Working With the blockchain

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Working With the blockchain

  • Blockchain: An elegant concept but its possibilities and potential require careful research.
  • Treating it as a solution for all is promoting Techno-determinism.

Blockchain and Current Take

  • It is a fascinating data structure.
  • It draws a great curiosity in computer science, social and political sciences, and public policy.
  • A lot of hype about its concept and its adoption.
  • But its promises are faith-based, driven by unsubstantiated vendor and consultant claims.
  • This is risky and stems from an inadequate understanding of the blockchain properties.
  • A blockchain is a sequential append.
  • It is a public bulletin board of transaction records.
  • It has two main functional properties:
  1. What can get added is reconciled by multiple participating peers.
  2. The bulletin board is immutable, once a record is added, it is cryptographically ensured.
  • Permissioned” or private blockchain: Only with pre-identified participating peers.
  • Collusion is possible and integrity can only be ensured through regulations.
  • Without political decentralization, safety is scarce and difficult.
  • Blockchain structure does nothing for the notion of privacy & secrecy aspects.

Consensus and Applicability

  • A decentralized consensus is required.
  • Current issues with safety concern and privacy is not an ensuing property of a blockchain.
  • Consensus is inapplicable when there is only one authority.
  • The claims of security based on blockchain are unpromising.

RBI and Cryptocurrency

  • The role of blockchain in RBI’s digital currency proposal is doubtful.
  • A convincing method independent of consensus needs to be developed.

Cryptocurrencies and Blockchain Tech use

  • Cryptocurrencies make valid use cases for blockchains.
  • But political decentralization of involved participants is questionable.
  • The question is whether cryptocurrencies are consistent with traditional means of transactions and larger macroeconomic implications of cryptocurrencies.
  • Only a limited set of commodities are traded with crypto assets.
  • But their price determinations with fiat currencies are uncertain.
  • Also their potential to increase inequality is also considerable.

Physical aspects of Cryptocurrency

  • Mining in cryptocurrencies is achieved by spinning the CPUs.
  • Carbon footprint is equivalent to few megacities, it is ungainly, energy-inefficient and unsustainable.
  • This requires regulation and taxation, especially for the potential environmental impacts.


  • It is amazing that cryptocurrency research and deployment has not been adequately addressed.
  • This raises concerns to develop sound theories for their regulation.