Internet today has penetrated into our lives as never before. We are using it in making our homes, cars, phones and even our coffee maker into smart. In total it has revolutionized our daily life and turned our existence upside down.
But this world created by internet is not that rosy. Recently Gmail accounts of US democratic election candidate – Hillary Clinton’s was hacked. NSA whistleblower Edward Snowden proved NSA’s large-scale spying on American citizens. And now talking about India, here 3.2 million debit cards were compromised.
This is just a minuscule part of a world filled with ‘Fancy Bears’ (Russian hackers), the government authorized illegal spying and online cyber wars which are fought every day. In this situation Blockchain is the future.
What is Blockchain?
Well, Business today says “A blockchain is an anonymous online ledger that uses the data structure to simplify the way we transact. Blockchain allows users to manipulate the ledger in a secure way without the help of a third party.” Went above the head? Relax.
I take Blockchain as the second generation of internet. It is going to be a place where the quantitative ability of internet is transformed into qualitative i.e. more value is generated.
The assets for which Blockchain creates value can be described as financial, legal, physical or electronic.
Where did it start?
In 2008, a cryptographer who goes by the pseudonym Satoshi Nakamoto created a crypto-currency called bitcoin. Bitcoin is a digital currency that allows you to perform peer-to-peer transactions without the help of a third party such as banks.
Although the enthusiasm surrounding bitcoin has waned away. But, and it’s big but, it has left behind a legacy, a legacy which is going to change the future of the internet. The underlying technology of bitcoin has been hailed by the banks. According to India’s leading bitcoin blockchain company Unocoin, blockchain enables two entities that do not know each other to agree that something is true without the need for a third party.
But how does it work?
Let’s try to understand it with an example outside banking system realm. Do you know what is ‘ uberPOOL ’ about?
It is a ride-sharing service that you can enjoy by sharing your ride with other passengers. Thus its good for your pocket. But it’s quite scary, at least for me! What if your co-passenger is a serial killer, or a thief or has been sent by your girlfriend for spying on you (that’s a bit exaggerated that). No offense, but in a country like India where Uber drivers are already landing behind bars for raping passengers and now you would have to share your ride with complete strangers. You have got two choices, either don’t use uberPOOL or use it with blockchain.
This is how it works. Suppose Saransh wants to share a ride with me.
- Saransh will send the request
- I’ll be using uberPOOL to tell I want to share my ride. The app will stamp the request with Saransh’s digital signature. It now needs to be verified by blockchain.
- Saransh’s request is grouped with other requests that occur at the same time into a block. The block has a unique id, the request time and the id of the previous block in the chain.
- The block containing Saransh’s request is broadcasted to the entire network to be verified.
- Once verified, the block is added to the head of the blockchain, forming a permanent record.
- After the verification, you get to know if there have been any complaints lodged against that person or any necessary stuff.
This is happening while you are reading this!
In a move that could revolutionize trade financing, ICICI Bank said that it has settled an export transaction in minutes as against the usual three days using a custom-made blockchain network with Middle Eastern counterpart, Emirates NBD. This was the first blockchain-based trade payment in India and the bank is now talking to others to grow the network. Apart from it, there are several startups that revolutionizing this sector and bringing into the realm of existence Coinsecure, Ezyremit and many more.
Today the technology is yet to mature. It remains to be seen if the expectations can live up to reality.