The financial world’s excitement over adopting the cryptocurrency Bitcoin has undoubtedly see-sawed ever since the code was first released on 9 January 2009 by a person who assumed the name, Satoshi Nakamoto
However, there is no such uncertainty among companies globally when it comes to exploring the adoption of blockchain—the underlying technology that powers Bitcoin.
Banks and financial institutions have clearly been the first movers. Royal Bank of Scotland Plc. (RBS), for instance, is aiming to pilot a service based on blockchain technology. Visa Inc. is planning to use blockchain to improve its digital payments processes. ICICI Bank Ltd, India’s largest private bank, too is gearing up to use blockchain technology to make banking more robust and secure.
Blockchain is a distributed ledger shared via a peer-to-peer network that maintains an expanding list of data records. Each participant has a copy of the ledger’s data, giving everyone a ledger that reflects the most recent transactions or changes. Thus, blockchain reduces the need for establishing trust using traditional methods. Blockchain acts as an open ledger and reduces the duplication of access to data or checking of data. The other benefits are scalability and lower cost.
Blockchain holds the potential for all participants in a business network to share a system of record. This replicated, shared ledger provides consensus, provenance, immutability and finality around the transfer of assets within business networks—reducing costs, complexity and time, underpinning shared, trusted processes, enabling trusted record-keeping and improving discoverability, according to a January Finextra white paper by International Business Machines Corp. (IBM).
The benefits of blockchain are not restricted to banking and financial institutions. Blockchain has been recognized as a “game-changing digital technology for enterprise transformation”, according to a January report by IT services provider Persistent Sytems Ltd. with good reason.
Many companies are trying to build applications on top of blockchain to offer solutions across industries. Consider the case of Mahindra and Mahindra Ltd (M&M), which has identified pilots in financial services, supply chain, solar charging and electric vehicle charging, among others, where it can use blockchain technology. For instance, in automobiles, if there’s a potential part failure, you can use blockchain to know exactly who supplied that part, etc.—traceability becomes much easier.
- What does the term ‘Blockchain’ signify?
- It is a cryptocurrency which deals in online trade
- It is a distributed ledger that maintains an expanding list of data records
- It is a software which lets consumers compare prices of various products online
- It is a tool used by private organization to keep an eye on their customers
- None of the above
- What is the meaning of word ‘provenance’?
3. How is India reacting to ‘Blockchain’?
- Private banks are not willing to try it
- Private banks are willing to use it to make banking secure
- Indian govt. is not allowing it to enter India
- India is not paying any attention to it
- None of the above
- What is the “game-changing digital technology for enterprise transformation” which has been mentioned in the passage?
- Blockchain will secure privacy of all
- Blockchain will make interest rates cheap
- Blockchain will replace online wallets
- Blockchain will offer solutions across industries
- All are correct
Analysis and answers
Correct Answer:B: It is a distributed ledger that maintains an expanding list of data records
Direct question, all you have to do is to look for the definition which would match one of the given options. Usually, the keyword of the passage is explained within the first paragraph, but even if it is not, you must read the entire passage. Option A has cryptocurrency mentioned in it, but that more of refers to Bitcoin. Option C and D are nowhere mentioned in the passage.
Correct Answer:A: Origin
Again, it is another direct vocabulary question. You don’t have to read the passage to answer it. But you can always derive its meaning by reading it in the context from the passage. Sometimes, the second approach might not work either, in that case, try putting the options in place of the original word, whichever suits the best is your answer.
Correct Answer:B: Private banks are willing to use it to make banking secure
In this question, you must find out where is it mentioned that India is reacting to ‘Blockchain.’ You will have to read the passage for that, doing so will help you realize that it has been directly mentioned in the passage that, ICICI Bank Ltd, India’s largest private bank, too is gearing up to use blockchain technology to make banking more robust and secure.
Correct Answer:D: Blockchain will offer solutions across industries
This is a simple question where you can easily eliminate the choices by giving the passage a quick glance. Options A,B and C are nowhere mentioned in the passage at all. On the other hand, Option D has been referred to subtly in the last paragraph, and thus it becomes your best available answer.