Blockchain Technology

Blockchain is a digital, decentralized, distributed ledger that keeps a record of all transactions that take place across a peer-to-peer network. It is an interlinked and continuously expanding list of records stored securely across a number of interconnected systems. The prerequisite for each transaction to be added to the ledger is the consensus of the network participants (called nodes), thereby creating a mechanism of control regarding manipulation, errors, and data quality.

• It provides immediate, shared and completely transparent information stored on an immutable ledger that can be accessed only by permissioned network members.

Key Elements of Blockchain

• Near Real Time: Blockchain enables the near real-time settlement of recorded transactions, removing friction, and reducing risk.
• No Intermediary: The technology is based on cryptographic proof, allowing parties to transact directly without the need for a third party. It enables confidence in data integrity and reduces opportunities for fraud.
• Distributed Ledger: The P2P distributed network records a public history of transactions. It is distributed, highly available and preserves the proof of the transaction existence.
• Irreversibility & Immutability: Blockchain contains certain and verifiable record of every single transaction which prevents duplication, fraud, abuse, and manipulation of transaction. No participant can change or tamper with a transaction after it has been recorded to the shared ledger.
• Smart Contracts: To speed transactions, a set of rules — called a smart contract — is stored on the Blockchain and executed automatically.

Applications of Blockchain Technology in Various Industries

Blockchain technology can be utilized in multiple industries which are as follows-

• Financial Services: It simplifies and streamlines the entire process associated with asset management and payments by providing an automated trade lifecycle where all participants would have access to the exact same data about a transaction.
  • By eliminating third party intermediaries and overhead costs, there is a great potential to reduce costs. Transaction time is also reduced with the use of Blockchain.
• Healthcare: Blockchain can play a key role in the healthcare sector by increasing the privacy, security and interoperability of the healthcare data. It eliminates the interference of a third-party and also avoids the overhead costs. The healthcare records can be stored in distributed databases by encrypting it and implementing digital signatures to ensure privacy and authenticity.
• Governance: It holds the power to transform Government’s operations and services. The linking and sharing of data with Blockchain enables better management of data between multiple departments. It improves the transparency and provides a better way to monitor and audit the transactions. Thus, it can curtail the challenge of data leakage, and bring transparency in the system.
• Retail: It can help in ensuring the authenticity of high value goods, preventing fraudulent transactions, locating stolen items, enabling virtual warranties, and streamlining supply chain operations.
• Travel and Hospitality: It can be applied in money transactions, storing important documents like passports/ other identification cards, reservations and managing travel insurance, etc.
• Education: Student records, faculty records and educational certificates can be maintained with the application of Blockchain technology.
• Public Safety and Justice: Blockchain could make the delivery of public safety and justice more efficient by resolving the problem of inter-agency coordination.
• Agriculture: It can be used to increase transparency, reduce complexity and cost in food-based value chains by linking the farmer to the consumer. It can be used to record and manage agricultural land records as well as agriculture insurance and loans.
• Civil Registration: It can help to simplify the civil registration process by creating distributed citizen registration platforms and even register vital events such as births and deaths making citizen records tamper-proof.
• Defence: Information regarding defence infrastructure and computer systems is critical to national security. Blockchain technology can be leveraged to provide consensus-based access for modifying data and distributing access over multiple system resources such as networks, data centres and hardware equipment.
• Energy: It can be deployed to create a marketplace for electric power supply. Using smart meters, a record of produced and consumed electricity for each user in the grid can be maintained on a Blockchain.
• Smart Cities: There are a number of areas in the realm of smart cities where Blockchain can have significant impact– citizen participation, public grievance system, employment, health, education, land use, housing, transportation, energy and many other aspects.

Issues and Concerns

• Lack of Awareness: The lack of awareness and understanding of the Blockchain concept and how it works are the key challenges in the adoption of Blockchain in the mainstream.
• Nascent Technology: Resolving challenges such as transaction speed, the verification process and data limit will be crucial in making Blockchain widely applicable.
• Performance: Because of its inherently distributed, peer-to-peer nature, Blockchain-based transactions can only complete when all parties update their respective ledgers – a process that might take hours.
• Unavoidable Security Flaw: Cryptography is not 100% secure due to which security concerns could also slow Blockchain adoption.
• Anonymity: Accessing a Blockchain account requires a key. This key is a long combination of numbers and letters and is nearly impossible to guess. Thus, anonymity on platform can lead to terror funding, money laundering, etc.
• Decentralization: Due to Blockchain's decentralized nature, a central authority is not checking for malicious users and attacks. As public Blockchains are not controlled by a third party, a false transaction enacted by a hacker who has a user's private key cannot be stopped.

It is important to explore all the intricacies of the Blockchain technology to its fullest before its implementation in governance, industries, services, retail, etc. However, with the on-going researches and explorations happening in this space, the world will soon realize the massive potential of this technology and it will drive a new wave of decentralized applications in several sectors.