By Mr. Sarvesh Joshi and voice-over by Mr Sumangal Haldar
When the world’s second-richest man Elon Musk tweeted “You can now buy a Tesla with Bitcoin”, the tweet sent social media into a frenzy. The tweet was followed by a thread, where he explained the reasons behind it.
We have heard many times about the term “Bitcoin”. Bitcoin is just one of the many crypto currencies which are there in the market. Past few years, its valuation has grown leaps and bounds. As per data provided by Morningstar for Currency and Coinbase for Cryptocurrency, the value of 1 Bitcoin equals 39,74,985.98 in Indian Rupees.
Most of the cryptocurrencies work on the concept of Blockchain Technology. So, today’s blog post entails the concept of Blockchain technology.
As per Wikipedia, “A blockchain is a growing list of records, called blocks, that are linked using cryptography. Each block contains a cryptographic hash of the previous block, a timestamp, and transaction data (generally represented as a Merkle tree).” How it works is something we can have a broad overview. It all starts with one node, which has an owner. At the node transactions are issued and a ID is assigned to it. Each such node has a shared ledger, and many nodes form a peer network. Users can submit their transactions through the interaction between these nodes.
To simplify it further, if we have to transfer money from person A to another B, so normally we would need a central server (a bank) to transfer it. But, blockchain removes that intermediary. Infact the term “block” here means “digitally stored information” and “chain” means a “public database”. In a blockchain, if a person makes an online purchase then instead of your name, your digital signature would be stored. This technology is not just path-breaking but has been subject to many controversies as many drug-peddlers have used bitcoin for illegal transactions.
For now, cryptocurrencies are banned in India. But due to its unique technology interface, blockchain offers a lot of future scope not just in banking but in other fields as well.
One of the used cases of blockchain would be in healthcare. All the hospital records, whether it is related to medicine or patients data, can be compiled in a secured central database using blockchain. In fact the logistics data can also be prevented from cyber threats if we apply blockchain in it. The digital media data, which includes Intellectual Property Rights (IPRs), royalty payments would also benefit as there would be transparency in the transaction to artists and copyright infringement would also be avoided due to a secured blockchain system. The education sector would further be aided as examination paper leak problems would be avoided due to blockchain.
Just like any other technology, it has its perils as well. All the illegal transactions can be done using blockchain as the digital signature of the end-user or the source is virtually impossible to track.
In my opinion, despite having some demerits its use cases are too good to be subsided. If this technology is implemented after some test runs, then we can simplify a lot of problems in healthcare, education, Defense and Aviation and Banking.
The author is an analytics professional presently working in an E-Commerce startup