Block Chain

Definition:

The blockchain is a public ledger that is used to keep records of all transactions.

It uses a peer-to-peer distributed computer network system to store records in multiple computers present all over the world.

Every record contains a link to the previous transaction, current transaction details and hash function (using SHA-256 algorithm).

Any change in data is authorized after the change is present in all copies of the file.

Indian Context:

In 2017, Government of Andhra Pradesh has piloted two key projects in Vizag using blockchain technology: managing land records and streamlining vehicle registrations.

India Office of RXIL successfully implemented MonetaGo Blockchain solution which went live recently.

Cryptocurrency – Working

Definition:

A digital currency which is decentralized and encrypted for security is called cryptocurrency.

Working:

1. A transaction using Cryptocurrency

a. Happens on user end

2. Cryptocurrency Mining

a. Verification of Transaction

b. Storage using Block Chain

c. Update to User

Cryptocurrency – Types and Formats

Underlying ASSET

There isn’t one.

Each coin doesn’t exist physically but instead sits as a balance on an enormous public ledger in the cloud that (along with all transactions) is verified by this decentralized computing power.

Notably, this makes it an alternative to a central bank controlled money, although following the abolition of the gold standard, “normal” money generally has no underlying asset either.

Laws Regarding Crypto Trading

Cryptocurrency “was” neither legal nor illegal in India before

After April 2018, Regulated financial institutions in India can no longer provide services to companies or individuals dealing with virtual currencies

But India is open to regulate norms as it has interests in the blockchain.

RBI says the challenge is to get the right balance of freedom of enterprise and control over speculative and deceitful activities.

Future Of Crypto Trading In India

India to remain unfriendly to cryptocurrencies for a foreseeable future.

India doesn’t recognize cryptocurrencies as legal tender.

The underlying technology, Blockchain, will be utilized and in various central government schemes. Currently, only the legalities are being finalized right now.

Supreme Court in a hearing stated that interested parties can still file petitions to RBI which needs to be heard and acted upon within two-weeks time.

Indian conglomerates are investing heaving in implementing blockchain.

The banking sector is particularly interested in using the concept to better their security.