In the previous article, we got a glimpse of what blockchain is all about and how it can benefit us in innumerable ways. In this article, we’ll see how India and the world, are coming up with regards to this technology and what are the possible challenges that can hinder its implementation.
Being a developing nation, everyone is curious to know about the impact of Blockchain in India would be and how it would benefit the Indian economy. Here are some of the recent developments for the adoption of Blockchain technology in India:
- The Reserve Bank of India (RBI) has successfully tested the blockchain technology for the application of trade.
- Finance Minister, Arun Jaitley in his budget speech on February 1, 2018, said that the government will explore the use of blockchain technology proactively.
- Pilot studies (short-term preliminary study) have been conducted by banks like ICICI, Kotak and Axis and companies like IBM and Mahindra & Mahindra to determine the feasibility of using the technology for the purpose of cross-border payments and trade finance.
- In April 2018, Swedish blockchain start-up ChromaWay and Indian IT giant Tech Mahindra joined hands to bring blockchain into Indian market to fight corruption and leverage the technology for making improvements to the society.
- In collaboration with some of the leading banks in India, one of India’s leading stock market exchanges is exploring blockchain for the management of KYC (Know your customer) documents.
- Deloitte India is working on making rewards and recognition program based on blockchain (Deloitte report on Blockchain technology in India).
State governments are also taking steps in this regard with Andhra Pradesh being the flag bearer of blockchain technology. It is the first Indian state to adopt blockchain for governance. It signed up New York-based ConsenSys to provide technical advice in managing land records and the state’s identity platform. Going one step further, they have even set up a Blockchain University with the aim of creating a world-class sustainable blockchain ecosystem. Partnering with a Swedish start-up, the state wants to build blockchain technology in land ownership system and maintain transparency with online records by enabling a distributed ledger technology (DLT) via the blockchain. The government of Maharashtra has also revealed five to six pilot projects (small-scale preliminary study) to assess blockchain technology. With more and more start-ups utilizing this technology in novel ways, it can be said that India has already made a head start in this domain.
Globally, the adoption of blockchain is on the rise. But not all countries have accepted it. Some have rejected the technology as well. Countries like The United Kingdom (UK), South Korea and Switzerland are investing heavily in blockchain technology to address issues like logistics, voting and property rights, whereas places such as Singapore, Hong Kong and Japan have already started using it in government operations.World’s most populous country, China has banned bitcoins and blockchain technology. It might be called the strictest place for the technology to boom. Other countries where adoption of the technology hasn’t been much include Vietnam, Bangladesh, Kenya, Russia and Thailand amongst others.
Deemed as the next big thing in technology, Blockchain has the capability to totally revolutionize the way we do things. But before it can be adopted universally, there are some major roadblocks which need to be removed.
High initial costs
Although blockchain boasts of reducing costs by going the digital way, the initial set up costs required to run it makes it expensive to buy in the first place. With the added problem of obtaining specialized hardware and software equipment and training personnel to use the relatively new technology, this might prevent the small and medium businesses to adopt the technology.
Perception of the public
As mentioned in the first part of the article, not many people are aware of this technology and its potential uses. It would involve a great deal of effort on the part of users to explain and get the members of the public aquatinted with the technology as for them, this process may be complex, slow and cumbersome. To assure them on matters such as its privacy, security, and efficiency, is a big challenge.
High energy usage
Most of the blockchains make use of proof-of-work (PoW) so as to achieve consensus. PoW involves the use of the machine’s computational power to solve intricate mathematical equations with the purpose of verifying a transaction and adding it to a block. This results in consumption of huge amounts of energy for two reasons, first to power the computer and second, to cool them. With the world already having a limited supply of energy, this technology can only be implemented if it is made sustainable to use.
From what we have seen so far, most governments are open to adopt this innovative technology. In my opinion, it seems that blockchain tech is here to stay. No doubt, this kind of technology can improve nearly every aspect of our lives, however, a cautious approach is needed bearing in mind the problems associated with it so as to fully utilize its potential. Time has come to see it as more of an opportunity to simplify processes rather than being in a state of complacency and ignoring it all together.
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Image Credit: Mojix
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