The Government Wants to Break the Promise of a Blockchain

The government is insecure. They want to be loved & want to be in power. (Basically control us)

This post is all about how governments can break the blockchain just because they want the power & be diplomatic

First things First

What is Blockchain?

A blockchain is a digital distributed, decentralised, public ledger that exists across a network

Simply a blockchain is the most secure and decentralised way to store information (just not the ledger)

Let me explain that with an example

We have John and Rahul

Rahul bought John’s car and pays him INR 1,00,000. Now when the transaction is made, it is written and saved with the banks or let us say the governing body of a government.

Now John has friends in the banks. He goes to them and says, just delete one zero and say that Rahul only gave me INR 10,000. Now this is a scam/fraud committed here. John has the right friends and so he can do so. Simply, banks have too much power. And it is centralised.

(This is a hypothetical example, things like this do not happen now. But I just want to explain that some controlling parties with power due to friends in power can manipulate. Also if you want, think how Land Mafia works)

Think how the banks (or governments) decide on how much you can withdraw in a day or with cheque.
Your money and they decide
They say, it’s a security measure, which is true but underlying helps run their business.

Enter Blockchain

To avoid a fraud from either parties, Rahul and John decides to write the transaction on a paper and share it with a 1000 people on the blockchain. Let us call these 1000 people as nodes. Now these 1000 people can be anyone random. Once they receive the paper of the transaction, they verify the paper with other nodes, make a copy of it and save it with themselves. When they save it together, that becomes a block.

Now it is nearly impossible (until quantum computers) to conspire with all the 1000 nodes and do some sort of a fraud. Thereby securing the initial transaction.

That’s a blockchain tech for you.

Further more, when a new transactions comes up, it is again stored as a block. And this one block + one block makes a chain and so it is BlockChain

All of this is done by computers. So all of it is algorithms that have set of rules which they follow and do not get corrupted as humans usually do.

And it is cryptographically secured.

P.S. This is not chain marketing. The chain in the blockchain is not chain marketing FFS

Why I am grateful that we have a blockchain?

I simply love blockchain because it shifts the power from centralised organisations to the people. This was the original promise of a democracy, of a free world.

On top of that, algorithms do the job of keeping it decentralised. That means, nearly zero corruption at ever iteration and reliability.

And it keeps my information secure.

Why do we have a Cryptocurrency?

Now cryptocurrencies have been defined in various ways. I will also take one application and define it from that angle

Now in the above example, why would the 1000 people save Rahul & John’s data?

They need to be incentivised, right?

Enter Cryptocurrency, so for every block stored, some new tokens/coins will be generated and distributed across the nodes. (across or just to few nodes, depends on the blockchain)

But it is really important that these tokens/coins have some use case. The best use case is that they become a currency which can be used to buy anything that a human needs/wants.

Understand this though, if a cryptocurrency does not have a use case, the incentive is gone and the nodes will be gone which in turn will remove decentralisation and security of a Blockchain

P.S. To get a different angle on the cryptocurrencies, learn about DAOs where a token/coin is more of a share of a project – a ownership of a project.

How can a government break the blockchain?

Government wants to drop ‘currency’ from Cryptocurrency. Simply they want us to treat it like an asset (like shares), but not use it to buy things.

They know that eventually some currencies can devalue their currency and they are insecure about it.

Don’t be surprised if someone says, Crypto and Blockchain is Anti-National. It is actually Anti-Centralised Government but they would love it to be marketed as Anti-National.

Well what does this has to do with breaking the blockchain though?

As I have explained in the above example, when you remove a use case of a crypto currency, you are eventually removing the incentive for a node. And when the nodes do not want to participate, we will not have the true decentralised nature of a blockchain.

Blockchain has some limitations

Yes, Blockchain has some limitations. I am mentioning them here so that you understand the other side of it too.

  • Just like Governments, Blockchains acts as a Democracy. So all the flaws in democracy will be flaws of a blockchain too.
  • Energy: Some Blockchains take a lot of energy to run the blockchain but the solutions are arriving. Check Proof of Stake to understand the next phase of Blockchain where they will solve this problem.
  • Shit Coins: There are a lot of get rich schemes in Crypto for now, but it is not different than an internet boom for example. Whenever we humans undergo a shift in our way of life, we will always have bad anchors. Think Nuclear weapons.

Conclusion (IMO)

The Crypto bans will come and go but the Blockchain tech will be here. Even Governments and big corporations will use it.

But it is exciting how it will unfold.
We have just scratched the tip of the technology, business models, the tech and use cases will emerge out in a few years. We will have a solid