In the words of, Don & Alex Tapscott “The blockchain is an incorruptible digital ledger of economic transactions that can be programmed to record not just financial transactions but virtually everything of value.”
A block chain is a digitized decentralized, public ledger. It is an incorruptible digital ledger of transactions that can be programmed to record virtually everything of value
- Blockchain technology discards the need of any third-party or Central authority for peer-to-peer transactions.
- The technology allows transactions to be anonymous, secure, peer-to-peer, instant and frictionless.
- Rather than keeping information in one central point, multiple copies of the same data are stored in different locations
- Each list of record in a blockchain is called block. So, a blockchain is a continuously growing lists of records called blocks which are linked and secured
- On a blockchain, once a transaction is sent it is sealed and cannot be reversed.
APPLICATIONS OF BLOCKCHAIN TECHNOLOGY
- SMART CONTRACTS
- USE IN DIGITAL CURRENCY LIKE CRYPTOCURRENCY
- PERSONAL IDENTIFICATION
- SUPPLY CHAIN MANAGEMENT
- CROWDFUNDING
- GOVERNANCE
- EDUCATION
HOW DOES BLOCKCHAIN TECHNOLOGY WORKS
BLOCKCHAIN technology comes under lime light with rise in popularity of CRYPTOCURRENCY all over the world like BITCOINS, GRIDCOIN, LITECOIN, RIPPLE, NEXT, DASH etc.
WHAT CRYPTOCURRENCY SIGNIFIES?
- It is a tradable digital asset or digital form of currencies, built on blockchain technology that only exists online.
- Cryptocurrencies use cryptography (It is the science of secret writing with the intention of keeping the data secret) to verify and secure transactions.
- The major difference between cryptocurrencies and traditional financial models is in the decentralized nature of cryptocurrencies.
- This means is that when one spends a cryptocurrency, the approval of the transaction does not come from one central authority.
ADVANTAGES OF MODERN BLOCKCHAIN TECHNOLOGY
- It solves the problem of manipulation. It brings everyone to the highest degree of accountability.
- As a public ledger system, blockchain records and validate each and every transaction made, which makes it secure and reliable.
- Blockchain in-based systems allow for the removal of intermediaries involved in the record keeping and transfer of assets.
- Data entered on the blockchain is immutable, preventing against fraud.
- It allows decentralization of the technology.
CHALLENGES FACED BY BLOCKCHAIN
- There is no confidence in the technology it is still an innovation. Building trust in the network represents a challenge for blockchains.
- High costs and complexity of blockchain.
- Lack of understanding comes next as many executives have a vague understanding of blockchain and changes it will bring.
- Vague data regulation in countries due to poor laws and policy is one more issue.
INDIAN EFFORTS ON BLOCKCHAIN TECHNOLOGY
- NITI Aayog has built a platform called ‘Indian Chain’
- NIC has set up the Centre of Excellence(CoE) in Blockchain Technology in Bengaluru, Karnataka.
- Andhra Pradesh has become the first state in INDIA to adopt Blockchain for governance
- Yes Bank has adopted the Blockchain technology to fully digitize vendor financing