How Can Blockchain Technology Change India
Opportunity India Desk
Jul 18, 2022 -
6 min read
Blockchain is a distributed ledger technology that allows users to transact and record transactions chronologically in real-time. It boasts of a tamper-proof, transparent, cryptographically encrypted, and decentralised transaction where users act as nodes across the globe. In order to adapt and solve problems with blockchain, users need to find the type of blockchain that suits a purpose. Blockchain can be open or closed source, public, private, or consortium. It can be permissioned or permissionless too, depending on the use case.
According to Arjun Kalsy, VP Growth, Polygon, in a BusinessDay article, “Blockchain technology is already seeing a lot of innovations in the financial sector, providing financial inclusion to millions of people in Africa and Asia and allowing easier remittances for immigrants.”
With lines of codes, people can use predefined agreements to guide and govern their business engagements. Such logic can be in the form of smart contracts. With a smart contract, assets can be tokenised or programmed without needing a third party. If adopted, such programmatic logic would allow a programmable universe called Metaverse and a world where all things are tokenised as assets and can be connected.
The immutability of the Blockchain has been first demonstrated in Bitcoin, where transactions are recorded in real-time and cannot be changed. This led to the phrase “Don't trust but verify” because every record cannot be altered and can be seen from block to block, chain to chain, as far as the transaction is performed on the said network. Like Bitcoin, successive blockchains have adopted and reiterated the need for immutability. Hence, building more sophisticated immutable real-time networks for finance, health, supply chain, and various use cases.
Since the system comprises a set of codes, can function with a third party, and is cryptographically secure through encrypted technologies, the blockchain network will boast data integrity when applied to Indian businesses or the economy. Unlike traditional systems where data is stored in a centralised cloud, if adopted, Blockchain can allow decentralised data, which enables individuals to manage and secure their data. On the other hand, it helps governments obtain first-hand data and check crime while running a more data-driven economy.
With sets of logic, users can transact without a third party. That way, a community can be autonomous and fully democratic. Here, with the concept of decentralised organisations, governments and individuals can crowd fund and build collective businesses and projects with only audited and well-programmed logistics and tokens, serving as the governance token. The governance token allows users to secure, contribute and run the community as enshrined in the smart contract.
Having understood what blockchain is and its benefits in India, it is necessary to briefly discuss the top blockchain use cases in India. Before discussing the blockchain use cases in India, it is worth noting that any business that requires data integrity, transparency, real-time security, automation, and immutability requires the blockchain. However, it is the task of developers and c-suite executives to choose the kind of blockchain that suits specific blockchain use cases for Indian businesses and projects.
Top Blockchain Use Cases In India:
As explained in a previous article, the Metaverse is a programmable universe where physical assets exist as digital twins in a semantic web. With the help of AR, VR, IoT, wearable devices, and blockchain, individuals and governments can build programmable businesses.
Top applications of the metaverse for India include entertainment, trades, advertising, staff recruitment. For the governments, the metaverse can help them preserve the Indian symbols, cultures, and values, including sports. This way, people can watch, visit and access the metaverse temple, for instance, by wearing wearable devices and connecting to the metaverse.
Individuals can tokenise (cryptographically digitalise) shares, rewards for their users. On the other hand, governments can tokenise lands, bills, notes, and applications so people can apply or utilise services by purchasing specific tokens. Depending on the application, individuals can opt for a security token, fan token, non-fungible token, or fungible token. With fan tokens, companies can tokenise rewards for their community, security tokens can tokenise shares and dividends, and with NFT and Fungible tokens, they can invent, create and build robust solutions.
Cross-border payments are often one of the limitations of small and medium-scale businesses. With blockchain, companies can launch tokens that are pegged with some indigenous payment methods or currencies to fasten businesses among countries. For instance, Ripple Lab and Stellar use their native token to allow consortiums and corporations to transact and overcome cross-border remittance.
Like the Chinese government and others adopting a central bank digital currency, Indian governments can do so. The CBDC can help the government circumvent and build robust monetary policies and economies, and it will also help provide banking services to the unbanked population.
As a response, India is reported to be interested in a central bank digital currency, according to an announcement of the Reserve Bank of India’s Deputy Governor T Rabi Sankar on the Union Budget for the ongoing fiscal. As a result, India will gradually introduce the Central Bank Digital Currency (CBDC) in its ongoing fiscal.
Also, according to the central bank, “The introduction of CBDC has been announced in the Union Budget 2022-23, and an appropriate amendment to the RBI Act, 1934 has been included in the Finance Bill, 2022. The Finance Bill, 2022 has been enacted, providing a legal framework for the launch of CBDC.”
Without any doubt, blockchain will change the Indian economy for good. Helping the government-run a transparent, secure, and trustless economy will help individuals innovate and create robust solutions to solve indigenous problems. Adopting blockchain and other emerging technologies is India’s best bet to becoming the world’s biggest economy.
(Writer is a Co-Founder and CMO of a Web 3.0 startup Acknoledger)
