By Virat Singh
We are witnessing an era of rapid change, and wider replacement. There is a positive (but not so visible) correlation between convergences of technology and business. This is exponentially disrupting all ‘sacred’ business models.
The disruption is largely driven by a remarkable progress and enhancement in the domain of artificial intelligence, block chain & machine learning, akin to the dawn of the industrial revolution.
One of the biggest trends in the technology industry over the past year is blockchain, and its use in the cryptocurrency space. Over the year, there has been research on blockchains to make them safer and cheaper, and as such allows them to be used across different and other sectors.In a few more years, we can expect to use blockchains in much of our technology and help both the Indian public and private sectors.
We are just beginning to reap the benefits of some of technologies that started just as.In the beginning, and even years after its inception the internet, it did not offer much benefit to the average person. However, now the internet is a crucial part of many of our lives. Email is another case in point.
Similarly, the initial stages of blockchains may not offer much benefit to us or our economy at first, but when we use this system for a longer time, its benefits will become much clearer and will become an essential part of our lives.
A blockchain is a structure that can safely, quickly, and permanently record a transaction between two or more users. In short, a blockchain is a chain of individual units called “blocks.”
Each block in this chain contains a data value, a unique “hash” value derived from this data, and the hash value of the previous block in the chain. This way, a change in the data of one block will then change the block’s hash, and will render the entire chain compromised, as the subsequent block will point to a now invalid hash.
Once this happens, the system knows the data has been tampered with and it back-calculates the last valid chain. This way, any breach in security can be effectively detected as the whole chain will be corrupted. This method of constructing a hash from the data makes the entire process extremely fast as well.
The uses of blockchain are numerous. Although most of us think the widest use of this is to create cryptocurrencies, the underlying technology has since been improved, and it can now be used for multiple other functions.Multiple organizations have started to facilitate their own cryptocurrencies on their platform.
Facebook is currently developing a cryptocurrencyusing blockchains to handle payments being made on their Messenger service.Mobile payment company Venmo is doing the same, so if Indian corporations like Paytm want to compete in overseas markets, they will need to invest in blockchains as well.
In fact, the most obvious use of blockchains is in these payments, and particularly the banking industry as that is what it was originally designed for. Many of our own banks would do well to employ blockchains in their services. For a start, this would speed up their back-office settlement systems, reducing operation costs.Because Blockchain are light-weight, they are faster than current banking systems.
They can optimize other banking operations like asset registries, regulatory reporting, and post-trade processing services. Furthermore, blockchains will allow immediate transactions through borders, as opposed to the current system of up to three business days.
The improvements in blockchains have also led to the creation of smart contracts. The rippling effects of blockchains imply that it is possible to create a legal and credible contract without the involvement of any third-parties.
This will enable having quicker legally binding agreements of any magnitude, be it small bets with friends or large-scale purchases between two corporations. In India, a system like this would be very effective for the work of both individuals and organizations, and in fact can even be used within organizations to streamline their operations.
The underlying technology of blockchains can also be used extensively for record-keeping, because a blockchain is built to secure information and access it quickly and safely.
Hospitals can use blockchains to keep the medical records of their patients confidential, and patients can also use the technology to share these records with providers of their choice while ensuring the security and keeping control of these records.
In this same way, blockchains can also be used by the government for securely storing sensitive information, such as an individual’s identity, Aadhaar number, criminal history, and also their vehicle registration, voting history, benefits imbursements, and so on.
Due to the distributed and digital nature of blockchain, it reduces corruption and fraud and makes the process more transparent, and also eliminates the need of storing physical paper logs of this information, which is prone to theft and damage. In fact, the Andhra Pradesh state government is already implementing this system in Visakhapatnam, but as these are early days, results have not been substantiated yet.
This implies that all of a citizen’s records will be stored in a fully secure network which minimizes any middle-man intervention, and any changes to these records can be fully tracked.
With this, there is potential to eliminate property fraud completely. In fact, if this system is streamlined, then it is possible for these records to be built automatically on the purchase or registration of property or vehicles, further reducing human intervention.
The construction of these blockchain-based systems would be a large immediate expense, but the benefits to the citizens and consumers cannot be overstated. People will have the convenience of online fund transfers and payments quickly and anywhere.
Blockchains would also bolster security of individual records, which is currently a massive problem for India. Overall, both the government and private corporations should start developing a blockchain system now, if we want to enjoy the benefits of this in the next decade.
It would be effective to construct a smaller, “proof-of-concept” network which employs these same functions among a smaller community. This way, we can see the effects of these Blockchain systems in a real environment, and also identify problems before hand and work towards solving them first, before making this a nation-wide reality.
In the evaluation of any technology the one criterion that matters above any other is: how will it change the way we live. Ultimately the ‘wow and the‘magic’ of any invention is measured by the answer to this gloriousquestion.
Virat Singh is research assistant and pursuing computer science program, University of Wisconsin-Madison