Brave new world
In a digital world interspersed with dark and dangerous corners, blockchain technology provides a ray hope with its promise of security and transparency

Special to Financial Chronicle

Science fiction bears witness to the fact that we can be terrible at predicting the future. We may have got a few things right, but we’ve also got a lot of the fun stuff hilariously wrong. For instance, we weren’t hopping in and out of space in 2001, and 2015 has come and gone and we’re no nearer to owning hoverboards, self-tying shoes or flying cars. On the other hand, it’s quite unlikely that in the 23rd century only males will be allowed to be starship captains and leading expeditions to uncharted deep space. And the chances are we won’t have to wait five billion years before ending up in a lifelong traffic jam (already a particular nightmare of Bangalore residents) as predicted by Doctor Who.

We inevitably lose our restraint while extrapolating the dazzle of hatching technology to our imagined futures, thus forgetting to give due credit to that which has endured for a long time. Cockroaches, for instance, might just take over the world one day. And this whole paper books versus electronic palaver is just silly — but let’s not get started on that. The point is, an idiot-proof way to predict the future is to look at technologies that have been around for a while but are only just discovering how to add value to the human existence. To that effect, we are willing to wager that in the coming decades, the Internet is going to remain a thriving centre of our existence but its very nature might be set to undergo a big change. That change will be in the form of blockchain technology. A disclaimer: if the Large Hadron Collider turns this planet into a football-field-sized ball, all bets are off.

Blockchain for Dummies

If you went looking for a dictionary definition of blockchain, here’s what you’d get: “a digital ledger in which transactions made in bitcoin or another cryptocurrency are recorded chronologically and publicly” (Oxford). Yes, blockchain was initially developed and implemented for the bitcoin cryptocurrency (see box on Satoshi Nakamoto), the design in itself is pretty versatile. It has found potential uses in fields as diverse as banking, insurance, medicine, identity verification, cloud storage, voting, the Internet of Things and distribution of digital products. In fact, some even say that it heralds a new Internet in the new future.

Before exploring that any further, one needs to delve into a basic understanding of what a blockchain is. The explanation can be as complex as one wants. You could inhale the entire Wikipedia page on blockchains without being any the wiser. Or we can keep it simple. After all, you don’t need to be an aeronautic engineer to appreciate the convenience of air travel.

Now, we know that the Internet a giant interconnected network of computers. The World Wide Web, an interlinked resource of information in the form of websites, resides on the Internet. To a large extent, all the information exchanged on the Net today is centralised, that is to say, there is a server that hosts the content of a particular website, and one must navigate there (by using the websites URL) to gain access to it. On secure servers, such as those belonging to banks or email providers, we have to provide verification credentials, usually a username and password combination, to be allowed access to our accounts. Plus, there is e-commerce, cloud storage, communications, data transfer and so much more, all of which are enabled through the Internet. For all of these services, we have to interface with an intermediary. For instance, when we want a ride, we use Uber to hail a cab; to buy something, we use Amazon’s marketplace; and to send and receive money, we need the bank’s digital platform. These are all examples of centralised systems.

The cornerstone of the blockchain design is that it is decentralised. To stick with the same examples, imagine that we could get a ride without having to use Uber, or buy an item directly from a seller without having to invoke Amazon, or receive a digital payment without having to go through a bank. Blockchains would make this possible. In a blockchain, data is stored in the form of ordered records known as blocks, in a database that is referred to as “distributed”. It means the database is not resident on a single server but instead with everyone on the network. The blocks are timestamped and cannot be changed retrospectively. Every time an exchange of information happens in the database, a new block is created with the relevant information (time, date, who created it, etc., depending on the context) burnt into it, and the entire blockchain is updated.

Thus, there is no central point of failure — no single server to conk out or get hacked or be attacked by malware or burst into flames. This has immense security implications, mainly as there is full transparency because of its public nature—whenever a change is made, it is added to the database and everyone has an updated record.

That was a very basic explanation of a blockchain (of course, it’s not that simple—try the Wikipedia page if you don’t believe us). Every entry or transaction in the blockchain is encoded using cryptography and we can only access the blocks we own using our private keys (see box on public–private keys).

But why bother?

Why do we need a new system when we have one that works perfectly well and is a darn sight easier to understand? Easy — refer to the aforementioned points about transparency and security. And then, there is the not insignificant question of privacy.

At this point in time, a large proportion of our personal data resides with a handful of large corporations, Google, Apple, Microsoft, Amazon, Reliance, Airtel, various banks, to name a few. These are the trusted intermediaries we use for our everyday digital transactions. We pour our life savings and private information into these corporations, having confidence that they take adequate measures to keep them safe—and they probably do.

Blockchain is a trust-less user-owned system. We wouldn’t have to hand over our data to anyone and wouldn’t have to be arm-twisted by big corporations to agree to their terms and conditions (which are sometimes exploitative). We wouldn’t have to watch helplessly while they profile us and track our every movement online and off, and we wouldn’t have our private data farmed out to marketing companies.

That’s why.

Blockchain in Action

What are some real-world applications of blockchain technology apart from cryptocurrency? Some people call blockchain the “Internet of value”, which is a pretty accurate definition. Let’s break it down.

The Internet, as we know it and use today, deals with the intangible resource of information. We send emails and messages, post on social media, read the news, buy things, pay bills and so on. You might argue that some of these things are not exactly intangible — certainly not the 55-inch 4K TV you ordered online. Fair enough. But the entire process actually only happens with an exchange of instructions — the shopping site was asked to hold the appliance for you, the bank was told to transfer the cost of the item to the shopping site, and so on. On the other hand, with blockchain, the information itself is the value. A bit more on that in a moment.

The blockchain software is open source. Anyone can use it to create public ledgers that can be written on. Once written, the entries are set in stone. Using this principle, developers have been hard at work applying blockchains to our everyday lives. The following are just a few examples of what blockchain can do.


Cryptocurrency is the most widespread application of blockchain as of now. Cryptocurrency has no inherent value in itself — it is worth what people think it is worth. At times it can be exchanged for real money, as well as for goods and services. But it can also be extremely volatile. The price of a single bitcoin, for instance, rose to an all-time high of US$ 19,000-plus in December 2017, but by February 2018 it fell to around US$ 6,800. At the time of writing, it was hovering around US$ 6,600.

Cryptocurrency is an electronic decentralised currency that isn’t managed by a central bank or administrator but verified and secured by a peer-to-peer network. In other words, individual users on the network are connected to each other directly in a big, complex web. When a transaction is requested, the network swings into action. Using cryptography — beyond the scope of this article, but do read the box on private keys — the transaction’s authenticity is verified and a block of information is created, recording a timestamp, place of origin, creator, or any other data needed. This block, once confirmed, is added to the blockchain, visible to everyone and unalterable.

Thus, when dealing with cryptocurrency, we send value digitally to anyone anywhere who can access the blockchain file. But how does “information” become “value”? The aforementioned transaction confirmations are done by miners. Mining is a sort of record-keeping service in which a cryptologic puzzle needs to be solved, after which the block is confirmed and added to the chain. For their contribution of CPU power and electricity, a miner is then rewarded in new currency. In this way, new crypto-coins are created.

Because everyone in the network can access the blockchain, it doesn’t mean one can swipe another’s crypto-cash. Your individual cryptocurrency stash is secured by a private key.


If Aadhaar is a prime example of digital identity done wrong, then you might want to seek solace in the possibilities of blockchain. By using the distributed peer-to-peer network for securing and encrypting your personal information, blockchain eliminates the need for a central authority tasked with keeping records. Thus, it’s worth reiterating, there is no single point of vulnerability.

At present, our identities are verified by physical or digital documents, maintained by organisations, both offline and online. Often, errors creep in, including duplication, security breaches and so on. With Aadhaar, for instance, questions have been raised about the security of data and there have been many cases of unauthorised access to private information without the individual’s consent. Similarly, if an e-commerce site where we have saved credit card information is hacked, our financial information falls at risk.

These risks could be mitigated to a large extent if identity records were maintained in blockchains, with each user owning their own data as an encrypted block in a larger distributed network. Thus, no single company or institution would hold our data and be able to exploit it, such as selling it to advertisers, or using it to track or profile us.

Digital passports, birth and death certificates, driver’s licences, and probably even an Aadhaar-type system, blockchain ID could theoretically replace physical ID, secured with private keys in a tamper-proof distributed ledger. Each individual, then, could choose to securely share relevant information as required. Companies like the UK-based ObjectTech already have systems in place for this, and have a vision that by 2020 “individuals can own their identity and use it not only to transact online in a safe and secure way, but to pass through borders seamlessly.” The Dubai government last year tied up with ObjectTech to explore digital passports for gate-less travel. Another example is ShoCard, a digital ID secured by blockchain that can be used with a mobile app.

Not just passports, but birth, death and marriage certificates and other identity documents could be secured by blockchain. Estonia, for instance, has been using a blockchain-based digital ID for citizens, which enables them to travel, access government services like education and healthcare, vote, pay taxes and more (see box). They have recently expressed an interest in launching their own cryptocurrency, which is being called estcoin by the Internet.

Cloud storage

We are increasingly depending on the cloud to back up or store our data. Dropbox, iCloud, iDrive, Google Drive, OneDrive, SpiderOak, Mega — we could run out of space listing them all. Despite the presence of zero-knowledge providers (the provider has no knowledge of your data, which is encrypted at all times and only decrypted using a key that resides on your computer; this means if you lose your key, your data is gone forever), it remains a centralised system and we are still having to put our faith in a single entity to keep our data safe. All of this could change with blockchain.

An example of this kind of distributed cloud storage is Storj (, which offers cloud storage, file transfers, backup and recovery, and media content storage and delivery. Files on Storj’s services are distributed globally, which means the companies don’t have to maintain data centres. This makes it cheaper. With Storj you only pay for what you use, as little as Rs 1 per GB per month and about Rs 4 per GB downloaded. And yes, you can use cryptocurrency to pay for it. You may also earn some by renting them your free hard disk space. Storj’s cloud platform is set to roll out in early 2019 and one can sign up to their waitlist.

Filecoin ( is another up and coming distributed cloud storage service. Like Storj, you pay to store and retrieve data on the network, and earn some cryptocurrency (in this case filecoin) by hiring out your free gigabytes to host files. Filecoin is looking at mid-2019 as an optimistic launch date.

Digital voting

Blockchain as the upholder of democracy? Yes, we can see that happening. After all, what else could a community-owned technology stand for? Blockchain has been explored as an option for e-voting and — no surprises — Estonia is a trailblazer here. How e-voting works is simple (provided you understand the basics of blockchain tech, of course): a voter verifies their identity and eligibility to voice, the information being saved on the blockchain, locked with the voter’s private key; next, the voter transfers a special voting token provided to them — think of it like having your name on the electoral rolls — to the candidate they are voting for. All of these transactions are recorded in the blockchain ledger, so a voter can actually verify that their vote was counted. Since the ledger is set in stone, vote tampering would be next to impossible.

Sounds fantastic, right? So why is e-voting not more widespread (besides the obvious reason that those who want to rig elections won’t let it become the norm)? Well, at the moment, says Bitcoin Magazine, there are “concerns that existing platforms are vulnerable to fraud, corruption and sabotage”. An independent team of e-voting experts who analysed Estonia’s 2013 municipal elections found “staggering gaps in procedural and operational security” ( Election officers were also found to be downloading keys insecurely or using unsecured devices.

This doesn’t mean that e-voting is a closed chapter. Blockchain developers continue to work on and improve upon a tamper-proof, open-source, autonomous voting system that uses cryptography as well as masking software to make secret ballot possible the digital way. The day it becomes possible, it will shake up our existing political systems.


Sharing healthcare data among hospitals, medical professionals and insurance companies securely, at the same time maintaining patient privacy, remains a challenge today. Many countries, however, are exploring blockchain technologies to get around this. With health records securely stored in a blockchain, secured by a private key in the patient’s possession, access can be granted to the relevant stakeholder as and when needed.

Estonia’s (of course, they are at the forefront of this revolution too) eHealth Authority has partnered with Guardtime, a platform with “over 150 cryptographers,  developers and security architects...defending networks from nation-state attack”, to accelerate blockchain adoption for patient records. In fact, in February this year, Guardtime and their partners launched the world’s first blockchain-supported Personal Care Record Platform in the UK. Known as MyPCR, it serves 30 million National Health Service (NHS) patients, giving them instant access to their medical records via smartphone.

Another platform for decentralised healthcare records is Medicalchain, powered by two blockchains. They have recently partnered with The Groves, a medical centre in London that provides NHS care to the community as well as private medical care. A pilot project was given the green light in July this year that allows Groves patients to create a free wallet to hold their records, and accessing services. The Medicalchain platform also allows patients to pay with their own MedToken cryptocurrency.

Land registry

The first blockchain-secured enterprise-ready platform for real estate records is the American company Ubitquity. In 2015 they joined forces with the real estate registries in two municipalities in Brazil to go paper-less and secure land records in a bitcoin blockchain. Details such as address, owner, property details, zoning information and more are stored in the blockchain, making it much easier to access the data. This increases transparency and reduces or remove errors, forgeries and illegal deeds, ownership transfers and tracing missing heirs.

Blockchain adoption in India has been slow — even the legality of cryptocurrency is up in the air — but one sector that has seen a flurry of activity is property. Land-related transactions in India are fraught with problems. Titles are often disputed, records are not properly updated, and authorities corrupt and difficult to deal with. The National Land Records Modernization Programme was launched more than a decade ago to computerise land records and many states have started the process. But computerising and securing are, of course, different things.

In 2017 the Sweden-based ChromaWay partnered with the Andhra Pradesh government to implement a pilot that uses a blockchain-based system of land registration to clamp down on fraud and misuse. Andhra Pradesh and Telangana have been pioneers in this regard, though other states, like Karnataka, Maharashtra and Haryana have been showing interest. More and more developers in India, Snapper FutureTech for example, are offering blockchain-based property registration services.

Integrating smart contracts into the system would also eliminate the interference corrupt officials and intermediaries who make the real-estate business such a murky affair in India. Smart digital contracts can self-execute, verifying and executing the terms agreed upon by the buyer and seller without the need of a third party.

The third wave Is nigh

The blockchain represents a single version of the truth. This is what makes it so potent. Should blockchain go mainstream, it will shake up the Internet and Web as we know of today, transmuting it into something quite unrecognisable. Some are calling it Web 3.0 and already taking trumpet lessons for the welcome fanfare

Dialling back a bit, recall that the Web at first was essentially a collection of lumps of information. There were websites, with text and images on them, that we could read. The next generation, creatively dubbed Web 2.0, was all about interactivity, interoperability and responsiveness. These were websites one could interact with. User-generated content, from posting comments on blogs to creating personalised content views, was at the heart of Web 2.0. Mobiles, tablets, computers — we got a seamless experience irrespective of platform. This is where we are at at the present time.

Web 3.0, when it gets here, will be the proverbial spoilt brat who upends the game board. Not because it’s a sore loser, but because it will herald a disruption like never before, no metaphors intended. You guessed it — decentralisation will the keystone of Web 3.0. It will be user-centric, powered by blockchain technology, and a more transparent and secure space than it is today.

By far the most disruptive thing the third wave of WWW will do is make traditional business models go belly-up. Most significantly, the monopolising ways of multinational corporations are likely to come to a grinding halt. Rather than the current model where clients (that is, us) connect to the server (the website), Web 3.0 data will be held and secured by a peer-to-peer network. We won’t have to trust big companies like Facebook, Google, Amazon and Apple to hold our data, nor be forced to consent to their terms of service.

Some experts believe that rather than HTML, Web 3.0 will run on a new, simpler language. Because of its architecture, it will be faster, more intuitive and intelligent, more accessible, and offer better connectivity. According to Matteo Gianpietro Zago, chairperson of the Internet of Blockchain Foundation (IBF), and founder of Essentia One, a framework for a working Web 3.0: “The transition to a trust-less, anti-corruptible and anti-censorship system is not only necessary, it’s inevitable, and the changes will be catastrophic.”

A roadmap?

Unfortunately, there is no timeline yet for the rollout of the new Internet and Web 3.0. But organisations like the IBF are working for “a new anti-censorship permissionless initiative for a decentralised web”, and to enable a “transition to the Web 3.0, a user-centric web where users fully own their data, identity and digital assets.” (

Blockchain enthusiasts and developers have come a long way in making this new decentralised internet seem like a very real possibility. Zago’s Essentia One ( framework referred to earlier can be used by anyone anywhere wanting to develop blockchain solutions secured by cryptography and its data owned by users.

Another one to watch out for is Blockstack, “a new internet for decentralized apps” ( Blockstack applications are server-less and user-owned as well, with no intermediaries, no passwords, no central data centre, no tracking. The suite of Blockstack’s decentralized apps (dapps) can be accessed through the Blockstack Browser. Users may choose from a suite of blockchain applications where they don’t have to sign away their data. In fact, Blockstack domains don’t use the usual domain name system (DNS) registry like most other websites (because they don’t live in a central server but with their owners under their personal lock and key). For developers, Blockstack is an easy way to start building blockchain apps and getting paid if the apps become popular. In fact, a fair few dapps are already available on the platform.

A new democracy?

Why stop only at the Web? Blockchain proponents herald a new democracy, a radical change in how we live. The Democracy Earth Foundation ( dreams of a borderless peer-to-peer democracy, “a new style of politics aiming for planetary impact” where political mediation is no longer required. They are looking to build a global movement for liquid democracy based on blockchain. Liquid democracy is a fairly new concept that combines the best of direct and representative democracies to give rise to a fluid voting system whereby voters can either vote directly or delegate voting power to a trusted party or expert. To that extent, Democracy Earth are working on Sovereign, a blockchain governance protocol that is an all-inclusive decentralized governance platform. It can be used for voting, securing citizen data and borderless governance, among other things.

There’s always a but...

For blockchain to become mainstream, a lot of things need to change. Scratch that, almost everything needs to change. For starters, it will require all users and providers/operators to agree to move to the new platform, and we will have to learn new ways of doing things. Integration with existing systems, where required, might be tricky. And while strong encryption is one of the hallmarks of the blockchain, it isn’t completely bereft of cybersecurity concerns. Neither is it indestructible.

Then there is the capacity issue. At the moment, the Internet uses large-capacity servers residing in data centres that can quickly process data, respond to requests, verify transactions and so on. In a decentralised system, where everything relies on the network and needs a consensus to execute, it might lead to a slower performance. Also, as the blockchain grows, it will demand ever-increasing storage, another factor that could lead to a slowing down. This is in direct contradiction to those who claim that a blockchain-based Internet will be faster. Who’s right? Our guess: plenty will have to change before this becomes a reality, and we are possibly looking at a completely new way to network computers.

Finally, words of wisdom from Blockgeeks, a blockchain tech company providing smart contract solutions: “It’s important to note that for the blockchain to work, must...agree to work under ethical standards. Once, and only if, these standards are adhered to, the blockchain could become a powerful tool for improving business, conducting fair trade, democratizing the global economy, and helping support more open and fair societies” (

Who in the world is Satoshi Nakamoto?

Short answer: nobody really knows. The US National Security Agency (NSA) claims to be aware of this individual’s real identity, but they aren’t telling. So, for all we know, they might be bluffing. But the reason Nakamoto is relevant here is that they (since we don’t know Nakamoto’s gender, we’ll use the singular “they”) are known as the inventor of the bitcoin protocol. In other words, Satoshi Nakamoto invented cryptocurrency. Some believe that they aren’t an individual but a group of people.

Nakamoto’s blockchain concept was published as a paper in 2008, titled “Bitcoin: A Peer-to-Peer Electronic Cash System” (available at In it they envisaged a decentralised method of transacting using a peer-to-peer network to prevent double-spending. Since a unit of digital currency is a piece of software, conceivably it can be copied and reused ad infinitum. Unless there is a method to record and verify these transactions in an infallible, incorruptible database. That is, a blockchain ledger where the transactions are recorded and verified. The first bitcoin block — the genesis block — was deployed in January 2009. Since then, with each transaction, the bitcoin ledger has been getting bigger and bigger.

There’s plenty of speculation about the identity of the shadowy bitcoin creator and a number of people have even claimed to be Nakamoto, but there is no conclusive evidence yet. Nakamoto “disappeared” in 2011, claiming in their last known email to another bitcoin developer to have “moved on.”

Unlocking the blockchain

Even though blockchain data is secured by what is known as public-key cryptography, there are actually two keys involved, a private one and a public one. The private key locks the data and it is owned by the individual to whom the data belongs. The public key can be given to someone else (or it can be public), and it can unlock the data.

You can probably see the flaw in logic here — if the public key can open the lock, what’s the point of the private key? Well, here’s the nub. The public-private key pair is related in a way that the public key can only work with its corresponding private counterpart. So, it will unlock the data only when it confirms that the data was indeed locked by its particular private better half. And since only the data owner has the private key, it also verifies that they are the owner of the data as well. Thus, it works as a digital signature.

This is essentially how blockchain transactions are done, one private key held by the owner of the data, the other public key, held by anyone authorised to access the data. Cryptographic keys are very large mathematical numbers — the private key is the longer of the two, used to “sign off” on each transaction and confirm that it originated from the holder of the key. Once signed, the data cannot be altered. The public key is derived from the private key mathematically and is a shorter number. Public-key encryption also uses hash values, but you’ll have to Google that as we’re out of space.

e-Estonia: A new model for Aadhaar?

Estonia has built a blockchain-based digital society that is “an efficient, secure and transparent ecosystem that saves time and money”. Known as e-Estonia, it runs on a platform called X-Road, an open-source data exchange layer that allows public and private e-services to link up. X-Road is centrally managed but does not have a central database — all the information is distributed on the network.

With an eye towards greater transparency, the Estonian government started working on blockchain technologies in 2007. It resulted in the development of the KSI blockchain that was deployed in Estonian government networks in 2012 for use in health, judicial, legislative, security services and more, with plans to expand into other spheres. This way, Estonians own and control their own data, including their IDs and biometrics.

“With KSI Blockchain deployed in Estonian government networks, history cannot be rewritten by anybody and the authenticity of the electronic data can be mathematically proven. It means that no-one — not hackers, not system administrators, and not even the government itself — can manipulate the data and get away with that” (

As of September 2018, Estonia holds top spot among 107 countries in the National Cyber Security Index (NSCI), a global index that measures how prepared countries are to ward off cybersecurity threats. There is a lesson here for those who choose to learn.


Payal Dhar