blockchainsolicitors

[blockchainsolicitors]

WHAT IS BLOCKCHAIN ?

We understand that this new terminology of ‘blockchain’ has been gaining a lot of news lately around, until you were not under a rock. It is being understood that you the reader has been keeping up with the trend and the news that has been developing around lately and as a person of ordinary prudence would be able to understand the basic concepts of a online transaction ledger.

However let’s start with an example of a 'motorbike'.

In present day market if you have to purchase anything say a 'motorbike' for example, then let’s have a brief overview regarding the same.

First, you go to a showroom and select the colour of the bike.

Second, you can only make a purchase on a condition that you complete the paper work that also comes along with motorbike plus with the other added bank verification, insurance process, license and other mandatory made rules.

Third, let’s say that after the purchase, you have used the said 'motorbike' for ‘three years’ and now you wish to sell it to off and maybe purchase a car.

Fourth, while selling off your used motorbike to another person, there will again be a set of mandatory paperwork that will be needed to be complied by you as well as the second-hand purchaser.

(This entire procedure of purchase and sell as well as change in ownership, is recorded and maintained by the government RTO in India). 

Which consist of RC details, engine number, chasis number, purchaser address, license and other details and this entire data is stored in a government record or say ledger. Furthermore insurance companies also record and maintain their own data ledger which is related to the vehicle if in case any insurance related claim has been made by the bike owner over the said vehicle.

NOW, what if the ledger itself was ‘responsive’, ‘interactive’ and ‘self functioning’ based on a ‘smart-contract’ however [we will not be getting into (smart contracts) in this write-up]

The 'blockchain' ledger will be somewhat a medium where many areas of the intermediaries made rules and procedures will not be required.

Now coming back to the 'motorbike' , which if purchased on a blockchain medium then it will function as follows.

First - The bike making company will share the ledger details like the engine number, chasis number with 'original equipment manufacturers' (OEM).

Second - The ledger being digital and will be automatically updated if the 'motorbike' has been purchased and the details of the purchaser will be available under the (digital nodes), which is a data storing manner within the blockchain matrix).

Third - The purchaser can sell the bike after a few years and automatically the other purchaser willing to purchase the said motorbike can view the entire vehicle history, vehicle condition, kilometres covered and other status details of the present bike as the ledger is self updating and does not require any one governing it and also reduces the requirements of the mandatory paper work that comes along with it. This inbuilt ‘provenance’ is what makes blockchain a true revolution if compared to the present day system.

Fourth – One single blockchain ledger will be able to make automatic updates regarding the transfer, verification, insurance or other compliance details which are presently performed by government RTO’s and a separate one by the insurance companies. This blockchain ledger will also be able to identify the vehicle life and condition and automatically discontinue the usage of motorbike beyond the prescribed usage tenure as ‘built-in’ by the manufacturing company.

This “Peer-to-Peer” blockchain network will ‘by design’ be able to function with the potential of automatic updates as it does not require the intermediaries as needed in the present market to record the vehicle details, ownership details, usage or other user details. Therefore making the concept of IOT (internet of things) not only come alive but also self regulating and auto updating.

“This automation of the blockchain modus is the revolution where the true potential of blockchain actually rests”.

Similarly ‘bitcoin’ on the other hand is a mere application running on the blockchain system and bitcoin mainly operates by mining and solving mathematical problems/ puzzles but is limited to a 21 miiliion coins only and no more.

A very good thing about the blockchain system is that the convenience by which it can be regulated within an industry. The blockchain has an advantage that is, the access to it will only be through a permissioned network. And It not only helps build trust with confidence but the question of trust till an extent will not matter primarily because each transaction will be over the completion of previous transaction and therefore till an extent it diminishes the possibility of duplicity, online fraud because the history of all the transactions will be visible to all the viewers / subscribers, to the said network.

The blockchain holds a prospective future since it has the aptitude of being automatically updated with every consensus of transaction which not only makes it secure, transparent and auditable BUT also is time as well as cost saving with immutability, provenance and finality. 

This secure flexible transparent, self governing characteristic is what makes the ‘blockchain transaction system’ truly extraordinary as well as revolutionary, if compared to the present traditional operandi.

ALOK SHARMA 

(A New Delhi based lawyer)

Email - aloksharma@live.in

Contact - +91 9953437853

For BLOCKCHAIN SOLICITORS