Are we ready for blockchain or is the 20 crore theft enough to pop the virtual bubble?

Blockchain is the new buzz on the internet which uses algorithm that laymen like us don’t understand combined with computing skills we don’t possess. It has the capacity to revolutionize the world or to destroy it. Blockchain provides platform to cryptocurrency or digital currency that has garnered attention from varied investors around the world. Bitcoin being a digital currency like other digital currencies has seen some drastic variations in prices. It started from $1000 last year and reaching to a whopping $20,000 by the end of the 2017, shows how people were really trying to get their hands on this new-found investment.

Blockchain is a system using distributed ledger which means that every person has a record of a transaction that was ever made with no central body like in our case we have a bank to monitor or hold accountability for the functioning of the system. Today our banks keep all the transactions that happen within the system, a private affair. Imagine, if all those records could be accessible to everyone who has made transactions using the bank, the chances of having a corrupt system really zeroes down! It makes everything faster by allowing you to trade directly with anyone and anywhere in the world. Since all the transactions on Blockchain are encrypted, it means that even though all the records are public at the same time no one will know which account belongs to whom. This maintains the much-needed privacy but at the same time is a loophole for some big heists to take place since your identity retains its anonymity. As all of it is digital, some kind a validation is required otherwise authenticity of the content is lost. A complex mathematical puzzle is solved by a group of people called ‘miners’ to validate the transaction which earns them extra bitcoins. Once it’s verified the transaction is complete. Since you must publicly broadcast about the transaction to get it verified and get it recorded the possibility to cheat the system is nil. Picture a corruption free world, how would that be? I would say it’s hard to imagine and like every coin has two sides Bitcoin does too. The lack of accountability and anonymity makes it prone to crimes and thus gave way to the largest cryptocurrency theft in India.

This decentralized way of exchanging digital currency experienced a 20-crore theft recently, when ‘Coinsecure’ an Indian cryptocurrency exchange displayed a message on its website saying, “We regret to inform you that our bitcoin funds have been exposed and seem to have been siphoned out to an address that is outside our control”. A company that claims to has over two lakh users trading on its platform daily, said that around 438 bitcoins(valuing up to $3 million), which were stored in a password-protected virtual wallet were tapped to an unknown destination on the internet after the details were leaked online.

After the Coinsecure theft, the government barred all banks from allowing any transactions to be done to buy or sell cryptocurrency. People panicked and thought cryptocurrency was being banned and sold it for a value lesser than the market value. The government didn’t ban it but when most of the people who have invested their money in it don’t understand how it works, well then, the government needs to step in to prevent a mayhem. It’s not only India that has faced theft of digital currency, but Japan’s Coincheck faced a 500-million-dollar hack in January 2018 or Italy’s Bitgrail faced 195-million-dollar hack in February 2018.This Open ledger(record) system lets you identify the accounts through which the possible theft happened but the blockchain encryption feature prevents from revealing the identity of the account holder. Thus, making it difficult to figure out who committed the crime.

Here, the debate still continues whether our country is ready for virtual currency whereas Dubai on the other hand is planning a blockchain-powered government! Blockchain is not just an algorithm for the digital currency but can be used for anything, for message encryption, for government services or public welfare. Its decentralization makes it work faster and its level of privacy can be controlled. Dubai by the year 2020 aims at having visa applications, bill payments and license renewals, to be transacted digitally in order to save 25.1 million man hours or 1.5billion dollars in savings per year for the emirate. In India, we still can’t rely on transactions being theft or corruption free, be it Coin secure or Punjab national bank!

References:
1) https://www.forbes.com/sites/sindhujabalaji/2018/02/06/india-is-not-banning-cryptocurrency-heres-what-it-is-doing-instead/#54ee1e9a7c6f
2) https://www.coindesk.com/900-20000-bitcoins-historic-2017-price-run-revisited/
3) https://www.businesstoday.in/technology/internet/is-your-bitcoin-safe-5-biggest-cryptocurrency-thefts-in-past-year/story/274824.html
4) http://www.smartdubai.ae/dubai_blockchain.php

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