Unchaining the BLOCKCHAIN
Be a part of blockchain that will underpin the financial sector in the coming time. Educator Vikram Pandya on the emerging blockchain sector that holds huge promise
We, as a society, have always trusted on someone to function smoothly. Be it intermediaries in case of trade and commerce or the governments for overall governance. This centralisation of trust sometimes can backfire and shake the pillars of trust-based ecosystem which we live in. But can we imagine a system where you can create trust by not trusting anyone? And bring in higher transparency and efficiency, as number of participants grow?
Welcome to the world of Blockchain – a decentralised, trustless record keeping mechanism. Under blockchain implementation, as the record is distributed, there is no one who can change or control the data. Based on the desired objectives, a suitable blockchain framework can be selected and smart contracts can be implemented which can allow end-to-end transactions tracing, transaction validation and authorisation. It provides a robust framework to support entire value chain seamlessly. In the words of Larry Summers (US Former Treasury Secretary), the blockchain will change a great deal of financial practice and exchange.
Blockchain experts are high in demand and identifying right blockchain platform for a given use-case is really important. Since blockchain is decentralised, there is no central agency that has control over the whole data. It also means that it is more resilient against Distributed Denial of Service (DDoS) attacks. Blockchain should not be considered as a replacement of traditional databases. It is not great at handling large volume of real-time transactions because of inherent features like Signature verification, Consensus mechanism and redundancy. It provides an immutable record of all events without the need of any middleman or trusted third party. A blockchain can be permissioned (normally at enterprise level), permissionless (public, example, Bitcoin) or hybrid (ripple).
Today, there are several blockchain platforms in the market. Some of the notable platforms include Ethereum, BigChainDB, ChainCore, Corda, Credits, Hydra, Hyperledger, Multichain, Openchain, Quorum and Stellar. These platforms are used to create Decentralised Applications (DAPPs). Selection of blockchain platform depends on intended end use and choice of the programming framework. In India, Blockchain projects have been launched by banks for exploring, building and implementing solutions. Currently, there are 30 banks working on solutions across various domains like Shared KYC, Loan Syndication, Trade Finance, Asset Registry, Secure Documents and Cross border payments. Yes Bank has implemented a multi-nodal blockchain transaction to fully digitise vendor financing for Bajaj Electricals. ICICI Bank executed transactions in international trade finance and remittances using blockchain technology in partnership with a Dubai-based bank Emirates NBD. Kotak Mahindra Bank has enabled end-to-end trade financing by utilising blockchain to reduce time taken for a letter of credit (LC) to few hours from 20 to 30 days.
CAREER IN BLOCKCHAIN
To build a career in blockchain space, he/she can choose to become blockchain analyst or a developer, one can provide legal consultancy, or can become an advisor for Initial Coin Offering (ICO). Blockchain analyst need to have business/functional knowledge and understanding about the various blockchain frameworks while developer will need to know end to end implementation on the selected framework.
Blockchain education is also high in demand and universities, across the globe, have started adding blockchain curriculum to their management courses. Beginners can go through the free courses on blockchain essentials provided by IBM. Oxford provides online course on Blockchain strategy. There are several courses on e-learning platforms like Coursera and Udemy to provide basic to advanced level of programming training.
(The author is Director – Fintech, SP Jain School of Global Management)