In the recent past, terms such as bitcoin, crypto-currency and blockchain have become buzz words in financial and legal circles.
Blockchain is a public ledger, where every aspect of financial transactions is recorded and kept safe and secure in an encrypted format. The technology is revered as safe from tampering and manipulation by third parties, and involves storage of information in independent ‘records’ (or blocks), which are linked using encryption (cryptography). Hash pointers link one block to another to form a chain (blockchain). These blocks also contain independent timestamp and transaction data.
While the blockchain is in the public domain, the data in the blocks cannot be altered or manipulated.
The development of the Bitcoin in 2009 pushed the global economy into a whirlwind of change. Using blockchain as the basic concept, Bitcoin took the world by storm and is already expected to become the next technological revolution.
Bitcoin and other crypto-currencies using the blockchain format facilitate cashless payments between two transacting entities, leaving central agencies such as banks completely out of the equation.
So powerful and attractive is the idea of blockchain that its use and promotion has spread like wildfire. This is reflected in the technology being used not only by entities well-versed with the financial world, but even by indie-music festivals in remote corners of India.
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Pravin Anand is managing partner and Siddhant Chamola is an associate at Anand and Anand
B-41, Nizamuddin East,
New Delhi 110013, India
Tel: +91 120 405 9300