Mumbai: Australian computer scientist, inventor and academic Dr. Craig Steven Wright may have confirmed his identity as Satoshi Nakomoto, the inventor of the Bitcoin alternative currency and blockchain technology. But the fact is that evaluating his claim may “...involve a multi-step paternity test", as The Economist said in its report on 2 May.

Nevertheless, the answer may not matter. Here’s why.

It was only last December that many media outlets identified Craig Wright as the human face behind the pseudonym of Nakomoto, who in 2009 gifted the bitcoin and blockchain technology to the world. Wright, then, had neither confirmed nor denied these media reports.

But the fact remains that since Satoshi first released bitcoin’s code on 9 January 2009, the digital currency has been adopted for everything from international money transfers to online narco-trafficking. There are about 15 million bitcoins in circulation as on 2 May, the total value of which is a little over $7 billion.

Bitcoin users can buy and sell the currency among themselves without any kind of intermediation, making it a decentralized system. A public ledger called the “block chain" contains every transaction ever processed (there is nothing like a physical bitcoin), allowing a user’s computer to verify the validity of each transaction, according to Bitcoin.com, a website promoted by the Bitcoin Foundation.

The authenticity of each transaction is protected by a digital signature corresponding to the sender’s address, allowing users to have full control over sending bitcoins from their own bitcoin addresses. So, the digital money is also known as a “cryptocurrency". Anyone can process transactions using the computing power of specialized hardware and earn a reward in bitcoins for this service—a process known as mining.

In India, entrepreneurs have shown enthusiasm towards the bitcoin system and all eyes are on the Reserve Bank of India (RBI), which has not yet come out with an ultimate verdict, according to law firm, Nishith Desai Associates. RBI did issue a press release in 2014, cautioning users, holders and traders of virtual currencies, including bitcoin, about the potential financial, operational, legal and security-related risks that they are exposing themselves to.

According to a 15 March white paper titled Bitcoins-A Global Perspective by Nishith Desai, bitcoins “per se are not illegal in India and this is in consonance with an international approach. Bitcoin creation and transfer are based on open source cryptographic protocol managed in a decentralized manner, and, if harnessed properly, bitcoin could deliver many benefits to the Indian economy".

The fact is that many Indians currently use Indian rupees to buy bitcoins through local start-ups in smaller denominations since bitcoin amounts are highly divisible. While there are no official names for these smaller units, the most common ones are satoshi, one hundred-millionth (0.00000001) of a bitcoin and the bit, which is one millionth (0.000001) of a bitcoin (also known as a microbitcoin or µBTC).

According to a January report by Zebpay—India’s first bitcoin company and app-enabled bitcoin wallet provider, the year 2015 saw a fundamental shift in the types of investors interested in bitcoin who believe it would be the biggest disruption in the financial ecosystem of the world. The report pointed out that with the advancement in bitcoin concept and most importantly its underlying technology blockchain, many technology investors, high net worth individuals (HNIs) and some institutions have showed growing interest in the digital currency. “Bitcoin venture capital funding rose by 494% in 2015 from the end of 2013 with total investment equating to $ 927 million since 2012," the report noted.

Nishith Desai Associates points out that a growing number of businesses and individuals are using cryptocurrencies such as bitcoin, including “...restaurants, apartments, law firms, and popular online services such as Namecheap, WordPress, Reddit and Flattr... This trend holds particularly true for vendors who accept micropayments, such as payments for digital music downloads". Such vendors, the firm reasons, value the use of bitcoin to avoid the transaction costs associated with traditional electronic payment methods.

The white paper, though, also acknowledges that bitcoins have “been used for nefarious activities as well. This includes donations to illegitimate organizations...(and) online gambling". Also, according to Nishith Desai Associates, the sale of bitcoins to a non-resident Indian by a resident Indian will be in violation of the provisions of the Foreign Exchange Management Act, 1999, and “can also be regulated by RBI in this condition".

But more than bitcoin, it’s the underlying technology that powers bitcoin and helps to authenticate transactions that is surely finding favour with firms.

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.

Many companies are trying to build applications on top of blockchain to offer solutions across industries. For instance, making an intelligent application over blockchain to store and handle patient data can find use in the healthcare space and would do away with the need for a central authority to manage all the details of a patient.

Banks are another case in point. Blockchain works on a model of code-breaking and crowdsourcing, and the technology decentralizes the way a traditional bank works—blockchain itself verifies a person’s identity or credit risk.

For instance, Royal Bank of Scotland Plc (RBS) is aiming to pilot a service based on blockchain technology in 2016. International Business Machines Corp. (IBM) has outlined a decentralized and distributed IoT platform incorporating the blockchain database technology.

On 1 May, The Wall Street Journal reported that “Delaware, the state that incorporates the most public companies, is exploring the use of blockchain technology to move more of its paperwork to cheaper systems." And on 2 May, coindesk.com reported that the Commonwealth Secretariat, the executive arm of the 53-member Commonwealth of Nations, has launched a blockchain-powered secure communication tool geared for governments and law enforcement. Developed in partnership with UK-based startup Digital Identity Security Company (DISC), the project is designed to offer a secure means of communication for government and law enforcement agencies within the Commonwealth.

Closer home, information technology services firms Tata Consultancy Services Ltd (TCS), Infosys Ltd and Cognizant Technology Solutions Corp. have boosted investment in blockchain technology and are exploring ways to build applications around it. Visa Inc., according to an 18 August report in Mint, is planning to use blockchain to improve its digital payments processes.

So, it will hardly matter whether Dr. Wright is the founder of bitcoin or not. What will matter is that bitcoin and blockchain are already changing the way the world transacts.

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