Block Chain Technology - A Tool Of Digital Transformation
BANKING FINANCE|November 2021
"Artificial intelligence, machine learning, Internet of Things, blockchain and big data hold potential to take India to new heights" -PM Sri Narendra Modi at the 2016 World Economic Forum (On launch of "IndiaChain" by NITI Aayog)
Ranjit Kumar

Introduction

Block Chain technology is a structure that stores transactional records. It is also known as the block of the public in several databases. This database is known as the Chain in a network that is connected through peer-to-peer nodes. Typically, this storage is referred to as a 'Digital Ledger' because the Blockchain is a distributed database of records of all transactions or digital events that is executed and shared among participating parties. These transactions are verified by majority of participants present in the system.

Over the last few years, we have heard many times the term 'Block Chain Technology'. It is imperative to understand that what Block Chain technology is, how it works and how it's becoming vital in the digital world. Basically it is treated as the backbone technology of CryptoCurrency like BitCoin. It seems like Block Chain is a platitude but in a hypothetical sense, there is no real meaning that the layman can understand easily. So let us understand that what actually Block Chain technology is and how it works through definition and examples.

Actually, a blockchain is a decentralized, distributed and public digital ledger consisting of records called blocks that is used to record transactions across many computers so that any involved block cannot be altered retroactively, without the alteration of all subsequent blocks. Here participants verify and do the audit of transactions independently with comparatively less expense.Here database is managed automatically through peer-to-peer network and a distributed timestamping server. It is authenticated by mass collaboration powered by self-interests. Its structure facilitates strong workflow where the participants feel secured because data security is high.

History of blockchain

* First time Blockchain-like protocol was proposed by Cryptographer David Chaumin 1982 in his thesis Computer Systems Established, Maintained, and Trusted by Mutually Suspicious Groups

* Again in 1991, Stuart Haber and W. Scott Stornetta described further on a cryptographically secured chain of blocks.

* In 1992, Haber Stornetta and Dave Bayer incorporated Merkle Trees to the design, which improved its efficiency by allowing several document certificates to be collected into one block.

* The first Block Chain was objectified by a person or group of people using the name Satoshi Nakamoto in 2008 to serve as the public transaction ledger of the CryptoCurrency bitcoin. The identity of Satoshi Nakamoto still remains unknown. The invention of the blockchain for bitcoin made it first digital currency without the need of a trusted authority or central server.

* Actually Satoshi Nakamoto used the words block and chain separately in his original paper, but were eventually one single word blockchain became popular in place of separate word i.e. block and chain by 2016.

* Further in May 2018, Gartner (Gartner, Inc, officially known as Gartner, is a global research and advisory firm providing information, advice, and tools for leaders in IT, finance, HR, customer service and support, communications, legal and compliance, marketing, sales, and supply chain functions. Its headquarters are in Stamford, Connecticut, United States) found that only 1% of CIOs (Chief Information Officers) indicated any kind of Block Chain adoption within their organizations and only 8% of CIOs were in the short-term planning or (looking at) active experimentation with Block Chain. For the year 2019 Gartner reported 5% of CIOs believed Block Chain technology was a 'game-changer' for their business.

* Again Gartner listed blockchain as one of the top ten strategic technologies for 2020 in its report Top 10 Strategic Technology Trends for 2020'. It said public blockchains are presently too immature for enterprise deployment due to poor scalability and interoperability but expects the technology to overcome these issues by 2023.

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