Blockchain : Enticing beyond the Bitcoin realm

Blockchain technology has emerged as one of the most exciting and one of the most talked about innovations in recent past. While the technology is not very commonly employed on a mass scale right now, the hype around it has gone into overdrive. The technology is near the peak of Gartner’s Hype Cycle for Emerging Technologies, despite the analyst suggesting it is still five to 10 years from mainstream adoption. Experts from multiple fields are already that suggesting blockchain will have a huge impact on business operations and information security techniques.

For the uninitiated, Blockchain is the technology that underpins the digital currency bitcoin. The initial use of Blockchain can trace its origins to 2008 with Satoshi Nakamoto, the creator behind the virtual currency, Bitcoin, which served to decentralize the bookkeeping process. However, Bitcoin, a decentralized peer-to-peer payment network, is only one application of blockchain. The underlying blockchain technology, a distributed database that holds a secure and immutable record of past transactions, is the key differentiator that has the ability to disrupt. The shared ledger requiring consensus to update; with tamper-evident properties that are economically unfeasible for any single entity to retrospectively alter is a bigger disruptive threat. The ledger is produced through mass collaboration and represents a ‘single version of the truth.
The most prominent benefits of using blockchain technology over legacy systems include disintermediation of trust, immutable record and smart contracts. These properties are key to understanding the immense potential for blockchain technology to disrupt businesses way beyond what has been achieved so far.

Source: Credit Suisse

India has embraced blockchain with emergence of a few notable start-ups.

Company Segment/ Use Case Company Segment/ Use Case
CoinSecure Bitcoin Exchange Primechain Technologies Data Authentication and Verification
ZebPay Bitcoin Exchange RecordsKeeper Digital Documents Storage
EzyRemit Cross border remittance, Digital Identity Psi Phi Global Cryptolocker to Store and Share documents
Hashcove End to end solutions in Blockchain Signzy Document storage, signing, validation etc.
KrypC Custom Solutions and Training GetXS Protection of digital identity

While the funding activity for Indian startups is muted currently, it could explode in the short to medium term. A few Indian VC firms are already setting aside funds for investment into starups engaged in innovations of Artificial Intelligence, Internet of Things, Deep Learning and of course Blockchain Technology. Globally the funding scenario is a lot more active. As per CB Insights, in 2016, funding investments in bitcoin and blockchain technology startups amounted to USD 550 million compared to almost no investment in 2012. In 2016, there were four companies that raised rounds greater than USD 50 million. The global funding is not just limited to VC funds but include a whole lot of corporate and financial services companies.

Investors into Blockchain Technology Startups(CB Insights)

There are recent doubts emerging on the legality of bitcoin in India. The government has stated that the use of virtual currencies like Bitcoins is not authorized by the RBI and could result in breach of anti-money laundering provisions. The RBI has on multiple occasions cautioned, holders and traders of virtual currency, including Bitcoin, about the potential financial, legal and security risks arising from their usage. Whatever, be the outcome of the current policy, the overall use cases of blockchain technology remain immense.
The entrepreneurs and institutions who are willing to move first will most likely gain the largest benefits. It is evident that blockchain is not the perfect technology in its current state, but neither was Windows or iPhone or even Internet, when they were launched first. However, it is that perfect catalyst for business process changes, and this type of opportunity does not present itself that often.