Blockchain Simplified: With Bhaveen Kumar, IIM Indore Student

 About the Guest Author
This article has been created in collaboration with Bhaveen Kumar. He is a first-year student at IIM Indore's PGP HRM course.
He has participated in the Russian exchange, where he represented India to present AI based decentralised fact checking system using the blockchain mechanism to President Putin's Office. He has also been awarded scholarship entry to the Blockchain think-tank 1000x-ers, which included investors like Cedric Dahl from the Silicon Valley. His other interests include travelling and reading books on behavioural economics, philosophy, psychology

Here is an excerpt from conversations with Bhaveen on Blockchain technology.

What does one mean by Blockchain?

Blockchain is a non-erasable register(ledger) whose data can be accessed by anyone in the world. This is how you would explain it to your friend:

Decentralised: This is what makes blockchain special, power does not rest in the hands of one central authority like our bank in case of financial transactions. Today if I go bomb google data centers the internet goes down but the bitcoin nodes are so spread out that I will have to bomb the entire planet to make the Bitcoin network go down. Decentralisation is more like the hands of a starfish even if I cut one, the system is still sustainable.

Consensus: The reason paper currency exists today is that the RBI recognises it and we citizens value it. Now imagine a system which is based on mathematical puzzles not Modi’s whims and fancies(demonetization) and is accepted by everyone in the world because every transaction is validated after solving a very complex mathematical puzzle.

Permanent: Once the transaction is validated it is stored permanently on the register(ledger) and can’t be erased by any means think of it as a digital locker.

Open ledger: Anyone in the world with a PC can access all transactions or information stored on the blockchain and thus gives power in the hands of everyone.

Imagine blockchain like god it is immortal everyone has access to it but nobody has the power to change it.
We have seen much awe at the technology.

Does it bring any risk from the viewpoint of cyber security, data management?
We today have 100 banks in India with the advent of the blockchain there would be 1.3 billion banks, everyone would be a bank now that might sound exciting but is a double-edged sword you have the power in your hand and money stored in a system which is absolutely incorruptible but if anyone gets an access to your private keys he can withdraw all your funds. So today we talk about systems which are extremely secure but your private data must be handled diligently. Banking is just one example the same is true for all your personal data an example can be your own cryptographic identity.

There have been cases when people unknowingly acquired 100’s of bitcoins back in 2009, lost their private keys and in the process lost a fortune.

What could be some applications that the blockchain has already been put to use in various industries?
So entire blockchain domain and the technology is in its nascent stages and no single startup has achieved super-dominance.

Human Resource: Blockchain will make resumes and LinkedIn obsolete

Blockchain is perfectly capable of making both old-school resumes and career networking websites like LinkedIn obsolete. Instead of an applicant writing up a description of where they’ve worked and what they’ve done, blockchain transactions will simply store all of their employment history, not only that performance of all the employees would be freely available which would remove a lot of subjectivity in the hiring process. Startups like Dock.io and OUNA work in this domain.

Operations: Counterfeit good will cease to exist. Every step in the supply chain would be now stored on the blockchain and thus fake goods would be traceable in seconds. Startups like Ambrosus and Ve-Chain are working on this.

 Finance: Bitcoin it is guys. Today we talk about using crypto-currency as money in everyday transactions. Cross-border transactions are seamless on the blockchain. Collateral free loans issued in seconds using smart contracts especially due to the enabling of cross-border finance based on the blockchain. We talk about IoT devices micro transacting with each other on the Blockchain. Startups like Fintrux and Singularity AI are working on this.

Marketing: No more middlemen, which means no Google and Facebook. The new model implemented on the blockchain would connect advertisers and users directly using a tokenized model. Startups like Datum, Datawallet are working on this.

 Apart from the above applications, we talk of a free internet which is not owned by any one large corporation, unlike today.

To sum up the discussion, BlockChain is a technology which has immense potential for new use cases. However, the companies are still waiting for the tech to be mainstreamed. Currently, only pilot-test based uses are being tried out. Future holds much more possibilities for similar disruptive tech.