BharatNotes What is Blockchain Technology?
Blockchain is a type of Distributed Ledger Technology (DLT). Per the US National Institute of Standards and Technology (NIST, NISTIR 8202, 2018), blockchains are "tamper-evident and tamper-resistant digital ledgers implemented in a distributed fashion (without a central repository) and usually without a central authority." Transactions are bundled into blocks, each cryptographically hashed and linked to the previous block, forming an append-only chain. Identical copies of the ledger are held by network nodes, and new blocks are added only when participants agree through a consensus mechanism (e.g., Proof-of-Work, Proof-of-Stake). Altering a record would require re-computing every subsequent block on a majority of nodes — making the ledger practically immutable.
Key Features
- Decentralisation — no single controlling authority; the ledger is replicated across nodes.
- Immutability — once validated, records cannot be silently changed, giving a tamper-evident audit trail.
- Transparency with cryptographic security — entries are visible to permitted participants and secured by hashing and digital signatures.
- Consensus-driven trust — agreement among nodes replaces a trusted intermediary.
- Smart contracts — self-executing code that runs when pre-set conditions are met.
| Type | Access | Typical use |
|---|---|---|
| Public (permissionless) | Open to anyone | Bitcoin, Ethereum |
| Permissioned (private) | Restricted, vetted members | e-governance, enterprise |
| Consortium | Shared among select organisations | Inter-bank, supply chains |
Significance and Applications
Blockchain reduces dependence on intermediaries, lowers fraud, and creates verifiable records — valuable for land titling, supply-chain traceability, digital identity, health records, and financial settlement. Its limitations include high energy use in Proof-of-Work systems, scalability constraints, and the "blockchain trilemma" (the difficulty of maximising decentralisation, security and scalability simultaneously).
Current Status in India (as of 2026)
- National Strategy on Blockchain released by MeitY on 3 December 2021, with a five-year roadmap and the proposed National Blockchain Framework (NBF).
- Vishvasya — Blockchain Technology Stack launched by the MeitY Secretary on 4 September 2024, offering Blockchain-as-a-Service on geographically distributed NIC data centres at Bhubaneswar, Pune and Hyderabad. Allied tools include NBFLite (a sandbox for startups/academia), Praamaanik (verifying mobile-app origin) and the National Blockchain Portal.
- Digital Rupee (e-rupee / CBDC): the RBI's retail pilot (e₹-R) launched on 1 December 2022 in a closed user group, beginning in Mumbai, New Delhi, Bengaluru and Bhubaneswar (PIB). The RBI states the retail CBDC "has components based on blockchain technology." By March 2025, reporting indicated participation had expanded to 17 banks with over 60 lakh users.
UPSC Angle
For Prelims, fix the basics: blockchain is a distributed ledger, it is not synonymous with cryptocurrency, and CBDC (a sovereign liability) is distinct from private crypto-assets. For Mains GS3, frame blockchain around governance and economy — its promise for transparent service delivery via the National Blockchain Framework, weighed against energy, scalability and regulatory challenges.
