Demystifying blockchain technology

Jappreet Sethi

Blockchain has become one of the most talked about technologies in the recent times on the Internet. A recent HSBC global survey says, “As much as 80per cent of those who have heard of ‘blockchain’ said they don’t understand it.”

What is blockchain?

The blockchain is a type of database that is built over a peer-to-peer network. It can be a great disruptor to the centralised economy, as it allows the transfer of digital files without the need for central authority. 

The elimination of the intermediaries brings several benefits, including lower transaction costs, along with transparent and verified data storage; as in the case of financial services, it removes the need for financial institutions and banks to verify all the transactions.

“A blockchain is a new type of database that enables multiple parties to share the database and to be able to modify that safely and securely even if they don’t trust each other. ” — CEO and Founder, Coin Sciences Ltd.

Blockchain has the potential to create a real sharing economy, where people can share, connect and transact without any middleman, thus truly democratising the whole process without the “corporation" calling the shots.

Myths about blockchain technology

Some of the myths associated with blockchain are that it is trustless, tamper-proof and 100 per cent secure. Although blockchain removes the need for trust up to a certain extent, to enable the faster adoption of the technology it is eminent to create a third party operator to validate the transaction to create a sense of security. Blockchain data can be reversed if needed in a permission network provided enough individual parties on the blockchain network agree to do so in case of any discrepancy in the transaction.

Application 

We currently see widespread adoption of blockchain in Fintech and real estate sector, and the technology is being explored in industries like cybersecurity, ridesharing, and gaming. The decentralised model of blockchain further makes it cheaper to operate, and the cryptocurrencies, which are not governed by any country, can create globally sustainable businesses without borders.

— The writer is the Founder & CEO of Yostartups, a global startup Pre Accelerator.