The Blockchain is a technology which is helpful in maintaining open records or blocks between seller and buyer of cryptocurrency. Cryptocurrency, as we have already understood in earlier articles is “a cryptographic money which a computerized type of cash that is being utilized progressively everywhere throughout the world. When we compare any of the cryptocurrencies with the fiat money i.e. cash, the digital money is much more productive as far as utilization and exchange costs are considered.”
Let’s understand Blockchain further. Technically each record has a HASH pointer to link last connected block or record, a Time Stamp and transaction data. Nature of this data is
- irreversible and
- it is verified by the miners.
Once the record of any information is added to this open ledger it is difficult to alter it due to complex nature and verification protocol of blockchain.
Computer Machines with high Byzantine fault tolerance are used for blockchain records. It is
- decentralized in nature and
- its design is secure.
When we see the history of the blockchain 1992 Bayer, Haber and Stomata introduced Merkle Trees to improve its design for better efficiency to collect the documents in the record. Officially In 2008 first blockchain was invented and utilized by Satoshi Nakamoto as the tool to support and maintain the records of Bitcoin. Satoshi Nakamoto is the unknown inventor of the first cryptocurrency ever, which is the greatest invention in the financial market. He is the one who initiated the whole cryptocurrency-network.
Blockchain Technology is:
- an open record,
- common record,
- used in various fields like community management, constituency voting, locating food joint information etc.
Therefore we can conclude that it is an open piece of information available for all.
As we are now clear with what is Blockchain, in this essay further we will understand:
- What is the Internal Structuring of Blockchains?
- What Is Block And Block Time?
- What is the role of government and the challenges faced by Blockchain Technology?
- What are the Utilities of Blockchain Technology?
- Are there any negative aspects of Blockchain?
- To Summarize
What is the Internal Structuring of Blockchains?
In terms of technical understanding, structure means per day advancement of blockchain records, as a phenomena participation of miners where numerous supercomputers are always chasing the data. The process of identifying and authenticating the information is carried by professional miners. Blockchains are considered as value-exchange protocol.
If we talk about the features of a blockchain:
- A blockchain is decentralized in nature and
- It is a distributed digital data in the form of ledger.
- This data is used by miners to record transactions through multiple computers so that the record cannot be altered retroactively by the participation of miners or professionals.
- They are self-authenticated by the virtue of mass collaboration collectively driven by self-interests.
As a result of huge participation robust workflow brings uncertainty regarding data security, which is marginal and participants are competing for it. This process ultimately helps in keeping a check that any unit once used may not be double spent.
- Blockchain technology should be used in exchanges, as professional information can be completed more safely and quickly.
- A blockchain can transfer and assign rights or title because of its nature and its format which value offer and acceptance.
- This entire process allows the participants to audit and verify transactions in Blockchain database autonomously used by parallel networks and it is distributed among time stamping servers.
Let Us Now Understand What Is Block And Block Time?
Valid Batches of transaction clustered, encoded and hashed together are called Blocks. Two blocks are connected by hash and this process for linking one block with another is done for the purpose of
- authenticating and
- validating the information.
Blocks are earned and created based on the volume of their daily investment.
These blocks are proof of work which is carried at blockchain at different professional levels that too at the parallel node. Sometimes, this high-end computation creates blocks every second depending on the blockchain you are working on. For example, Bitcoin has block time of 15 minutes whereas block time of Dash is 30 to 40 seconds.
As we have till now observed the meaning of blockchain, its structure and block & block time, it’s now time to understand the role of government in this entire game of cryptocurrency.
What is the role of government and the challenges faced by Blockchain Technology?
As reflected by professional nature blockchain technology is
- No permission is required to work in it.
- A huge immutable spreadsheet which cannot be hacked.
However, there are challenges and threats which occur time to time within the present environment.
Challenge 1: Government Guidelines
Role of government guidelines related to finance industry is the biggest challenge faced by the blockchain revolution. Now-a-days that way government machinery and private organizations are in favor of an open distributed public account system which can also be called blockchain technology. Blockchain revolution is emerging and bringing the security to the financial environment of the society.
Challenge 2: High electricity Consumption
Another challenge is energy consumption of the special supercomputers involved in the computation. This high energy consumption incurs the high cost of electricity therefore as a solution huge data center are created at places where the cost of electricity is low and
- it is available in abundance and nonstop.
- “proof of work” mechanism is used by bitcoin and etherium blockchain technologies.
- Rather now-a-days Etheruim technology is following the concept of “proof of stake” mechanism.
These challenges are part of the blockchain technology and depending upon the financial strength of the country masses can be benefitted through positive use of this technology. Based on the positive intention this challenge can be worked out very easily once government and private bodies are gathered at the same platform.
Challenge 3: Initial setup and hardware cost
The cost involved in the initial setup and installing the hardware is huge. If in a real sense any organization invests in the blockchain, then profits can only be enjoyed in long term. But remember other challenges are also there and cannot be ignored as they are also interlinked.
Challenge 4: Legal integration of the blockchain with government authority or by law of land.
If legal acceptance of the blockchain system is supported by law and regulations should be drafted hand to hand.
- A generous and positive attitude towards its establishment in the county brings more trust and authenticity among countrymen and at global platform too.
- This challenge is conceptually and technically faced by every economy depending on their internal tear and wear.
- Every country has different perspective to handle this technology in its own way.
Challenge 5: Public perception and participation
The participation of the public is again a huge challenge because somehow actions or policy formation of the government are the replicas of public demand and supply.
- Government regulations depend upon the direction of mass investment in crypto forms of currencies.
- Its legality or illegality is judged on all allied parameters when synchronized with people acceptance and it should go through 360 degrees by law of land.
- Rather really or on actual grounds, it is handled very differently worldwide.
Challenge 6: Privacy and secrecy
Keeping things secret and maintaining the privacy is another challenge faced due to open nature of blockchains.
- Technology is improving that way, but still,
- you should be an honest taxpayer to hold cryptocurrency if it is legal in your country.
Challenge 7: General Behavior of government and policies
Policies and behavior of the government both are entirely different phenomena to go side by side.
- Actually because of complex nature of any economy and
- its functional challenges are different from country to country and from economy to economy.
What are the Utilities of Blockchain Technology?
As the whole world is moving towards the technological up-gradation, there are several uses and importance of this technology.
- Very interestingly, in India, the government is keen to use blockchain technology to maintain the records of land so that issue of its duplicate sales can be worked out. That way government has taken the considerable measures to control the same.
- Banks can be run on this technology provided more established systems are required to share information of accounts at the open platform and insecure manner.
- Acceptance of cryptocurrency by different industries like Music, Films, finance, banking, and automobile etc. makes blockchain technology favorite among different segments of society.
Are there any negative aspects of Blockchain?
Yes, any technology, if not used with a positive mindset, can definitely be used for wrong purposes.
- Generally, people do not have guts to speak about it.
- The big social challenge is involvement of illegal that means terrorist activities.
- If such illegal elements use this technology negatively it can really create havoc.
Therefore, most of the time governments are busy in making regulation related to entire blockchain phenomena. Every economy and its operational country have different challenges to implement this technology in a positive way. Negative issues and challenges occur from time to time which can be resolved according to the need of time.
Therefore, when we conclude closely we will find that every economy, people, law have the different point of views to accept any technology available around. Definitely, blockchain technology is a great innovation provided understood and taken positively worldwide. It has challenges to work upon but at the end of the day, it has protected the human mental peace.
As already I have mentioned that intention at the back of any invention or technology always decides how it is used. Actually when we overall conclude the best part of blockchain technology is its transparency. All above-mentioned challenges if taken care can become bliss also for any country or its economy if they behave positively towards the challenges.
Every land and its laws have its own issues to work upon, only with the help of positive legislation and regulations these challenges can be worked out. Blockchain technology can be adopted three sixty degrees in all industries, in every economy, among people if legally adopted by government legislation behind it.
In the current scenario, in reality, everyone has craze towards it, maybe it is “legal” or “illegal” but people are showing a keen interest in cryptocurrencies and blockchain technology.
Let us see and we wish good luck to this invention as we hope to listen to something positive by the government of India in nearby future!
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