transaction Outputs

Blockchain is a decentralized ledger or distributed database that is most frequently used for safe transactions and digital currency exchange. The ledger, which is accessible to all network users, is updated with each new transaction. All of the previous transactions are compiled into the Blockchain ledger. The Blockchain ledger is an ever-expanding, impenetrable data structure made up of blocks that store batches of distinct transactions. In chronological order, the finished blocks are added. Bitcoin and blockchain technology have had a huge impact on the world in the last ten years, and it's safe to conclude that this trend will continue, especially because so many individuals are putting in endless effort to eliminate the numerous barriers preventing blockchains from becoming widely used. The high processing and electricity expenses associated with the Proof-of-Work consensus technique are one such drawback. Banking systems can transition from their conventional approaches to a digital, distributed ledger that is immutable and can be implemented through Blockchain thanks to constantly changing technologies. A distributed, peer-to-peer connected structure called blockchain technology can help with the maintenance and recording of transactions in a banking system. Properties like transparency, resilience, appropriateness, and security are offered by blockchain technology. With the help of blockchain technology, this article seeks to provide these features in a distributed banking system that is comparable to existing approaches. The constraints of blockchain implementation and its potential future scope will also be covered. Although it is more decentralized and provides higher security than the proof-of-reputation protocol, the alternative proof-by-approval protocol that we suggest in the proposed work is less efficient and more difficult to set up.