We can call a blockchain a series of different blocks, in which information is collected in these blocks. The purpose of using blockchain is to fix the time stamp of digital documents so that backdating or tampering with them is not possible.
Blockchain has been a topic of discussion all over the world in recent times. Blockchain has come in more limelight since the era of cryptocurrencies, because cryptocurrencies work on the technology of blockchain itself. As the use of cryptocurrencies or NFTs (Non-Fungible Tokens) is increasing all over the world, the importance of blockchain technology is also increasing. Blockchain technology is now taking its toll on the lives of the common man as well. Many of the services we use in our everyday life may be based on the technology of blockchain but we are not aware of it. In such a situation, it is important to be aware of what is blockchain in today's time and how our lives are related to it.
What is Blockchain ?
We can call blockchain as a series of different blocks, information is hidden in these blocks. The purpose of using blockchain is to fix the time stamp of digital documents so that backdating or tampering with them is not possible. Blockchain technology can also help us overcome the problem of two records without using a central server.
Using blockchain technology, money, property, agreements, etc., can be easily exchanged without the need for the intermediary of banks, governments or any third parties. The specialty of this technology is that once a data is entered inside a blockchain, it is not only difficult but almost impossible to change it.
Example of blockchain?
Suppose you are shopping in a mall. As soon as you go to pay for your purchases at the counter, you find out that your debit or credit card is not working. You receive a notice that due to a fault in your bank's server, your card cannot be used by any customer of that bank, including you. What will you do then? Obviously, if you ever get stuck in such a situation then you will be in trouble.
Now consider another aspect. Let's say the mall you're shopping at has access to a data or ledger that can update every transaction on your debit and credit cards whether that bank's server is working or not. If this happens, you will be able to use your cards even if your bank's server is down.
Because, the mall will update your purchase amount in its data and when your bank's server gets fixed it will update there as well. In such a situation, you will be able to shop without any problem even in the event of the server being down. That's what blockchain technology is all about.
Relationship between blockchain and bitcoin?
Cryptocurrencies around the world whether it is bitcoin or ethereum all use the technology of blockchain. The first and most famous application based on blockchain is bitcoin, the world's most famous peer-to-peer digital currency. Bitcoin is created and controlled on the technology of blockchain itself. Unlike traditional currency, you can transfer bitcoins based on blockchain technology to anyone and anywhere without permission from banks or governments.
Cryptocurrencies like bitcoin or ethereum, a digital currency based on blockchain technology, do not even care whether you are a human or a machine. Based on blockchain technology, thousands of bitcoins at the same time are able to equally verify the validity of the payment, so its operation does not require banks or any third party middleman.Blocks in Bitcoin's blockchain are added every 10 minutes after they are verified by Cryptominers with the help of an inbuilt Consensus Mechanism. Each entry in these blocks is secured using cryptographic maths which makes it immutable.
Role of blockchain in Digital Rupee?
Let us tell you that India's Finance Minister Nirmala Sitharaman had announced during the budget speech of the year 2022 that in the coming financial year the government will develop a Central Bank Digital Currency (CBDC). The CBDC that the Reserve Bank of India will launch will be based on the technology of blockchain like any other cryptocurrency like Bitcoin or Ethereum. CBDC or Digital Currency will be a legal tender issued by RBI in digital form.
Bad side of blockchain?
The fundamental problem of blockchain technology is to control it. Any central bank has complete control over the digital currency because the nature of blockchain is decentralized. So, if RBI comes up with digital currency in future, it will be interesting to see what approach it adopts to maintain its secrecy and monitor it.If RBI retains its control over the data of this digital currency, then CBDC being a digital currency will also be separated from the basic nature of NFT, because the specialty of digital currency or cryptocurrency is that no one can control or monitor it Is.
