Blockchain technology refers to a series of data linked together. It is the backbone of bitcoin and other cryptocurrencies. It allows digital information to be distributed but not copied. It is a simple way of passing information from A to B in a fully automated and safe manner. One party to a transaction initiates the process by creating a block. This block is verified by thousands or probably millions of computers distributed around the net. The verified block is added to a chain, which is stored across the net, creating a unique record with a unique history.
A blockchain is a time-stamped series of immutable records of data that is managed by a cluster of computers not owned by any single entity. Each of these blocks of data (i.e., block) is secured and bound to each other using cryptographic principles (i.e., chain). The blocks have unique identifier codes called hashes that connect them to the previous and the subsequent blocks, forming a blockchain in the form of a continuous ledger of transactions.
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The blockchain network is not owned by any individual; it has no central authority—the information in it is open for anyone and everyone to see. Hence, anything that is built on the blockchain is transparent and everyone involved is accountable for their actions. The series is managed and stored across computer systems. Each ledger is shared, copied, and stored on every computers connected at the system.
Benefits Owing to its benefits like eliminating middlemen, providing data security, reducing corruption, and improving the speed of service delivery, this technology is increasingly becoming popular in the retail, manufacturing, and banking sectors. The transparency and security it offers are plus factors and the reason why cryptocurrency has become popular.
Security Changing the details of one record causes the hash of that block to change disconnecting it from the next one and so the latter’s hash undergoes a change, and further disrupting follows. As the data is stored on multiple systems if the details are changed on one system, it will have other systems to retrieve that data.
Companies may want to adopt the technology to improve user experience and enhance transparency. It is expected that data relating to banking transactions, land records, and vehicle registration may be moved to the blockchain platform in the years to come.
Hurdles in Adoption of Blockchain Gradual adoption of the technology has been envisaged owing to factors like lack of regulatory supervision (there have been wild fluctuations in value of cryptocurrencies, for instance). The open nature of the technology in the sense that data is shared and stored on multiple systems and it is not owned by any one person or group implies that everyone can adopt it. This is the reason why governments dislike the idea of the blockchain. There are problems of scalability data protection, speed of transactions, and integration of the technology into existing financial systems. Governments may also introduce legal and regulatory conditions in its use. The Indian government, for instance, in 2019, constituted a panel to look into cryptocurrencies that even while acknowledging the potential in blockchain technology, has called for a ban on non-official digital currencies.
This technology can be useful in maintaining government data related to public transactions, like the buying and selling of property, details of vehicle registration, and those of hallmarked gold jewellery. For example, if land records are shifted in a blockchain, then each subsequent buying or selling can be recorded as a block that can be publicly accessed. Corruption can be checked and governing land records can be easier. Likewise, hallmarked gold jewellery can be shifted on a blockchain ledger that is an open source, which can be maintained by jewelers and be open for view for consumers.
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