Sansad TV Perspective: Blockchain Technology

In the series Sansad TV Perspective, we bring you an analysis of the discussion featured on the insightful programme ‘Perspective’ on Sansad TV, on various important topics affecting India and also the world. This analysis will help you immensely for the IAS exam, especially the mains exam, where a well-rounded understanding of topics is a prerequisite for writing answers that fetch good marks.

In this article, we feature the discussion on Blockchain Technology.

Anchor: Vishal Dahiya

Guests:

1. Subimal Bhattacharjee, Digital Technology Expert
2. Abhishek Singh, CEO, MyGov
3. Sathvik Vishwanath, Co-founder & CEO, Unocoin

Highlights of the discussion:

• Introduction
• Blockchain technology
• Significance of Blockchain technology
• Challenges with Blockchain technology
• Significance of the National Strategy on Blockchain
• Way Ahead

Introduction:

• Blockchain is an innovative distributed ledger technology that was first launched with the design and development of the cryptocurrency, Bitcoin (2009). 
• Any tangible or intangible asset with a value attached can be represented and tracked on a Blockchain network which brings transparency, increases processing speed, and reduces cost. 
• Globally and nationally, various efforts are being made towards implementing Blockchain-based applications by carrying out proofs-of-concept and pilot deployments. 
• The National Strategy on Blockchain was released by the Ministry of Electronics & Information Technology in December 2021. It laid out an overall vision for development and implementation strategies for a National Blockchain Platform covering the standards, legal and regulatory framework, collaboration, capacity building, and potential use cases.

Blockchain technology:

• The blockchain technology brings a method to do transactions without the need for third-party verification. There is just the sender and the receiver and other computers in the network acknowledge the transaction.
• This reduces the cost of transactions, increases accessibility, and improves the speed of the transactions.
• The distributed ledger technology that is used in the Blockchain allows for decentralizing entire storage and verifying data and information.
  • This information is stored across the network in different nodes and the network itself becomes the agency of verification without having to revert to the central database.
  • For instance, if we are doing background checks regarding academic credentials, the network becomes the single source of truth.

Significance of Blockchain Technology:

• It has great potential in the field of e-governance wherein people can be greatly benefitted. Examples include:
  • Karnataka land registration project
  • IIT Kanpur issued degrees using blockchain technology
  • Drug discovery project of Union Health Ministry
  • Academic credit bank project of CBSE
• Distributed ledger system where the nodes are communicating with each other and contain information of the previous block along with the time-stamping automatically sets the sense of security.
• It can optimize a lot of work in different fields. The best example here is that of Aadhar based distribution system.
• Also in this scenario where Digital India Mission is reaching the masses, blockchain technology can be accessible in the remotest corners of the country.
• Once the information is on the blockchain, it exists forever and cannot be tampered with.

Challenges with Blockchain Technology:

• In the field of cryptocurrency, the major issue is that of sovereign backing by the government as the Reserve Bank of India is the sole issuer of currency.
• There are concerns related to terror financing with the use of blockchain in cryptocurrency.
• Cross-border sharing of information can pose security challenges.
• Blockchain technology is still at the initial stage and still quite inefficient. For instance, Bitcoin can process just 500 transactions in a minute.
• The block size is usually 1 Megabyte and the information is replicated in all the computers of the network which increases inefficiency.

Significance of the National Strategy on Blockchain (NSB):

• The NSB has laid certain policy actions and the framework that should be implemented by the government.
• It has also provided guidelines for developing a robust infrastructure of Blockchain technology that can be used for e-governance solutions.
  • The national infrastructure will consist of nodes, computing peripherals, and professionals which can be used by various entities.
• The NSB will also lay down standards for e-governance applications that will be using the national blockchain infrastructure.
• It will also scale up the current pilot projects across the country.
• It is a timely and useful effort by the government to ensure inclusivity.

Way Ahead:

• Return on investment in using the blockchain technology considering all factors like compute cost, power cost, etc. should be taken into account before actually going forward with the technology in every sector.
• Also, the blockchains at all levels and across sectors should be interoperable. The national infrastructure can ensure this provision of geographical and cross-sectoral interoperability.
• Moreover, there is a need for an efficient workforce that can put the technology to the best possible use.

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