By Ashwani Kumar
Blockchain is an advanced distributed ledger technology that enables a shared ledger among the various parties involved in business transactions. It eliminates the need for a central entity to validate the transactions.
Blockchain technology is an amalgamation of various technologies such as distributed systems, cryptography, etc in which data and transactions stored in blocks of Blockchain are secured against tampering using cryptographic hash algorithms.
The blocks are linked with each other with proper security using a hash function and each block contains details of transactions, the hash of the previous block, timestamp, etc. As it is difficult for an adversary to modify the stored details at majority points. Therefore, Blockchain technology provides better security when compared with a centralized system.
Understanding key concepts
Analysing certain key terms are necessary to understand the various blockchain regulatory frameworks:
Cryptoassets: These may be explained as a digital representation of value or right issued by a private entity that relies on cryptography, distributed ledger technology, or similar technology as a part of its inherent value. For example, Bitcoin (BTC) and Ether (ETH) are two of the most popular crypto assets.
Stablecoins: It is one of the types of crypto assets that seek to maintain a stable value. This may be achieved by pegging its value to assets such as a single fiat currency, basket of currencies or commodities, or other crypto assets.
Distributed Ledger Technology (“DLT”): It is the underlying technology of crypto assets.
DLT refers to processes and related technologies that enable participants (nodes) in a network to securely propose, validate and record changes to a ledger that is distributed across the network’s participants and it does not rely on a centralized controller. Also, depending on their design and architecture, DLT systems may be of different types. Blockchain is a type of DLT which is based on verifying and adding transactions on a block.
India’s role in the Crypto market
India has been particularly active in the cryptocurrency world. In fact, according to some studies, India is home to the highest number of crypto owners and second in terms of adoption rate. Also, more than 60 percent of states in India are emerging as CryptoTech adopters, with over 15 million retail investors. Also, there is a strong institutional presence in the country, with nearly 230 start-ups in this space, presenting plenty of growth potential and opportunities.
Additionally, the Indian tech ecosystem is buzzing with hungry entrepreneurs and a top-tier talent pool, even from a global standpoint. If the crypto ecosystem continues to grow in the same direction as in the past few years, India is well positioned to be a global leader in this space.
For cryptocurrencies to gain ground and acceptance, a concerted effort on the part of institutions and regulators alike is required to educate the audience at large regarding the opportunities it offers to our country. Fortunately, many blockchain institutions have already undertaken this task and are making good progress.
The author is the founder and CEO of HelperWorld