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Blockchain: The cutting-edge tech that's changing our lives

This technology will have a great impact on users and service providers in all sectors. However, there is a need for identifying the roles and responsibilities of users and service providers with regard to security aspects in the blockchain environment

Blockchain: The cutting-edge tech thats changing our lives
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Cryptocurrency is a hot topic now-a-days and blockchain technology is the bedrock of it. The term blockchain was first described in 1991. The technique was adapted and reinvented in 2008 for creation of blockchain-based cryptocurrency called Bitcoin. Blockchain technology is also called Digital Ledger Technology (DLT). It is a decentralized, distributed ledger that records the origin of a digital asset. The blockchain database stores encrypted blocks of data and chains them. The decentralization of the digital asset enables real time and transparent access to the public. Due to transparent ledger of changes, integrity of document is preserved, creating trust in the asset. With the blockchain technique, digital documents can be time stamped so that it's not possible to backdate them or alter them.

Components of blockchain

Blockchain comprises database, software application and connected computers. It consists of three concepts: blocks, miners and nodes.

n Blocks: Every chain consists of multiple blocks and each block has three basic elements -

1. The data in the block

2. A 32 bit whole number called a nonce. The nonce is randomly generated when a block is created, which then generates a block header hash.

3. A hash is a 256 bit number attached to the nonce. It starts with a huge number of zeroes. When the first block of a chain is created, a nonce generates the cryptographic hash. The first block in the chain is called the genesis block. Each new block in the chain is linked to the previous block.

n Miners: Miners create new blocks on the chain through a process called mining. In a blockchain every block has its own unique nonce and hash. It also has a reference to the hash of the previous block in the chain. Miners use special software (Proof of work) to solve the complex problem of finding a nonce that generates an accepted hash. When that happens a block is added to the chain. Making a change to any block in the chain requires re-mining not just that block, but also all the blocks that come after. Because of this reason it is extremely difficult to manipulate data on a blockchain.

n Nodes: Blockchain is a distributed ledger connected to the chain via the nodes. Nodes are electronic devices that maintain copies of blockchain. Before the mined block is added to the chain, It should be approved by the majority of nodes in the system. Hashing, proof of work and need for acceptance by more than 50 per cent of nodes make blockchain secure.


1. Greater transparency and traceability of payments

2. Secure management of digital relationships using smart contracts that run when predetermined conditions are met

3. Fewer intermediaries and therefore cost savings

4. Tracking and managing access to critical data in real time

5. Prevention of frauds and mishandling of data


Because of inherent security measures and public access, blockchain has applications in all sectors, mainly banking and finance. IRDBT (Institute for Development and Research in Banking Technology) will develop use cases for applications in the financial domain. Blockchain can be used for the secure transfer of items like money, property, contracts, etc., without requiring a third party intermediary like a bank or government.

Governments and businesses can integrate blockchain technology to facilitate safe and secure transactions and operations. Telangana government has tied up with Tech Mahindra in this regard. It is collaborating with IIT Hyderabad and CDAC (Centre for Development of Advance Computing) to build a state level blockchain platform. It has also partnered with NITI Aayog for adopting blockchain in governance and has a vision to position Hyderabad as one of the leading blockchain cities in the world. It has implemented this technology in land registry, chit fund operations, digital education certificates, micro finance for self help groups.

This technology can find utility in other sectors including agriculture and healthcare as it can be used to trace and track the supply chain from source to sink. Blockchain based supply chains with QR codes can solve the problem of spurious seeds for farmers. This technology can be deployed to solve food wastage in the country by balancing supply and demand. In the health care sector, the entire supply chain of medicines can be recorded and supply of counterfeit medicines can be curbed by using blockchain technology. Similarly the excise department can use this technology to weed out the menace of supply of spurious liquor.

Crypto - The new age coin

Crypto currency is a collection of binary data which is designed to work as a medium of exchange. Each cryptocurrency works through blockchain technology that serves as a public financial transaction database. Bitcoin has held the attention of the public more than any other cryptocurrency and ushered in a new age of decentralized digital currencies including Ethereum, Shiba Inu, Cardano, Ripple, etc.

NFT (Non Fungible Token)

Non fungible means qnique. NFT is a digital asset such as a piece of music, image, photograph, painting, meme, an audio or video file which is available for sale online with digital proof of ownership through blockchain. Most NFTs are part of the Ethereum blockchain. Recently Amitabh Bachchan sold a number of NFTs, including his recital of his father's famous poem Madhushala.

Applications in telecom

1. Settlement of roaming charges: At present intermediaries control roaming partner settlements and time lines for resolving any related issue can be as long as two months.Smart contracts on blockchain reduce/eliminate the role of intermediaries by automating the SLAs (Service Level Agreements) which will provide a real time view to all the stakeholders in addition to instant settlements reducing the costs.

2. KYC documents collected from customers can be placed securely with a blockchain solution which gives greater control.

3. SLA monitoring can be made easier with blockchain powered smart contracts.

4. MNP processing can be stream lined with this technology

5. With digitalisation customers can pay bills using their mobile phones and get rid of any third party intruder

6. To prevent frauds, telecom service providers can use the security level of blockchain ledger.

7. Blockchain in CEIR: DOT has developed CEIR (Central Equipment Identity Registry) which is a database of the IMEI (International Mobile Equipment Identity) numbers of blacklisted mobile handsets, white list numbers which are IMEI numbers of genuine mobile handsets shipped by vendors and suspect list which is IMEI numbers of mobile handsets reported as stolen. CEIR acts as a central system for all the operators to share the list of blacklisted mobile terminals so that devices blacklisted in one network will not work in other networks even if SIM is changed. The CEIR will be accessible to all the stakeholders including police and citizens. Citizens can find out whether mobile handsets purchased by them are genuine or not.

Way forward

Bitcoin and other proof-of-work cryptocurrencies require large amounts of energy, due to the computations needed for mining, and produce lots of e-waste as hardware becomes obsolete. A large number of cryptocurrencies have evolved using proof-of-stake blockchain technology which produce considerably lower environmental consequences.

Nevertheless, this technology will have a great impact on users and service providers in all sectors. However, there is a need for identifying the roles and responsibilities of users and service providers with regard to security aspects in the blockchain environment. NIC (National Informatics Centre) has set up a Center of Excellence (COE) for blockchain technology at Bangalore which aims to provide blockchain as a service and facilitates stakeholders to benefit from shared learning, experience and resources. As a recent development, the Union Government will introduce a bill seeking to regulate cryptocurrency, to facilitate creation of official digital currency to be issued by RBI and to ban all 'private' cryptocurrencies. But the bill does allow "for certain exceptions to promote the underlying technology of cryptocurrency and its uses".

(The author is a former Advisor, Department of Telecommunications (DoT), Government of India)

L Anantharam
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