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Block Chain Technology

Topics Covered:

  1. Awareness in the fields of IT, Space, Computers, robotics, nano-technology.

 

Block Chain Technology

 

What to study?

For Prelims and Mains: Blockchain technology- what is it? How it operates? Concerns and potential.

Context: The Tea Board of India is keen to harness latest technologies such as blockchain to help end-consumers track the supply chain of tea of Indian origin, by digitising Indian tea marketing channels.

 

What are Blockchains?

They 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.

 

How it operates?

  1. The technology allows transactions to be simultaneously anonymous and secure, peer-to-peer, instant and frictionless.
  2. 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.
  3. 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.
  4. 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.

 

Benefits of blockchain technology:

  1. As a public ledger system, blockchain records and validate each and every transaction made, which makes it secure and reliable.
  2. All the transactions made are authorized by miners, which makes the transactions immutable and prevent it from the threat of hacking.
  3. Blockchain technology discards the need of any third-party or central authority for peer-to-peer transactions.
  4. It allows decentralization of the technology.

 

Uses and possibilities of blockchain are:

  1. Confidential communication of cryptocurrency.
  2. Safe, cost effective and fast bank transactions.
  3. Secure legal documents, health data, notaries and personal documents.
  4. Distribution of land records and government financial assistance.
  5. Cloudstorage, digital identification, smart communication and digital voting.

 

Regulation in India:

The current debate in India has, unfortunately, focused too heavily on trading and speculation, looking at cryptocurrencies as an investment tool, rather than understanding the potential of core blockchain technology and the basic role of cryptocurrencies as an incentive mechanism to secure decentralized transactions.

  • Prevailing cyber laws in India touch almost all aspects of transactions and activities involving the internet, www and cyber space (IT Act 2000 and amended in 2008, section 463 of IPC, and section 420). But in today’s techno-savvy environment the world is becoming more and more digitally sophisticated and so are the crimes. India’s cyber laws are lacking in this respect.
  • There are sufficient global examples of countries that have taken nuanced and cautious steps in regulating the technology, and are focusing on stopping illegal activity without hurting innovation.

 

Sources: the Hindu.