Finnovation : Blockchain

A currency is decentralized, meaning unlike credit and debit, it’s controlled solely by users and computer algorithms as opposed to a central bank or government, which is why transfers between two parties can be done with a minimal processing fees. There are various types of cryptocurrency which are supported by a decentralised peer-to-peer network called blockchain. The blockchain technology ensures that all cyprocurrencies are monitored regardless of whether they are stored in a digital wallet or being used in trading.

BY DEVANSHI | 3 mins read

How does blockchain technology work

At its most basic level, blockchain is literally just a chain of blocks, but not in the traditional sense of those words. When we say the words “block” and “chain” in this context, we are actually talking about digital information (the “block”) stored in a public database (the “chain”).

A single block on the Bitcoin blockchain can actually store up to 1 MB of data. Depending on the size of the transactions, that means a single block can house a few thousand transactions under one roof.

When that new block is added to the blockchain, it becomes publicly available for anyone to view—even you. If you take a look at Bitcoin’s blockchain, you will see that you have access to transaction data, along with information about when (“Time”), where (“Height”), and by who (“Relayed By”) the block was added to the blockchain.

Recent News

India’s Supreme Court on Wednesday overturned central bank’s two-year-old ban on cryptocurrency trading in the country in what many said was a “historic” verdict.

The Reserve Bank of India had imposed a ban on cryptocurrency trading in April 2018 that barred banks and other financial institutions from facilitating “any service in relation to virtual currencies.”

At the time, RBI said the move was necessary to curb “ring-fencing” of the country’s financial system. It had also argued that Bitcoin and other cryptocurrencies cannot be treated as currencies as they are not made of metal or exist in physical form, nor were they stamped by the government.

In the ruling, the bench, headed by Justice Rohinton F. Nariman, overruled central bank’s circular on the grounds of disproportionality.

A group of petitioners including trade body the Internet and Mobile Association of India had challenged central bank’s circular, in part, arguing that India should look at most other nations that are not only allowing cryptocurrency trading, but have moved to launch their own virtual currencies.