Government of India

December 2021

Blockchain is an innovative distributed ledger technology and amalgamation

of various innovations with a clear business value. Blockchain enables a shared

ledger among the various parties involved in business transactions, which acts

as the single source of truth. Blockchain eliminates the need for a central entity

to validate the transactions.

Blockchain can be used in both permissioned and permissionless models.

These models have applications in various domains such as education,

governance, finance and banking, health care, logistics, cyber security, media,

legal, power sector, and so on.

Globally and nationally, various efforts are being made toward implementing

blockchain-based applications. Proof of Concepts (PoCs) and pilot

deployments have been successfully carried out. In order to reap the benefits of

this technology, there is a need for a national-level strategy on blockchain

technology.

Technology overview

Blockchain, a distributed ledger technology, enables a layer of trust and

eliminates the need for a third party to validate the transactions. Blockchain

technology is an amalgamation of various technologies such as distributed

systems, cryptography, and so on. Data and transactions stored in blocks of

blockchain are secured against tampering using cryptographic hash algorithms.

Blocks are linked with each other with proper security using a hash function.

This leads to a Blockchain, which is a distributed ledger stored at various

nodes in the network. Each block contains details of transactions, the hash of

the previous block, timestamp, and so on, as shown in figure 7.8. It is difficult

for an adversary to modify the stored details at maj ority points. Therefore,

blockchain provides better security when compared with a centralized system.