Why this matters now
Blockchain is tested for how it works, public vs private types, applications beyond crypto, and India’s stance (caution on crypto, support for use-cases and CBDC) — a frequent S&T/economy crossover.
How blockchain works
Data is stored in blocks linked in a chain; each block is cryptographically secured and validated by a distributed network through a consensus mechanism (e.g. proof-of-work, proof-of-stake). Once recorded, data is immutable and transparent — there is no single point of control or failure.
Types and applications
Blockchains can be public/permissionless (open, e.g. Bitcoin, Ethereum) or private/permissioned (restricted, for enterprises/government). Beyond cryptocurrency, applications include smart contracts, supply-chain tracking, land records, digital identity, health records, e-governance and trade finance.
India’s approach and risks
India has been cautious on private cryptocurrencies (taxing them, exploring regulation) while embracing blockchain for governance (the National Blockchain Strategy, land records, certificates) and launching the CBDC (digital rupee). Risks include energy use, scalability, volatility, money-laundering and the regulatory gap.
UPSC angle
Know blockchain basics (blocks, cryptography, consensus, immutability), public vs private chains, applications beyond crypto (smart contracts, land records), India’s crypto caution + CBDC, and the risks.
Frequently asked questions
What is blockchain?
A distributed, tamper-evident digital ledger that records transactions across a network without a central authority.
What is the difference between public and private blockchains?
Public blockchains are open and permissionless (e.g. Bitcoin); private blockchains are restricted and permissioned for specific organisations.
What are blockchain applications beyond cryptocurrency?
Smart contracts, supply-chain tracking, land records, digital identity, health records and e-governance.
What is India’s stance on blockchain?
Caution on private cryptocurrencies, support for blockchain in governance, and the launch of the CBDC (digital rupee).