The Blockchain Technology - Making the World Go Round

Vishal Gupta, CEO, Search TradeIn the virtual world, what we hear most often today are these two terms - Block chain and Bitcoin. There are regulators working around these and financial institutions issuing cautionary warnings against their use. But do we understand the technology behind these terms? Let’s begin with understanding Block chain: in simple terms block chain is a shared public ledger that contains every transaction ever processed, allowing a user’s computer to verify the validity of each transaction of the virtual currency. 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. Each time a block gets completed, a new block is generated. There is countless number of such blocks in the blockchain which are linked to each other (like a chain) in proper linear, chronological order with every block containing a hash of the previous block.

To make it even simpler, we can say that block chain is like a full history of banking transactions and Bitcoin is the equivalent of cash on internet that one transacts in. Bitcoin transactions are entered chronologically in a block chain just the way bank transactions take place. Blocks, meanwhile, are like individual bank statements. Infact,Blockchain is the technology behind Bitcoin and all other cryp to currencies. How ever, its usage is not restricted to only virtual money but anything of value – money, titles, deeds, music, art, scientific discoveries, intellectual property, and even votes – can be moved and stored securely and privately. The system is so cleverly coded that cheating is next to impossible; rather it helps build trust between strangers and ensures integrity.

Blockchain as a technology is super smart, and is applicable to industries across sectors because of which, in literal sense, it is making the world go round!

Benefits to governments - Government departments that work in silos and have no or little inter– connectivity and no common shared platform cause the exchange of information to be delayed, negatively impacting citizen services. Also,common issues that citizens have is that there is lack of clarity in government functioning. With blockchain technology, linking data between departments will become easier and every data will get recorded on one platform, which will enable real time data exchange, faster services and genuine records. Maintaining tax records will also become simpler and tamper-proof.
And when government records are genuine tracking their expenditures,eliminating fraudulent transactions, reduced errors in data processing and faster service delivery could all become a possibility. And this could simply increase the trust factor in the public’s view.

Block chain technology,distributed across multiple data centres,offers security against attacks on important network and hardware equipment by ensuring consensus-based access for modification.

Healthcare: Healthcare industry is growing at a tremendous pace owing to its strengthening coverage, services and increase in expenditure by public as well private players. In India alone the total industry size is expected to touch US$ 160 billion by 2017 and US$ 280 billion by 2020. It is one robust industry which thrives on data, extensive research and health records. But unfortunately, healthcare record systems are fragmented, preventing doctors and patients from building a complete repertoire. Records are often spread across different facilities and providers in incompatible databases. These discrepancies cause huge financial losses to the sector and governments across the world. Blockchain could be the possible technology which, due to its efficient data mining feature help the industry save, both, health records and money. It can also help in making it more secure, efficient, and interoper able including decline in fraudulent activities.

Threat to financial scammersthere are groups who build fake financial products world wide to cheat people of their money. Numerous Multi Level Marketing and Network marketing companies that promise unreal returns to investors are mushrooming in the markets, who only believe in trapping uninformed investors into their schemes. With block chain technology such products mutual funds, insurance, retirement plans and the like can get tracked and regulated. Once all financial institutions begin to work on block chain backed data maintaining system, such frauds will get reflected faster and this can also improve customer engagement by providing a greater degree of transparency and perceived fairness of tariffs and claims handling. Cap gemini, in one of their reports mentioned that consumers could save up to $16 billion in banking and insurance fees each year through block chain-based applications.

Defence: for most countries, their defence infrastructure and records are the most crucial documents that need to be safe guarded. Unauthorized access or modification of critical operating systems and network could seriously compromise national security. And most often the information is distributed across different locations. Block chain technology, distributed across multiple data centers, can ensure security against attacks on important network and hardware equipment by ensuring consensus based access for modification.

These are just a few examples of industries which could make use of the revolutionary technology and the list does not end at these. Travel, hospitality, BPO, Media & Telecom can also benefit by using block chain. While, it is still in nascent stages of development, Block chain does have its own shortcomings as well. Because the technology is still developing, there are no set regulations around it. This is again under progress; and due to lack of regulation, Block chain and Bitcoin face a hurdle in widespread adoption by pre existing financial institutions. The solutions offered by Block chain technology do require significant changes,or some times even complete replacement of existing systems.This could be a concern for companies. And, not to forget cultural adoption with block chain a complete shift needs to be made to a decentralized network, which our world is yet to accept.