Cord Blood

As you all know, the umbilical cord is cut at the time of birth of a baby and is usually thrown away. Cord Blood is the blood that remains in the umbilical cord after it is cut. Research has shown that cord blood is a rich source of stem cells - the building blocks of blood and immune system. Stem cell can reproduce into other cells like the red blood cells which carry oxygen throughout the body; the white blood cells which fight infection and platelets which are necessary to clotting for clotting. 

Medicine is discovering new uses of stem cells ranging from treatment of cancers to other blood related diseases.

Importance of Stem Cells
Stem cells are the building blocks of your blood and immune system and reside primarily in your bone marrow. There are three known sources of stem cells: Bone Marrow, Peripheral Blood (the blood that circulates throughout your body), and Umbilical Cord Blood. Stem Cells are the "mother cells" that lead to the production of all the various types of cells in the blood. 

Stem Cells are the only genetic match for a child and genetically closer to other family members than unrelated stem cells. Stem Cells cryogenically stored at birth protect them from subsequent exposure to bacterial, viral and other effects. In the later years, if a backup blood/immune system is needed due to damage by chemotherapy or other environment factors, the stored stem cells become a backup system as these being cells that have not aged or affected. For example chemotherapy and radiation destroys cancer cells in patients. However they also destroy stem cells. Therefore, an infusion of stem cells is done after chemotherapy/radiation treatment. The stem cells infused reach the bone marrow where they reproduce to create new blood and immune system for the patient.
The stem cells found in cord blood have some unique qualities. It is found that cord blood can restore bone marrow even when the recipient/donor type match is not as close as that necessary in bone marrow transplants. Successful cord blood transplants between siblings have been performed with only a "half-match." Thus Cord Blood provides a genetically unique sample of a family's blood. Storing it after the birth of a baby has been likened to taking out a "biological insurance" policy for the family. Even if the baby never needs to use it, the sample can be used by other family members--or even strangers--who have a blood type match
Cord Blood is superior to Bone Marrow on account of various factors. Collection of bone marrow is invasive and can be painful. It needs many insertions to extract the marrow from the donor's bones with a needle and syringe. This is a lengthy process requiring general anesthesia and also is expensive. Cord blood transplant patients may have a higher survival rate, a higher quality of life after transplant and less frequent hospitalization due to fewer complications such as Graft vs Host Disease (a condition when the transplanted stem cells recognize the recipient's body as foreign, and therefore reject it). This makes the overall cost of cord blood transplantation less than traditional bone marrow transplants

Banking and Donation of Cord Blood
Banking or Donation of Cord Blood by parents is a valuable effort in ensuring this resource is available either for the general good or specifically for the child or sibling in case needed in future. Take for example, if a child develops cancer in the early years, his or her cord blood might contain diseased cells. In such a case, the first choice for a donor source of stem cells generally would be from a sibling (or sibling's cord blood, if it was banked). But if the child needed a transplant later in life, the cord blood would be an appropriate source of perfectly matched stem cells.
Collection and storing of cord blood requires skill and precision. As such cord blood banks are far and few and mostly in advanced countries. 
Very few people decide to bank their babies, cord blood expecting to actually use it, and most people will never have to use the cells. People choose to bank their babies, cord blood in order to provide themselves and their families with an additional safeguard-just in case. If a patient has no family history and is not in an area of environmental concern, the overall risk is relatively low. However you bank cord blood for using them in time of dire need. 

However a word of caution. Transplant physicians argue that the chances that the blood will be needed within the family are remote, and they worry that the private banks banking Cord  Blood will diminish the supply of cord blood for transplants to unrelated recipients. Hence Cord Blood donation needs to be encouraged.