What is Blockchain system in India and how is it changing the face of Indian financial market?
Blockchain revolution has taken the world to the next level of digital evolution. The blockchain is a distributed ledger technology. The technology uses a peer-to-peer network of supercomputers to check the validity of the transactions. As an anonymous online ledger, it offers an effortless way of transactions that remain secure. On Blockchain system in India, the transactions go across without the intervention of any third party financial entities like banks who levies massive exchange fees.
The technology advancement has offered two types of Blockchain.
1) Public Blockchain: It is an entirely decentralized platform. Any individual can trade over the blockchain; he can send receive, swap and use it at POS. The transactions that go through the blockchain are validated by nodes and are added to the ledgers. All the transactions are made secure with crypto signatures.
2) Private Blockchain: A private blockchain is dedicated to a private organization and is controlled by a regulatory body. All the access and permissions are under control. Usually if the organization uses it for smart contract-enabled and proof-of-stake based blockchain design.
Benefits of Blockchain Technology
1. Secure System: Without any third-party involvement, blockchain lets its user do very secure transactions. The data channels are complicated to tamper, and the system is very robust.
2. Transparent Channel: Being a distributed ledger the users have full control of the information and transactions. Although the ecosystem is complicated, it never causes issues for users.
3. Accelerated transactions: With no documentation needed and all the transactions being digital and secure the entire process is rapid.
4. Reduced transaction costs: Blockchains have massively reduced the cost of transactions. The transactions go over a secure channel and as no third party is involved the exchange fee and transaction costs are very low.
Blockchain works in a manner that it protects the identity of the traders over the most secure channel. The potential of blockchain makes it a viable solution to the inefficiency of the financial sector.
Blockchain adoption in India
On 6th Dec 2017 Blockchain foundation of India was launched to promote the growth of blockchain startups in India. This is just one phase of Blockchain India acceptance for Indian Economy. Banks, health-sectors, real-estate and other financial institutions are working to integrate Blockchain technology into their day to day operations and overcome the bottlenecks they are facing right now. Banks like ICICI did some experiments and tried to do global transactions on an internal Blockchain.
Regulatory bodies like Reserve bank of India is edging towards creating a new Blockchain platform that can be regulated by them. Institute for Development and Research in Banking Technology will be leading the development of this platform. Indian Government has been trying its best to make India a digital nation and opting to go for more cashless operations. Blockchain comes across as a new age solution for Indian economy by reducing the transaction times and transaction cost.