Blog Details

Author - Advocate Suniti Kaur

While blockchain enthusiasm is spreading worldwide at a faster rate, more industries have started adopting the new-age technology. This leads to starting afresh blockchain app development in many sectors. India has also started implementing blockchain technology in various industries.

What is Blockchain?

Blockchain is a decentralized ledger. It is a database which is not centralized within a location or by an organization, but by multiple computers and organizations. Also, it is not governed by a person but there might be several contributors. Blockchain is a public electronic ledger which holds immutable data in a secure and encrypted way. Simply put, Blockchain is a chain of blocks which contains information.

Each digital record or transaction in the blockchain is a block link to the next block through cryptographic hashing. It is a distributed ledger which is completely open to anyone. It also has an interesting property. It becomes very difficult to change it once some data has been recorded inside of blockchain. Therefore, it is free from data alteration or tampering.

What is Smart Contract?

A Smart Contract is an important concept of blockchain. Smart Contract is a tiny computer program which is stored inside a blockchain. It does not require a third party. Since Smart Contracts are stored on a blockchain, therefore they have inherited a few properties such as Immutable and Distributed. Being immutable means once a Smart contract is created, it can never be changed again, therefore, no tampering is possible. Being Distributed means the Output of the contract is validated by everyone on the network. Thus, a single person cannot force the contract to release the fund. Tampering a Smart contract is almost impossible.

Blockchain Evolution

In 2008, a digital cryptocurrency - Bitcoin - was the first blockchain application conceptualized by Satoshi Nakamoto. He had detailed it as an electronic peer-to-peer system. A peer-to-peer (P2P) type of an electronic cash system is the online payment from one partner to another without the involvement of any financial institution.  

Blockchain technology is widely used in several industries. The areas covered can be Payment processing and money transfers, Monitor supply chains, Retail loyalty rewards programs, Digital IDs, Data sharing, Copyright and royalty protection, Digital voting, Real estate, Immutable data backup, Tax regulation and compliance, Medical recordkeeping, etc. Till date, it is already implemented successfully in a few industries and ready to be explored by more.

Blockchain Technology in India

In India, the adoption of Blockchain technology is experiencing rapid growth across various industries. States in India such as Andhra Pradesh, Kerala, Karnataka, Maharashtra, Goa, Telangana support Blockchain startups and projects. These states are organizing conferences on the topic as well. Digital payments are widely used in India since the demonetization in 2016. Ever since there is a huge transformation from physical currency to digital payments. Lots of digital payment platforms have been introduced such as Google Pay, Paytm, PhonePe, etc.

People in India gradually realized and learnt the importance of digitization. They got to know the benefits of digital money and cashless transactions. After the successful adoption of digital money transactions on a large scale in a short period, India is now approaching blockchain technology. It - the Blockchain technology - is on the path of defining the forthcoming era of transacting digitally and transform the Finance-Technology stream.

Blockchain Technology immersion in India

The banking and Finance sector tops the list along with the industries such as healthcare, logistic, retail, etc adopting this technology in India. Blockchain has found its way in the Indian Finance-Technology ecosystem, and it is marking its presence in a deep-felt manner. Blockchain uses KYC efficiently and effectively, resulting as a reason for banks to welcome the technology. SBI is the first bank to use KYC and facilitate payments based on blockchain. The KYC procedure has been followed by other banks like AXIS, ICICI, IDBI, HDFC, etc.

In the insurance industry, the claim management system faced the issue of losses every year. Now, the industry finds the Blockchain implementation as the ultimate solution to minimize losses. A secure data-sharing solution built on the Corda blockchain platform has been developed. The companies built other Blockchain platforms as well for tracking and tracing, asset monetization, tokenization, digital identity and assets in common.

A project has also been built using blockchain to transform the functionality of public administration for efficient distribution of subsidies, housekeeping of record, systematic monitoring of taxes and regulate supply chain management (SCM). It also has plans to explore in the education sector.

In the Real Estate industry, blockchain has been solved many issues such as maintaining, searching and verifying title deeds, transferring property, over-reliance on brokers, banks, registration officers, etc. The decentralized property of the technology minimized the dependency of middlemen makes the instant transfer of property possible. The Blockchain Smart Contracts also solve issues of repetitive transactions/contracts.

Blockchain technology adoption challenges in India

Although blockchain technology is very bright and promising, it still faces a few challenges in India.

The first and most important challenge is that the government of India had not yet implemented a well-defined regulation for blockchain technology. Technology adoption would accelerate once the regulations are defined.

The next challenge is that the RBI and the taxation authorities are not in favour of cryptocurrency considering the issues related to tax-evasion and lack of control of regulators over the digital currencies. The blockchain technology-based projects are hesitant to go forward due to the same. 

Furthermore, many supply chain vendors hesitate to adopt the technology due to lack of awareness and state of distrust about technology.

Conclusion

Although blockchain is in its beginning at present, India is looking forward to adopting it. Despite all such various challenges, implementing this technology widely in industries will prove to be a game-changer. Policies combined with the efforts of the government and diverse industries will shape the future of this next-generation technology in India.