A blockchain is a continuously growing list of records, called blocks, which are linked and secured using cryptography. Each block typically contains a cryptographic hash of the previous block, a timestamp, and transaction data.
By design, a blockchain is resistant to modification of the data. It is an open, distributed ledger that can record transactions between two parties efficiently and in a verifiable and permanent way. With digitization transforming the financial services sector in India in terms of speeding up transactions and fraud detection, the Blockchain technology holds enormous promise of further strengthening the sector, a top official with The National Stock Exchange of India Limited (NSE) has emphasised.
“The NSE is experimenting with Blockchain technology,a NSE CTO Sankarson Banerjee told IANS on the sidelines of the fifth Cisco India Summit here.
The Blockchain technology is based on distributed storage of data. A Blockchain is a continuously growing list of records — called blocks — which are linked and secured using cryptography.
“Blockchain, we know, is the best way to create immutable record of things. That opens up a lot of use cases for asset verification – who owns the asset, where it comes from, things like that – or tracing the transaction of an asset,” Banerjee noted.
“The second advantage of Blockchain is that it helps avoid double spend. It allows for unique non-repeatable transaction,” he added.
“Blockchain is genuinely a different way of doing things. Today, the asset is held in physical form and digital records of it are transacted,” he said, making the point that Blockchain technology should be credited for creating genuine digital asset for the first time.
While cryptocurrency is a used case of Blockchain, it should not be confused with the technology itself. The NSE CTO, however, cautioned that it would be foolish to expect that technology could altogether wipe out the chances of fraudulent transaction because hackers do not always target the hard technology part.
“They instead often exploit the vulnerability of the common people and trick them into revealing crucial information,” he said.
“Blockhain can be truly transformative for exchanges, paving the way for them to get into very different businesses. We could start selling cars. We are not selling cars but we might,” Banerjee added, in a lighter vein.