Future of Blockchain in India – In this article, I want to talk about blockchain and I want to talk about blockchain in particular and not just about its partner bitcoin, so blockchain is a very big idea it’s a very powerful group of technologies that make something like bitcoin possible but we can make blockchains without having to use bitcoin and because of that this technology is kind of way beyond just bitcoin or even other coins and to explain blockchain.
I suggest that you read a tutorial because it is very complicated and not really my intent here to explain it but it is called or can be understood as a distributed ledger as a distributed accounting where instead of having all the accounting all the books all the logs in one place it is distributed and it’s distributed by the people who are using it and benefiting from it.
Disadvantages of Decentralization
It’s that decentralization that gives it its power because rather than having a central place that you may need to trust or could be mistrusted or abused you have a decentralized place a decentralized system and you have the advantages and the disadvantages of decentralization.
Advantages of Decentralization
the advantages of decentralization are that it’s very easy to repair it’s very hard to injure because if you take down the center or a set of books if you take a server off you still have the rest of the server going and everything is being decentralized and so there’s no loss so it’s things are more robust they are more powerful and adaptable the disadvantage is generally decentralized systems are less efficient they are often slower they often are not as efficient in terms of resource use including money and energy and this is true of the blockchain system.
So blockchain is a way to distribute the ledger the accounting and because of that, you can also distribute trust but the price of that distribution and decentralization is that it’s not very efficient and it’s also waste a lot of energy to make this system work now there are ideas it’s a big idea and there are ideas about how to overcome that which I’ll get to in a few minutes but in general, it will always remain it a blockchain system will always remain less efficient than a centralized one and again that is the cost of having a decentralized system centralization tends to make things more efficient and if that’s criteria as it might be, if you’re trying to do accounting there are some advantages to it and there are many disadvantages to it.
Blockchain is used not just for bitcoin but for many other coins as a basis to make a currency of exchange that does not have a central location meaning that it can be done at a low level at the grassroots level in kind of a crowdsourced way so that is kind of having a currency like that is useful in several ways, one is that it’s useful in places where the central bank is not very effective in places of their developing world or where the central bank is too greedy and is cost they charge too much for their services so you have a decentralized thing that’s really kind of owned by nobody that kind of currency can be used very very cheaply because there are no central cost costs no central bankers to pay etc.
There’s another reason to to want a centralized a decentralized currency and that is if you’re trying to do something that a government does not approve of so here you have something that is outside of the government that could be criminals or that could be something revolutionary or that could be just something that is political or that could be something that is transnational so there’s there’s a bunch of different reasons why you’d want to have a decentralized currency and there’s also the reason why you’d not want to have it which is that you would believe that it is immune to the cycles that plague most businesses and national economies so even if you were just a huge patriot you still might want to have a currency that was not in the central banking system because it actually would withstand and be outside of the kind of natural fluctuations that and political wins that affect national currencies but coins themselves because they’re not based on any fiat currency or wealth or gold or paper or government themselves are often very volatile.
This is one of the arguments against bitcoin as a currency, it is serving more as a time of kind of gold or a lottery rather than a currency because it is so volatile it goes up and down and the currency is not stable and so unstable that it’s very hard to actually spend it because you never know whether things are going to go up or down and is being held in a speculative way so that’s the coins but then there are the many other things that we could imagine blockchain being used for this technology of decentralizing accounting not just useful for currency but for many other things and there are hundreds.
If not thousands of experiments right now of trying to imagine what we could do with a decentralized accounting system and we have things like smart contracts which are used to negotiate trust to negotiate acceptance of conferring approval even though there’s no central agency that is giving it approval it’s giving it through the network as a whole and there are ways in which you could use a blockchain-like system to do all kinds of necessary things if we imagine a world called mirror world.
Where you have many people contributing virtual artifacts virtual objects virtual places and you’re trying to knit together into a single world you need some way to verify that things are legitimate or not that there are not just counterfeits and that would overwhelm a central agency trying to approve everything but you could distribute that approval into a blockchain system.
So the approval is being done at the edges it’s being done everywhere and that’s the kind of system that you would need to have a mirror world you could also imagine other uh reasons for tracking the province the authenticity of a product being made somewhere to make sure it wasn’t counterfeit you could also embed in some ways a blockchain system into the artifact in some way that would ensure its authenticity in a distributed way rather than having a central agency or clearinghouse try to approve things so as we look at the world in its huge size a global world of 8 billion people doing many many kinds of things.
Which all need to be verified or approved or trusted a blockchain-like system to help in that makes a lot of sense it is very inefficient though it costs things it costs us energy and other factors to approve higher than it would a centralized one but that cost maybe worth paying because it’s really hard to imagine a centralized system being able to do that so there are in the laboratories, many experiments to figure out how you can do a blockchain without going through the mining of a coin so most blockchains in the very beginning needed bitcoin needed a blockchain needed bitcoin in order for them both to work you had to have miners doing computation in order of a coin.
In order to make the blockchain work, we’ve since come to understand that that’s not absolutely necessary that you can have other ways to verify the system other than proving work you can also prove to stakeholders you can prove you have other proofs and these are all right now being tested being experimented with part of the penalty part of the cost of bitcoin was this huge use of electricity which is kind of a waste because it’s not really producing anything really valuable it’s just producing more a few more bitcoins that may or may not be worth anything and that cost that environmental cost that energy cost is continuing to rise and so there are alternative methods to actually ensure the veracity of a blockchain without doing huge computational cycles all these things are being experimented with sometimes with alternative coins sometimes it’s.
Alternative Blockchain(Future of Blockchain in India)
These alternative blockchain systems there’s even attempting to bridge different blockchain systems together so that you have like the internet of blockchains the network of blockchains there is more work on making smart contracts there are ways of trying to overcome those deficiencies of the slow decentralization there are lightning networks which kind of do some of the computation on another network that’s in parallel there are lots of very clever and brilliant experimentation but there isn’t been what there hasn’t been.
So far are actually implemented large-scale systems put into real use and I think that’s what most people are waiting for is an implemented use of blockchain besides the coins so we can kind of see how it actually works in real life so you can see how it scales up or it doesn’t scale up I think we’re going to be seeing those in the next 10 years there are lots of pilot programs where they’re trying things this is an entirely new kind of technology it’s very abstract it’s very conceptual in many ways I think there are far more solutions and there are problems to be used for it right now and we’re just kind of figuring out what it’s really good for what it’s the best technology for um and I so I think that in the next 10 years.
We’ll see a lot more attempts to use blockchain but I think for the most part it will be invisible it’s the kind of technology like plumbing or electrical wiring where you aren’t going to see it only will it will succeed to the extent that it’s actually invisible it’s like encryption.
Encryption(Future of Blockchain in India)
Encryption is used every day but most of us don’t even see it and we don’t want to see it it’s one of those enabling technology that works behind the scenes and does its job and if we see it that actually means that it’s not working and a blockchain will be very much like encryption in the sense that when it works it will not be visible it’ll just be working there and so it’s not so much a consumer-facing technology or shouldn’t be it should be one of those things that we don’t even notice just things work and they work a little better.
Future of Blockchain in India – So that’s what I think we’ll see in the The next 10 years is more applications of blockchain but you’re not going to see it unless you’re really looking for it as to the future of bitcoin the honest truth is I have no idea I have no idea whether bitcoin will continue to rise whether it will continue to fall whether we continue to oscillate I have no idea and honestly, nobody has any idea it’s still very much a lottery and so that I can’t say anything about but blockchain seems to be a technology that will be useful in a way the encryption has been useful as a behind-the-scenes infrastructural necessity that is useful in particular cases where we want to pay the price of decentralizing a system not it’s not the answer for everything and sometimes you’re not going to want to pay that price but there will be many applications that will need something that’s decentralized and we’re willing to pay that price in order to have that kind of distributed trust so that’s what I think is ahead for blockchain.