Blockchain Technology Has More To It Than Cryptocurrency

The rise and rise of Bitcoin valuation has everybody talking excitedly about the technology that makes cryptocurrencies like that possible. This has shifted attention from the enormous impact that this technology is beginning to have in a whole array of areas that may have nothing to do with digital currencies like Bitcoin.

Before we delve into what those seminal changes might be, we have to get a handle on something called a smart contract, which is a central premise of the blockchain technology. The term itself describes a technology that has the ability to substitute legal contracts with digitization and automation. This would cut down delay in successfully carrying out transactions that is the norm in conventional contacts. The moment a delivery would happen a payment would get made.

These days smart contract has come to denote the software that makes computation on blockchain possible. That brings us to what blockchain itself is. To the uninitiated it can be described as a widely distributed and highly decentralized ledger which has been cryptographically secured. Each block within the ledger is referenced to the previous block and all the approved transactions, since that approval.

Now this transaction may pertain to myriad things. Everything from government, logistics, and education to healthcare, manufacturing and energy can leverage the properties of blockchain technology to obtain unprecedented enhancement in scale and efficiency. It is estimated that the adoption of blockchain technology across industries will add value to the extent of trillions of dollars in the next twelve years.

Let us look at the ways blockchain technology could prove to be a major disruptor in the near future:

1. Decentralized Cloud Storage- Even though we all store a lot of our vital information on the cloud, the fact is that we are queasy about handing control of important aspects of our lives to another entity. You always worry about how your data might get compromised and misused.

Blockchain data storage will resolve that problem in one fell swoop. No longer will any single entity be the sole custodian of all your data. Besides, the level of security will be a lot higher in the case of blockchain data storage on account of the very nature of the technology. This is because multiple copies of every transaction exist on multiple computers making hacking impossible.

2. Digital Security- Everyone knows that digital security is a huge issue worldwide. This is something on which billions of dollars are being spent annually. Blockchain technology can provide a secure way of carrying out all manner of digital transactions. If for instance, banks were to adopt blockchain technology, their customers could receive a secure digital ID rather than have accounts opened in their name. What’s more, only they would have access to both the details of the account and the funds therein. Even the banks would not possess the ability to access their customers’ funds!

3. Transformation Across Sectors- The application of blockchain technology across sectors is only a matter of time.  Take the case of the real estate sector where there is a lot of opacity in the transactions. Often the records are inaccurate due to mistakes or fraud. Plus there is loads of paperwork. Blockchain technology can comprehensively cleanse the system of all these problems. With very little paperwork involved and the documents becoming easily verifiable with regard to their accuracy, issues pertaining to transfer of title will be a thing of the past.

Healthcare institutions like hospitals can share vital information across their networks without in any way compromising the sensitive data being conveyed. Similarly blockchain technology can make the voting system faster, more accurate and extremely secure.

What On Earth Is Cryptocurrency?

There is a buzz around the term cryptocurrency these days and apparently the most popular kind of this strange new currency goes by another esoteric term- bitcoin! But what on earth is cryptocurrency and what the devil is a bitcoin? For all the news that is being generated about cryptocurrency and bitcoins, one would imagine that there would be many who would understand what the fuss was all about.
Here in India, there is even more confusion about the whole hoopla surrounding bitcoins. Ever glued in to news about newer ways of getting a fair return on their investments middle class India has begun to look at bitcoins with a fair amount of interest and curiosity This is largely on account of the fact that one hears so much about the fantastic returns that one makes by investing in this new age wonder.
But ask someone if they know what these terms signify, chances are you will draw a bank. For all they might know this could be currency that settlers on Mars might use. After all wasn’t their talk of settling people on Mars?! This kind of abysmal ignorance about cryptocurrency is not restricted to India. An overwhelming majority of people around the world don’t have a clue either.
So let us try and understand the nature of the beast over here and try and gather a basic understanding of what one means, when one says cryptocurrency. A lot of people think that cryptocurrency is a form of digital money and they are bang on. Add to it the fact that it is extremely secure and anonymous, you begin to understand its allure.
The way it works is that it leverages  the power of the Internet by using cryptography that helps transform legible information into a codified one, with which to track any purchases or transfers. As many would know cryptography has its origins in the secret method of communicating by code that was evolved during the Second World War. The digital era has seen it transform further into a foolproof method of online security that encompasses not just data, but communications and money as well.
Bitcoin was the very first cryptocurrency and was launched back in 2009. Being the first off the block it soared in value from zero value in January 2009 to more than $11,000 in November 2017! No wonder everybody wants to know more about cryptocurrencies. It is not surprising therefore to discover that there are more than a 1000 cryptocurrencies available on the Internet.
Understanding Cryptocurrency
 If one were to define or explain cryptocurrency you could call it a process which entails making limited entries in a database that cannot be altered by anyone unless certain specific conditions are fulfilled. If you think that there is nothing extraordinary about this, think again.
This is exactly how real money functions.  The money in one’s bank account is represented by certain certain specific entries in the bank’s database that can be altered only when certain basic conditions are met. Money is basically  a verified entry in some kind of an accounting database.
A similar principle operates in the case of  the databases of a cryptocurrency. Take the case of  bitcoin where every member network of peers keeps a record of the entire transaction  and balances pertaining to every account. There is a seven stage process that explains the entire cryptocurrency concept and how it functions.
1. Someone makes a transaction request which travels via a P2P (peer to peer) network of computers, which is called nodes.
2. The network of nodes validates both user status and the transaction.
3. The verified transaction now becomes part of all the other transactions, thereby  creating a new block of data in the ledger.
4. The new block becomes a permanent and unalterable part of the existing block chain
5. There is a complete transaction.
Cryptocurrency has certain unique characteristics that make it new and revolutionary-
1. It does not possess any intrinsic  value and as such cannot be redeemed against any commodity which has that kind of value.
2. Unlike conventional money cryptocurrency is entirely digital and does not have a physical form.
3. Unlike conventional money, the supply of cryptocurrency is not regulated by any central bank with its network being totally decentralized.
In India though there is heightened interest in cryptocurrencies, most people are extremely wary of investing in these till the time that the concept becomes better understood and more mainstream. Though the Reserve Bank of India has not banned cryptocurrences outright, it has cautioned people against trading and creating virtual currencies because of the inherent risks involved.
However more than cryptocurrency it is the block-chain technology that has the conventional banking sector interested as it can be used for functions other than creating cryptocurrency. These include tracking of ownership and origin of documents, physical and digital assets and so on. ICICI Bank actually went ahead and used block=chain technology to execute India’s first banking transactions on block-chain.
As for cryptocurrencies, notwithstanding all the hype surrounding it, most Indian investors would likely steer clear of investing in it until such time the concept of cryptocurrency has official sanction. A more or less similar wait and watch approach has been taken by governments and investors worldwide.
There are some leading voices who herald the ushering in of the era of cryptocurrency as the dawn of a new world financial order, while many others think of it as an inflated bubble waiting to be burst. Clearly one will hear a lot about both cryptocurrencies and bitcoins till the debate is settled one way or the other.