Blockchain and bitcoin are the buzzwords of the contemporary era. However, it is imperative to differentiate between the two. In simple words, Blockchain is the technology, whereas Bitcoin is one such implementation of it (among others). It is a form of digital currency based on Blockchain technology. Digital economy and the impact of Blockchain on it cannot be negated; it needs to be studied carefully.
Blockchain is a decentralized platform which facilitates peer-to-peer transaction, negating the need of a third party. It thus enables trust, accountability and makes the system much more transparent. The absence of a central authority makes everyone the owner and simultaneously keeping a tap on other transactions which are taking place.
Let us understand digital economy and the impact of Blockchain through the example of India. The present society is governed by a central regulatory authority, where the decisions are taken and implemented. In the financial sector, the RBI (Reserve Bank of India) plays the role of a central authority and operates through various banks that rely on it. Every transaction goes to the bank and then to the direct consumer. Now imagine a situation where a simple transaction can take place directly without the need of a bank or any authority acting as the middleman in the entire process. Blockchain technology has the potential to offer an infrastructure which makes the transaction cost effective (cross border payment), time effective (transfer of funds) and transparent (non-involvement of third party). The vision of a digital economy can be fulfilled by implementing Blockchain based platforms in the financial sector to ensure transparency and a corrupt free system. Through this, the total circulation of money in an economy can be easily traced. It is because every node present in the network validates every transaction and the same is updated in the ledger; the ledger cannot be tampered.
Technical advancements pave the pathway to a bright future. Human activities are now being replaced with Artificial Intelligence (AI), making our lives easier. Since change is the only constant it has the potential to bring about a revolution. And moving from a conventional way of working to a more secure and trustworthy platform is the need of the hour. Blockchain is one such change that will challenge the status quo in every sector, and it will prove as a boon for digital economy.