The In­fi­nite Pos­si­bil­i­ties of Blockchain Tech­nol­ogy

Blockchain tech­nol­ogy is based on a peer-to-peer topol­ogy and rep­re­sents a new archetype for the way in­for­ma­tion is shared.

Distinguished Magazine - - CONTENTS - KOEL CHATTERJEEE

Cryp­tocur­ren­cies have per­haps been the most talked about tech­no­log­i­cal in­no­va­tion in the past decade. Based on the blockchain tech­nol­ogy, cryp­tocur­ren­cies, like Bit­coin, have started to change the fi­nan­cial world for good. Blockchain tech­nol­ogy is based on a peer-to-peer topol­ogy and rep­re­sents a new archetype for the way in­for­ma­tion is shared. If it can be used prop­erly and to its full po­ten­tial, this dis­trib­uted ledger tech­nol­ogy will be the most sig­nif­i­cant in­no­va­tion across var­i­ous plat­forms and in­dus­tries, from health care and in­surance to fi­nan­cial ser­vices and mo­bile pay­ment.

In or­der to ex­plain the con­cept of blockchain, it needs to be men­tioned that blockchain is not a sin­gle tech­nol­ogy, but an ar­chi­tec­tural prin­ci­ple. While the reg­u­lar in­ter­net lets any­one pub­lish in­for­ma­tion all over the world, blockchain lets any­one send value any­where in the world, with an ac­cess to the blockchain file. The val­ues are stored in a dis­trib­uted peer-to-peer fash­ion, which can be shared among in­con­gru­ent users, which cre­ates un­al­ter­able trans­ac­tional records, with each of them time-stamped and con­nected to the pre­vi­ous record. What sets blockchain apart, is its rev­o­lu­tion­ary de­cen­tral­ized net­work, which does not need any kind of cen­tral­ized ad­min­is­tra­tion au­thor­ity. Ev­ery user or “block” is its own ad­min­is­tra­tor. Ev­ery trans­fer of value is in­stantly recorded, and this es­tab­lishes trust be­tween the users, as no one can edit or up­date a blockchain with­out ver­i­fi­ca­tion and con­sent from the other par­ties in the chain. As the whole sys­tem is based on pri­vate keys, that are lines of codes, they can be kept se­cure with rel­a­tively min­i­mal ex­penses and more re­li­a­bil­ity. The es­tab­lish­ment and ex­e­cu­tion of con­tracts in this tech­nol­ogy man­i­fest the po­ten­tial of blockchain tech­nol­ogy, and it’s not just con­fined to the fi­nance in­dus­try.

Among the other spheres in which blockchain seems to be an ob­vi­ously bet­ter op­tion, in­ter­net se­cu­rity and record keep­ing seem to be the fore­most. In a world of eas­ily hack­able in­ter­net iden­ti­ties, por­ta­ble and in­ter­op­er­a­ble iden­ti­ties will be a boon. On plat­forms like Block­stack, a user will be able to ac­cess apps atop de­cen­tral­ized net­works and have per­fect data porta­bil­ity. Also, as blockchain oblit­er­ates the need for in­ter­me­di­aries to en­force com­pli­ance, many pre­dict that this tech­nol­ogy might be the most rev­o­lu­tion­ary way of in­ter­net record keep­ing, since the in­ven­tion of dou­ble-en­try book­keep­ing. The dis­trib­uted ledger sys­tem of blockchain is the only in­cor­rupt­ible ledger sys­tem in his­tory, and it has the po­ten­tial to re­struc­ture the man­ner in which we run or­gan­i­sa­tions. In­her­ently, blockchain is re­sis­tant to data mod­i­fi­ca­tion. Hence, trans­ac­tional records in a de­cen­tral­ized data­base will be im­mune to ma­nip­u­la­tion or forgery.

This as­pect of se­cu­rity also ex­tends to the com­mu­ni­ca­tion channels on the in­ter­net. Re­cent de­vel­op­ments have shown that com­pro­mise of com­mu­ni­ca­tion channels by var­i­ous pub­lic and pri­vate in­sti­tutes is in­creas­ingly be­com­ing a norm, and in­di­vid­ual con­fi­den­tial­ity is be­com­ing less se­cure. The en­cryp­tion method­olo­gies of blockchain on a de­cen­tral­ized en­vi­ron­ment and its con­sen­sus tech­nol­ogy will be able to pro­vide more se­cure channels for com­mu­ni­ca­tion and ex­change of in­for­ma­tion. While that might very well be utilised for ne­far­i­ous pur­poses as well, over­all a se­cure en­vi­ron­ment can be cre­ated on the in­ter­net.

Blockchain can also be used for com­plex global prob­lems like re­duc­tion of poverty, a de­crease in cor­rup­tion, and de­vel­op­ment of shar­ing econ­omy. These are sig­nif­i­cant ne­ces­si­ties in the de­vel­op­ing coun­tries of the world. On­line in­ter­na­tional fi­nan­cial trans­ac­tions with­out any heavy re­mit­tance fees and no min­i­mum amount needed in bank ac­counts, both fa­cil­i­ties can be utilised heav­ily in these coun­tries. Also, re­moval of in­ter­me­di­aries will lead to a sig­nif­i­cant de­crease in the preva­lence of cor­rup­tion and ex­ploita­tion of the poor by the wealthy and the in­sti­tu­tions. Since the ma­jor­ity of the agrar­ian sec­tor of the world does not pos­sess dis­tinct land own­er­ship ti­tles, de­vel­op­ment of a record sys­tem and smart-con­tract based land reg­istry sys­tem, in a blockchain en­vi­ron­ment might as­sist in the pro­tec­tion and sanc­tion­ing of the land oc­cu­pancy of small farm­ers around the world. The shar­ing econ­omy of to­day, like Airbnb and Uber, has fa­cil­i­tated mil­lions around the world. This econ­omy is cur­rently hailed to be the fu­ture of the global econ­omy, which will pro­vide a more equal ac­cess to fa­cil­i­ties ir­re­spec­tive of the fi­nan­cial sta­tus of in­di­vid­u­als. In­tro­duc­tion of blockchain tech­nol­ogy to this net­work, which al­ready func­tions on a peer-to-peer ba­sis, will rev­o­lu­tion­ize the struc­ture, as there will be no cen­tral­ized in­ter­me­di­ary present to reap the eco­nomic ben­e­fits of the plat­form. It would be like if Face­book was owned by in­di­vid­ual users, and not just Mark Zucker­berg alone.

Blockchain can very well be­come an­other ex­am­ple where adap­ta­tion of the orig­i­nal in­ven­tion pro­ceeds to eclipse its orig­i­nal func­tion. What was in­vented for Bit­coin, can be utilised for in­fi­nite other func­tions and pos­si­bil­i­ties, other than the ones men­tioned above. What it ac­tu­ally will be used for can be a bit prob­lem­atic to fore­cast now. None­the­less, it can be safely pre­dicted that we are ad­vanc­ing to a com­pletely undis­cov­ered realm of tech­no­log­i­cally sound and a more fi­nan­cially equal world with blockchain.

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