Why blockchain important
Issues with existing banking system:
1. High transaction fees.
2. Technical issue.
3. The sender accounts could have been hacked.
4. The transfer limits could have been exceeded.
5. Debited from one account, never credited on the other side.
6. Centralized banking authority.
7. Net banking fraud
What’s the Blockchain
Blockchain is an open distributed ledger record of transaction in a network connected through P2P
3. Public distributed ledger
Data stores in the block depend on the type of block.
It identify the block and it’s content and always unique.
Change the data of the block will result in changing the hash.
Hash of the previous block
This effectively creates the chain of the block and makes this technology so secure.
Fundamentals of blockchain
Proof of work
Before a block to be added to the chain- A cryptographic puzzle needs to be solved then, a block gets
(A computer solves this by the way and understand this!)
I solved this!
Once the network verifies the proof of
Work and says, YES, the Block will be
added to the chain.
A ledger is a list or a book containing financial transaction.
Every time when a node(computer) do a transaction, they broadcast the details of every transaction on each
nodes in the network and verify it using proof of work.
Blockchain eliminates the unauthorized access by using the cryptographic algorithm. Block chain uses SHA-256 for
In blockchain, when miners use their resources(time, money, electricity etc) to validate a new transaction and
record them on the public ledger, they are given a reward.
A cryptocurrency is a digital or virtual currency that is meant to be a medium of exchange. It is
quite similar to fiat money, except it does not have any physical embodiment.
There are several cryptocurrencies available in the market:
Smart contract are the self-executing contracts containing the terms and conditions of an
agreement among peers.
Advantages of smart contract over traditional contracts:
•Intermediaries, automation and time savings
•Accuracy and transparency
Emerging Blockchain Applications
1) Blockchain in supply chain management:
It facilitates traceability across the entire
supply chain. Anyone can verify the authenticity
or status of a product being delivered.
2) Blockchain in cyber security:
Blockchain quickly identifies malicious attack
Due to P2P connections.
3) Blockchain in voting:
Voters are allowed to vote without the need of disclosing their identity in public.
4) Blockchain in banking:
No central authority.
No hidden charges.
Transaction records on public legder.
•In the area of politics, blockchain is being looked by an organization called “follow my vote”,
which is trying to combat election fraud at the ballot box.
•Blockchain technology can create a decentralized peer-to-peer network for organizations or apps
like Airbnb and Uber.
•Blockchain technology can be used as a secure platform for the healthcare industry for the
purposes of storing sensitive data.
•“Niti Aayog” the government premier policy making body is exposing the use of blockchain
technology legally approved areas such as education, health and agriculture.
•Haber, Stuart, W. Scott Journal of cryptology
•Handbook of digital currency ISBN 978-0-12-802351-8
•Catalini, Christian, gans “some simple economics of the blockchain”