Page 42 - Banking Finance October 2020

ARTICLE

Disadvantages Y Bank of America
Experts and observers of the technology point out that there Y Facebook
are many disadvantages also in the blockchain like usage of
Y Oracle
excessive energy to function, limitation in scalability, not
being completely indestructible, can grow very large over Y SAP
time and lead to storage constraints and vulnerable to 51% Y Samsung and many more
attacks (if one entity manages to control more than 50% of
the computing power, will allow them to meddle with the
transactions). Blockchain in India

Public blockchains, as discussed earlier, can solve many
Types of Blockchain Indian problems such as providing data security, reducing
There are three primary types of blockchains. corruption, eliminating middlemen, improving the delivery
1. Public: These are designed as fully decentralized, which of service by Governments and Organizations, etc. But the
are open-source, allowing anyone to participate as current scenario in India is more focused on the
users, miners, developers. All the transactions on public consequences of misuse of this technology (particularly
blockchains are fully transparent and anyone can cryptocurrencies) rather than understanding the potential
examine the transaction details. Eg., Bitcoin, the blockchain technology can offer.
Ethereum, LiteCoin, etc.
Having said that, our Government is also not neglecting the
2. Private: Also known as permissioned blockchains, where
technology and the advantages it can offer for Indian
the participants need consent to join the network. The
scenarios. In fact, it has hosted the International Blockchain
transactions, being private, are only available to the
Congress in association with some state governments for
participants in the ecosystem. Eg., Hyperledger, Corda,
helping the adoption of the technology in India. Reserve
Hashgraph, etc.
Bank of India also has setup a research unit in 2018 to study
3. Hybrid: A combination of private/permissioned and the new and emerging technologies (including blockchain)
public blockchains where it has both the benefits like that can help in creating a cashless banking system.
privacy (private), security and transparency (public).
Eg., Ripple, Dragonchain, etc.
Blockchain in BFSI Sector in India
Some Indian companies, like Bajaj Finserv, is using blockchain
Present Status of Blockchain
Though initially started for cryptocurrency, bitcoin, there are
a multitude of usages of this technology and many
organizations are either experimenting with this technology
or in the process of collaborating to know the extent to
which their purposes can be served.

The following organizations have already made significant
progress in the implementation of the Blockchain technology
or exploring the possibility in their operations.
Y FedEx
Y IBM
Y Microsoft
Y MasterCard

Y Huawei Technologies

42 | 2020 | OCTOBER | BANKING FINANCE