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Digitalization
now-a-days is inclining towards cryptocurrency which will continue to attract
more and more users in coming future. One of the most successful cryptocurrency
used now-a-days is Bitcoin. It has gained a huge triumph till date and will be progressively
used in B2B foreign-exchange payments by multinational companies in 2018 4.

Bitcoin
is a digital cash or currency which can be operated independently of the
central bank 1. Bitcoins were released on 9th January,2009 by
Satoshi Nakamoto 2. Blockchain technology is actually titled to the design supporting
the transactions of Bitcoin. The creator of Bitcoin never intended to introduce
a new technology called “Blockchain”. Theories and operational working of Bitcoins
are mentioned in this concise and comprehensible whitepaper. He never used the
term blockchain in his paper as his only focus lied on creating a software
design using different technologies to build a “A Peer-to-Peer Electronic Cash System”
3.

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Digital
commerce on internet solely depends on third party financial institutions to
complete their digital payments. This mechanism works well for most
transactions but it is suffering from the intrinsic weakness of trust based
model 3. These third party financial organizations which are mediators may
increase transactional cost. Moreover, they hassle the parties to provide more
information than they actually need. The point is we are living our digital
life precariously by relying on the third party mediators for securing our
digital assets. In fact, these third party mediator or sources can also be
hacked, conceded or influenced. These uncertainties can be avoided by using
physical currency in person but there is not such technology evolved that can
make digital payments without the interference of third party mediators. Here
the need arises to provide cryptographic proof rather than trusting the
mediator. The need arises for the system in which both the willing parties can
make the transitions directly without depending on the third parties.

A
BlockChain is digitized, decentralized, distributed database which stores
records, or public ledger of some or all transactions or any digital events
that has been occurred. These transactions are recorded as blocks and are added
to the chain in chronological order. Storing these information allows market members
to keep the track of the digital currency transactions without any central
record keeping system 5. Members who are part of this domain receives a transactional
ledger. Any latest transaction information is shared among all the
participating parties to verify the authenticity of the transaction. As there
is no financial organization as middleware to perform the authentication work, the
ledger is verified by consensus of a majority of the participants in the
system. Verified transactions are grouped to a block and the entire block is
added to the chain. Once a block is entered, the information cannot be erased. Updated
blockchain is again accessible to all the participants of the system. The
purpose of broadcasting the transactional ledger is to secure the payments.
Basic analogy can be quoted as ‘It is easy to rob a chocolate which is kept in
an isolated room, rather than stealing a chocolate which is kept in a market
place where there are thousands of eyes on it’.

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