Blockchain: Application in payments

Abstract

Blockchain is a recent technology cum platform supporting digital assets to build better financial system. Currently, Blockchain is spread across the globe covering 140 countries. Figure (1) shows the relative position of Blockchain technology among all other technological innovations according to Gartner Hype Cycle for emerging technologies. Blockchain has powered approximately 100 million transactions reducing cost and time. Blockchain serves as a public ledger of all cryptocurrency transactions made. Each transaction is bundled with other transactions and recorded in the form of a new block. These blocks are validated by clients(node) present in the network. Each node gets a copy of blockchain which gets downloaded automatically once these nodes join the network. Approximately after every 10 minutes, these verified blocks are relayed chronologically in a linear fashion to form a chain. The blockchain acts as database proof of all blocks right from the minute details of the first block to the most recently added block. Analogous to bank transactions, Blockchain registers and retains the transactions entered in chronological order. Meanwhile, blocks formed in Blockchain are like individual bank statements. The blockchain database is shared in encrypted form with all the nodes for verification. For a block to be formed and added to the chain it needs to get consensus of more than 50% of the nodes. Information like how much and what all value is associated with any address can be fetched at any point in the past.