Is Blockchain On Its Way To Make Everything Transparent?

Blockchain is a distributed database that is shared between the nodes of a computer network. The data is stored in a digital format electronically on the blockchain. Blockchain has always been linked to cryptocurrencies. Despite the links, blockchain has expanded its applications.

Started in 2008 to facilitate Bitcoin transactions, blockchain has witnessed tremendous growth since then. Blockchain was created to trade value. It has seeped into different sectors and has provided different use cases. The technology is said to be one of the building blocks of the Web3 technology that is highly anticipated by today’s Web2 users.

Blockchain has become huge due to various reasons, one of which is transparency. The technology has been actively used in storing personal information, tracking the provenance of a particular item or object, etc.

“Open finance is a big sector where blockchain has started to make waves. There are many products out there that provide much more transparency. They provide similar functions with lending or borrowing or whether it’s remittance or exchange of value. The traditional financial system can be made much more transparent, made more secure because of more use cases out there. There are a few barriers as the technology is at a nascent stage, but open finance a few years down the road would become a bedrock for more use cases,” said Karan Ambawani, India Lead, dYdX Foundation.

Blockchain is actively used in the automotive sector and the banking sector.

“We are working with MG Motors and we have created a car passport using a physical resource like the car itself. The car passport is a store for the car’s telematics data and an individual can decide to share the car passport with the insurance companies who will then adapt the insurance policy according to the driving behavior of people. The car pass is a blockchain native as the data needs to be reliable for insurance companies as there is a financial risk involved,” said Praphul Chandra, Founder, KoineArth.

Web3.0 fanatics want the anonymity that blockchain ensures as most operational blockchains do not store personally identifiable information. The governments on the other hand have a different view on the same due to the concerns regarding the flow of money across international borders and the flow of digital assets across international borders in the near future. The government intends to regulate, monitor and control transactions on the blockchain as it wants in the long term. Internet technology scales faster than most technologies, which has caused technology to outpace regulations.

“We are conflating privacy with anonymity. We can be identifiable and thus non-anonymous while not violating our privacy. The idea of ​​zero knowledge proof, hashing of documents can actually be used immediately to create identities that are completely private. None of our data is actually on-chain, but if a government or a regulator requires the traceability of that asset’s owner, it is available either with a particular KYC provider or in the more utopian version, a community as a decentralized identity,” said Swapnil Pawar, Founder, Newrl.

Although the blockchain is transparent, it has kept identities anonymous. The world is moving at a very fast pace with the Financial Attacking Task Force fighting money laundering and financing terrorism at various levels. However, persistent anonymity mixed with privacy should be done away with to avoid leaks in the financial world resulting in a catastrophic event that would inadvertently change the future.

Blockchain, despite being a newer technology, has shown enormous potential in various sectors. Despite the issues that come up with crypto tokens, blockchain technology has continuously found various suitors in various sectors without a crypto layer. The blockchain is a transparent tool that can change the way financial institutions operate and make them more secure than they are today.