CHAPTER 1 :INTRODUCTION
RESEARCH PROBLEM
Blockchain technology was first outlined in 1991 by two mathematicians
Stuart Haber and W. Scott Stornetta. A blockchain collects information
together in groups, known as blocks, that hold sets of information. Blocks
have storage capacities and when filled are closed and linked to the
previously filled block, forming a chain of data known as the blockchain. A
blockchain is a distributed database that is shared among the nodes of a
computer network.
A blockchain is a distributed database that is shared among the nodes of a
computer network. As a database, a blockchain stores information
electronically in digital format. Blockchain are best known for their crucial
role in cryptocurrency systems, such as Bitcoin, for maintaining a secure and
decentralization record of transactions. The innovation with a blockchain is
that it guarantees the fidelity and security of a record of data and generates
trust without the need for the trusted third party.
* The goal of blockchain is to allow digital information to be recorded and
distributed but not edited.
* It allows users to manipulate the ledger in a secure way without the help of
a third party.
* It provides great transparency because it is a type of distributed ledger.
* With blockchain, you do not need as many third parties or middlemen to
make guarantees and so, the cost can be reduced.
* This technology offers new tools for authentication and authorization in the
digital world that fulfill the need of many centralized admistradors. As a
result, it enables the creation of new digital relationships.
Opportunities for Blockchain in India
* Post demonetization, India has developed a progressive outlook towards
digitization and is aware of the benefits it has to offer.
* The Indian government's blockchain initiatives are coming into action and
are the showcase of many proof-of-concept (POC) demonstrated in the
areas of banking, insurance, and registry.
* A number of Indian states are looking into using the blockchain technology
for security and digital land records
* A major opportunity in the voting sector is emerging with regards to
ushering in transparency and secure voting measures.
* Back in 2018, RBI set up a unit of individuals to research and supervise new
technologies around blockchain development. The focus of this research
was to specifically investigate creating a cashless and decentralized banking
system.
Challenges for Blockchain Adoption in India
Although the future of blockchain looks. promising, at the same time, the
fact that there are many unanswered questions that make blockchain highly
vulnerable simply cannot be ignored. Let's see what are the challenges in
the way of successful adoption of Blockchain are:
* Since blockchain is still in its infancy, it's too early to predict its applicability
as a mainstream technology.
* Lack of regulation and compliance are the most prominent challenges
standing in the way of successful adoption of the Blockchain. There are still
millions of people who are not aware of the concept of internet and
digitization, and under such circumstances, making blockchain a part of
mainstream life is a daunting task.
REVIEW OF LITERATURES
*Kratika Narain (2022):
Today, the world mainly relies on information that is generated and
distributed among the public on a large scale, but unfortunately, the
authenticity of the information is always in question. Recently, a new
technological breakthrough called blockchain has redefined the enterprise
of “trust”, making the information business inherently trustworthy. This
chapter will focus on the ongoing exploration of blockchain, a distributed
ledger technology (DLT) that is considered disruptive in the industry due to
its unique transparent and tamper-proof features and how it has opened up
new opportunities in various sectors, including government services, whose
application can provide operational efficiency and transparency in the
system and create value for citizens. Similarly, with the advent of Digital
India Initiatives, the government of India is moving towards being a digitally
empowered nation, with technology being the prime focus. As blockchain is
one of the emerging technologies in the industry, various pilot exercises are
being done in an Indian context in many states. The initial part of the
chapter will focus on understanding the application of blockchain in
government services to gain efficiency and increase transparency and
accountability in their functioning, and its implementations in government
services, like the development of government certificates, land registry,
creating tamper-proof voting records, vehicle registries, etc. The next part of
the chapter will focus on the global adoption of blockchain, since various
countries are in the league of experimenting with this technology in the
public sector. One effective case of blockchain adoption and
implementation in the country of Estonia will be discussed in depth, as its
adoption of blockchain technology can be seen as a successful Programmer
plan for potential blockchain applications elsewhere. Lastly, the chapter
explores institutional initiatives like the Center of Excellence (Coe) for
blockchain technology, set up by Karnataka to promote blockchain and its
application; regulatory approaches like the draft national strategy on
blockchain, which was submitted recently by the National Institute for Smart
Governance (NISG) to provide a set of policy frameworks to proactively
facilitate the integration of blockchain with existing economic ecosystems;
and a blockchain strategy paper by the government of India’s policy think
tank NITI Aayog.
*Jyoti Mahajan, Rajesh Mahajan, Dileep Kumar Singh
(2022):
A blockchain is a decentralized database that is shared across
computer network nodes. A blockchain acts as a database, storing
information in a digital format. The study primarily aims to explore how in
the future, block chain technology will alter several areas of the Indian
economy. The current study aims to obtain a deeper understanding of
blockchain technology's idea and implementation in India, as well as the
technology's potential as a disruptive financial technological innovation.
Secondary sources such as reports, journals, papers, and websites were used
to compile all the data. Current and relevant information were utilized to
help understand the research goals. All the information is rationally
organized to fulfill the objectives. The current research focuses on
recommendations for enhancing India's Blockchain ecosystem so that it
may become one of the best in the world at utilizing this new technology.
* Anup Kumar Saha, Suborna Barua, Shobod Deba
Nath(2021):
The chapter explores the challenges and opportunities of Blockchain-based
Financial Technology applications from the Indian perspective. Blockchain
has a recent hype worldwide and India responds to it making itself open to
both the challenges and opportunities. India has niche societal
characteristics, which makes its Blockchain confrontation unique than the
other countries exposed to this technology. This chapter contributes to the
understanding of these niche characteristics to identify the unique
challenges and opportunities of implementing the Blockchain technology
from the Indian perspective. the Blockchain technology from the Indian
perspective.
* Sebastian Schuetz, Viswanath Venkatesh (2020):
The economic development of rural India requires connecting remote
villages to local and global supply chains. Yet, high rates of financial
exclusion inhibit rural Indians from participating in these supply networks.
We review the literature on financial inclusion, adoption, and blockchain in
India, and posit that to resolve financial exclusion, the four challenges of
geographical access, high cost, inappropriate banking products, and
financial illiteracy need to be overcome. Next, we argue that blockchain
technologies hold the potential to overcome most of these challenges.
However, for blockchain technologies to become the cornerstone of financial
inclusion initiatives, an understanding of technology adoption in India is
needed. To guide the development of such understanding, we develop a
research agenda on the antecedents of adoption, adoption patterns, and
outcomes of adoption. Answering these research questions will lead to a
nuanced understanding of adoption of blockchain-based technologies in
rural India. The practical contribution of this paper is the discussion of how
blockchain can alleviate the issue of financial exclusion in rural India, thereby
providing a basis for a solution that could connect rural Indians to global
supply chain networks. The theoretical contribution lies in the identification
of knowledge gaps that should be answered to achieve financial inclusion of
rural Indians.
* Sambhu prasad Chakrabarty, Souvik Mukherjee
(2022):
Contrary to popular belief, blockchain technology is not a development
of the twenty-first century; instead, strategic research
in this area has made revolutionary changes in the last three decades. This
resurgence of interest in blockchain owes primarily to cryptocurrency. With
legal challenges plaguing cryptocurrencies, this technology explored other
avenues and has become popular in the healthcare sector, mainly because
of its ability to secure lifetime medical records. The Global North has been
vocal on this potential and is developing strategies to explore its possibilities
beyond pilot projects. On the contrary, barring a handful of exceptions, the
Global South is yet to explore similar options. As information technology
expands across jurisdictions, it becomes imperative to focus on the potential
capacity building in the Global South. Framing/Developing a legal
framework, which would address the existing challenges, this technology
inherently would be a sine qua non, in achieving the goal. It is essential to
study the subject from a techno-socio-legal standpoint and critically
examine blockchain technology’s feasibility in healthcare. This effort to
identify the critical concerns for applying this technology and developing a
strategy to include this technology’s possible adaptability shall be the key to
attain the vision of United Nations Sustainable Development Goals (UN SDG)
to promote smart healthcare in smart cities.
NEED FOR STUDY:
Blockchain is highly secure, traceable and reliable. This type of blockchain is
very useful for improving many aspects of our current society, including
conducting electronic elections.
SIGNIFICANCE:
ACCURACY OF THE CHAIN: Transactions on the blockchain
network are approved by a network of thousands of computers. This
removes almost all human involvement in the verification process, resulting
in less human error and an accurate record of information. Even if a
computer on the network were to make a computational mistake, the error
would only be made to one copy of the blockchain.
Transparency: Most blockchains are entirely open-source software.
This means that anyone and everyone can view its code. This gives auditors
the ability to review cryptocurrencies like Bitcoin for security. This also
means that there is no real authority on who controls Bitcoin's code or how
it is edited. Because of this, anyone can suggest changes or upgrades to the
system.
Private Transactions: Many blockchain networks operate as public
databases, meaning that anyone with an Internet connection can view a list
of the network's transaction history.
Efficient Transactions: Transactions placed through a central
authority can take up to a few days to settle. If you attempt to deposit a
check on Friday evening, for example, you may not actually see funds in your
account until Monday morning. Whereas financial institutions operate
during business hours, usually five days a week, blockchain is working 24
hours a day, seven days a week, and 365 days a year.
Cost Reductions: Typically, consumers pay a bank to verify a
transaction, a notary to sign a document, or a minister to perform a
marriage. Blockchain eliminates the need for third-party verification -and,
with it, their associated costs.
Secure Transactions: Once a transaction is recorded, its authenticity
must be verified by the blockchain network. Thousands of computers on the
blockchain rush to confirm that the details of the purchase are correct. After
a computer has validated the transaction, it is added to the blockchain
block. Each block on the blockchain contains its own unique hash, along
with the unique hash of the block before it.
Decentralization: Blockchain does not store any of its information in a
central location. Instead, the blockchain is copied and spread across a
network of computers. Whenever a new block is added to the blockchain,
every computer on the network updates its blockchain to reflect the change.
OBJECTIVES OF BLOCK CHAIN:
*To understand blockchain:
Blockchain is a system of recording information in a way that makes it
difficult or impossible to change, hack, or cheat the system. A blockchain is
essentially a digital ledger of transactions that is duplicated and distributed
across the entire network of computer systems on the blockchain.
*To analyze various opportunities and challenges of
blockchain:
Blockchain has numerous benefits such as decentralization, persistence,
anonymity and auditability. There is a wide spectrum of blockchain
applications ranging from cryptocurrency, financial services, risk
management, internet of things IoT to public and social services. Although a
number of studies focus on using the blockchain technology in various
application aspects, there is no comprehensive survey on the blockchain
technology in both technological and application perspectives. To fill this
gap, we conduct a comprehensive survey on blockchain technology. In
particular, this paper gives the blockchain taxonomy, introduces typical
blockchain consensus algorithms, reviews blockchain applications and
discusses technical challenges as well as recent advances in tackling the
challenges. Moreover, this paper also points out the future directions in
blockchain technology
Research Methodology:
The research methodology and research methods are collected through
various websites, newspapers, books, magazines etc. The research
methodology that has been utilized for this research is discussed.
Source of Information:
The information collected for this study is secondary data. Secondary
sources consist of various websites, blogs, articles, etc.
Hypothesis:
[Link] blockchain establishes a system of creating a distributed consensus in the digital
online world.
[Link] allows participating entities to know for certain that a digital event happened by
creating a record in a public ledger.