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Insights into Editorial: Blockchaining India’s digital future


Insights into Editorial: Blockchaining India’s digital future


block chain



Blockchain has been a buzzword for some time now. In addition to private companies and banks, blockchain has attracted interest from within the government as well.


What are Blockchains?

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 authorisation 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.


How this operates?

  • 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 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.


How is it different from current systems?

Blockchain technology allows for instant recognition of the exact size of the block by all transacting parties in the chain since the block is simultaneously updated on all their databases, and has unique security features that do not allow tampering with the definition of the block.

  • In addition, each block’s movements across the chain have the ability to be verified by all parties in the chain since the block carries with it the digital imprint, or ‘signature’, of wherever it has been.
  • Therefore, it creates instant trust without having to rely on a series of trustworthy banks to clear cheques. Here, various parties transacting regard their reputation as being more important than reneging on it. Unlike traditional banking system, cash transactions here are undertaken immediately.


Benefits of blockchain technology:

  • 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 of any third-party or central authority for peer-to-peer transactions.
  • It allows decentralization of the technology.


How blockchain can be used in public administration?

Blockchain has the potential to optimize the delivery of public services, further India’s fight against corruption, and create considerable value for its citizens.

  • By maintaining an immutable and chronologically ordered record of all actions and files (“blocks”) linked together (“chain”) in a distributed and decentralized database, Blockchain creates an efficient and cost-effective database that is virtually tamper-proof. By doing so, blockchain promises to create more transparent, accountable, and efficient governments.
  • In addition to creating a more efficient government, blockchain can also help create a more honest government. A public blockchain, like the one Bitcoin uses, records all information and transactions on the decentralized database permanently, publicly, and most importantly, securely. By allowing governments to track the movement of government funds, blockchain can hold state and local actors accountable for any misappropriations.
  • Blockchain not only deters corruption through accountability, but it can also do so by bypassing the middleman entirely. Earlier this year, the World Food Programme began testing blockchain-based food and cash transactions in Pakistan’s Sindh province. Refugees in Jordan’s Azraq camp are now using the same technology, in conjunction with biometric registration data for authentication, to pay for food.
  • With Aadhaar cards becoming nearly ubiquitous in India, adopting blockchain could be the next logical step in India’s pursuit of becoming a digital economy. Blockchain can play an important role in storing individuals’ data, helping conduct secure transactions, maintaining a permanent and private identity record, and turning India into a digital society.


Concerns associated:

Blockchain is still a (relatively) new technology and is not without its problems. For a start, there are ongoing concerns about privacy in the settlement and storage of securities – blockchain providers are working hard to address.

Banks are also at threat with blockchain, since more and more firms (using their IT service providers from India and elsewhere) will build systems that can create and exchange ‘blocks’ with one another completely legally, without ever having to use the banks as a financial intermediary.



Blockchain, however, is not a panacea. While it can help enhance the delivery of government services, it cannot replace an inefficient system. Although it can deter corruption by making governments more accountable and transparent, it cannot prevent the entering of false information into the network. Yet, it presents the government with a powerful opportunity. By embracing blockchain, it can create a bureaucracy that focuses on innovation and experimentation, a government that seeks to maximize efficiency and governance, and an economy sustained on the promise of technology. Blockchain’s applications in the public sphere, however, have yet to catch the eye of the Indian government. This is baffling; the technology is not only promising, but has even begun to be utilized by governments globally.