sandip-chakraborty-2Insights into Blockchain by Dr. Sandip Chakraborty (Assistant Prof., IIT-KGP Dept. of CSE)

The KGP Chronicle (March 4, 2021)

The term “Blockchain” has now become a buzzword, and several myths, propagandas, misconceptions, and fairy tales have been around throughout the past ten years concerning this new yet powerful technology. Let me start by highlighting the real power of this technology and its plausible use cases.

Blockchain ≠ Bitcoin!

If we consider Bitcoin and other cryptocurrencies as the “Electric bulbs,” Blockchain is the “Electricity.” Let me try to explain it with an example.

Trade financing during international trades involves prolonged negotiations and risks with complex legal obligations. Consequently, such tradings are facilitated by the banks as the intermediaries, who provide the financing for the trade deals and guarantee the payments after verification of supply documents. While this involves a network of banks, individual banks have their policies, and they are the competitors in the market. How can we create a digitized platform where the banks can cooperate in a reliable, transparent, and secured manner for trade financing?

A global database with all transaction information can solve this, but then, who will maintain it? Individual banks can’t, as they are the competitors; a third-party cloud will involve cost and has privacy concerns. Blockchain solves this; you do not need a global physical database to store and update all the transactions; instead, each bank holds its own copy of the database and performs operations individually and independently. Blockchain helps maintain the consistency, correctness, and security of the data in that database and provides the competing enterprises the power to cooperate to deliver fast, transparent, and reliable services to their customers. You may check We.Trade (https://we-trade.com/), which is a blockchain-based network of 16 banks across 15 countries, for supporting trade-financing. (Read More)