Blockchains became part of regular conversation fairly recently when cryptocurrencies suddenly became the rage and everyone was marvelling at the fantasy of getting rich using a virtual decentralised currency... i.e. sans government control. In due course, the cryptocurrency bubble went bust. However, blockchain and its applications go much beyond cryptocurrencies.
What is it?
A blockchain is a list of records, linked using cryptography. Each block contains a cryptographic hash of the previous block, a timestamp, and transaction data. At the basic level, a blockchain is an open, distributed ledger that can record transactions between two parties efficiently and in a verifiable manner. It works best in a peer-to-peer network. As Akshay Aggarwal, country head and co-founder at Blockchained India puts it, “It is a database, where the data gets verified with a piece of an algorithm. This essentially means that the data in a block cannot be changed without altering subsequent blocks. This ensures data security and works for situations, where there is an element of trust at play. Moreover, data on the blockchain are also encrypted and cannot be misused.”
How can it be used?
Akshay explains, “If you have a contract with an insurance dealer, with a lot of conditions ingrained into it, you can build that logic into the contract on the blockchain, to ensure that once verified, it comes into force automatically, without the need for any human intervention. It ensures that no one can play a negative role and also removes trust issues that can crop up.”
He adds, “Blockchains are also going to impact financial technology in a major way, from regular trading to secondary markets. It is more secure and adds a lot of value. I also foresee blockchain technology being used in healthcare and allied services as well.”
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