‘Blockchain’ has emerged to become a potentially transformative force in multiple aspects of government and private sector operations. Its potential has been recognized globally, with a variety of international organizations and technology companies highlighting the benefits of its application in reducing costs of operation and compliance, as well as in improving efficiencies.
While the technical underpinnings of the technology can be intimidating to a large section of policy and decision-makers – simply and functionally, blockchain can enable ease of collaboration for enterprises and the ease of living for our citizens by bringing in transparency across government and private sector interfaces.
Blockchain technology is still in its nascent form in India. For a lot of industries in the country, it is still a concept that is yet to be understood. Despite the fact that the technology is still in a nascent stage of its development and adoption as it continues to evolve, it is important for stakeholders such as policymakers, regulators, industry and citizens to understand the functional definition of the entire suite of blockchain or distributed ledger technologies along with legal and regulatory issues and other implementation prerequisites.
Blockchain technology, which first emerged as the backbone of bitcoin in 2009, is heralded as the most important innovation since the Internet itself. Post the advent of Bitcoin, there has been a flurry of advancements, new use cases, and applications of blockchain technology. While a lot has been said about what can be done with blockchain, very little has been done in applying it to solve real-world problems. Organizations and their executives are confused either about what blockchain is or whether they need the blockchain.
In Blockchain technology, once the data has been added to the ledger or block, it is not possible to change the data by any node in the network. The other aspect is that once the data has been added, one can trace the data and the entire history of that record. Blockchain technology uses complex algorithms that cannot be hacked.
Types of blockchain networks
Public blockchain networks
A public blockchain is one that anyone can join and participate in, such as Bitcoin. Drawbacks might include substantial computational power required, little or no privacy for transactions, and weak security. These are important considerations for enterprise use cases of blockchain.
Private blockchain networks
A private blockchain network, similar to a public blockchain network, is a decentralized peer-to-peer network, with the significant difference that one organization governs the network. That organization controls who is allowed to participate in the network, execute a consensus protocol and maintain the shared ledger. Depending on the use case, this can significantly boost trust and confidence between participants. A private blockchain can be run behind a corporate firewall and even be hosted on-premises.
Permissioned blockchain networks
Businesses who set up a private blockchain, will generally set up a permissioned blockchain network. It is important to note that public blockchain networks can also be a permissioned. This places restrictions on who is allowed to participate in the network, and only in certain transactions. Participants need to obtain an invitation or permission to join.
Multiple organizations can share the responsibilities of maintaining a blockchain. These pre-selected organizations determine who may submit transactions or access the data. A consortium blockchain is ideal for business when all participants need to be permissioned and have a shared responsibility for the blockchain.
The post A brief insight into Blockchain technology appeared first on NASSCOM Community |The Official Community of Indian IT Industry.