Blockchain- Crypto payments

What is Blockchain- Blocks which are made of digital information are put together. These
are comprised of basically 3 things.
1. Information about transaction is stored- such as date, time, place and amount
etc.
2. Information about the participants- Such as who where and what
3. Information is stored in a code called hash which is unique in every block.
Data of around upto 1 MB can be stored in a block. A block can contain transaction of few
thousands only.

(Credit: Investopedia)
Working of Blockchain:
When new data is stored in a block then it is added to the chain of blocks. The conditions for
addition of new block to blockchain are-
1. A transaction has to happen.
2. Verification of transaction happens through network.
3. Block has stored the transaction.
4. This block is coded as hash which is unique in the block. After this coding it is added
to the chain and becomes part of big blockchain and becomes available to everyone
to view and know in public.
Every computer has unique copy of same blockchain it means same bitcoin will have
millions of unique copies in the chain but manipulation of information is difficult.

Security: Blockchain is very secure because information in each block is uniquely coded in
the chain so if a hacker tries to hack then he would have to change the coding of each hash
in whole network which is just impossible because deleting information or block is not
possible.

Practical application of Blockchain:

1 Bank use
2 Use in cryptocurrency
3 Healthcare use
4 Property record use
5 Use in smart contracts
6 Supply chain
7 Election voting

Discussion on Use in cryptocurrency:

Currencies in the respective countries are verified and regulated by their central banks and
follow their govt policies. In case govt becomes unstable and bank collapses then currency
of that country goes for toss in terms of value and security. This is the reason behind
invention of crypto currency which is eliminates the middleman such as bank and their
influence on it. It also eliminates the transaction chargers and processing fee. This crypto
currency is stable domestically and internationally, also empowers people to do business
across the globe without variation is value of the currency. There are many crypto
currencies available in the market such as-

1. Bitcoin.
2. Litecoin
3. Ethereum
4. Ripple
5. Bitcoin cash
6. Ethereum Classic
7. Zcash
8. Dash
9. Monero
10. Neo
11. Cardano
12. Eos

Governments’ rules/views across the globe: Governments in Europe, USA, Australia and
some Asian governments too have given green signal to operations of crypto currency by
law. Indian government doesn’t have enough liberal thought of this and operations have
been banned in country.

The Marshall islands announced to launch government backed crypto currency known as
SOV. This is going to be first legal tender of the world.
Facebook is set to launch its own crypto currency libra.
( Diagram credit: Wikipedia)

RBI has allowed blockchain usage but has barred crypto currency and crypto assets.
RBI doesn’t promote and put following in negative list:

 Credit registry
 Initial Coin Offering
 Cryptocurrency/Crypto assets services
 Trading/investing/settling in crypto assets
 Credit information
 Chain marketing services, and
 the regulators/Government of India banned products/services

However, With the regulatory sandbox, RBI thinks to promote innovation in following areas:

 Retail payments
 Digital KYC
 Smart contracts
 Money transfer services
 Financial advisory services
 Cybersecurity products/services
 Digital identification services
 Marketplace lending
 Financial inclusion products
 Wealth management services
A Rastogi is managing partner, Ikigai Law, and Ramachandran is CEO, ZPX, a Singapore-
based blockchain firm writes in economic times that India must come out of the fear of
cryptocurrency usage seeing its varied usage and importance at large.

Sources:

1. https://economictimes.indiatimes.com/news/economy/policy/view-rbi-needs-to-
overcome-its-fear-of-legitimate-cryptocurrency-usage/articleshow/69980111.cms
2. https://www.investopedia.com/terms/b/blockchain.asp
3. https://en.wikipedia.org/wiki/Legality_of_bitcoin_by_country_or_territory
4. https://inc42.com/buzz/cryptocurrency-game-of-thrones-coins-rbi-regulatory-
sandbox-unocoin/