Updated: May 15
In the last post we saw a ransom ware where we saw that the hacker charges the ransom in BITCOIN.
We have been hearing these terminologies
1) Crypto currency
3) Block chain
In this blog we will try to clear the concepts around these words and understand why we seafarers are listening to these words and can block chain play any role in Shipping.
Block chain is the basic technology or a platform using which data can be transferred securely and cannot be altered or changed. Hence it is used for various purposes, one of which is transferring and keeping money hidden from the world.
We will start with explanation of block chain concept and then try to explain the crypto currency and bitcoin.
As we are all seafarers, we will take an example of a ship and bond record.
We will assume that 3O has the bond register and records who takes what from the bond, so one day he changed an entry of book for his entry and in the moth end the stack didn’t tally,
So master decided will give it to CE as he is senior, but he also changed an entry for 3E and next month the count didn’t match.
Now the master decided they will have 3 registers one with CO, one with CE and one with 2E so that no one can alter the entries on his own.
Now the process was like this
Every week, bond will be issued on 1 specific day and all the issuance will be all started on anew page every issuance day.
In case anyone signs off in between and returns the bond or a tally needs to be taken all the 3 registers ae brought together and changes made in all 3 registers and new entry made on the next page.
All the 3 registers will be kept for record permanently
The above is the concept of block chain. Some analogies to block chain
1) Each page is called a “BLOCK”
2) Each register is called a “NODE”
3) All the seafarers are called “USERS”
4) Each change in the register is called “TRANSACTION”
If you notice:
1) The entries in each page will always be same in all 3 registers and
2) Each page of each register will be linked to the previous page thus creating a CHAIN.
Hence the name BLOCK CHAIN.
What is so unique in this arrangement?
If someone wants to tamper an entry, it is almost impossible for the below reasons
1) He has to change the entries on the most recent page in all 3 registers,
2) If he even changes all the 3 registers, as the previous page’s numbers are linked, it will soon be clear that numbers have been changed and the change will be rejected.
In a normal block chain there will be thousands of NODES(registers) where the data is all stored in blocks, it is almost impossible to alter a data.
Now the block chain fundamentals being clear (or so I hope, please comment in case of any doubts will clarify) we will go in to CRYPTO CURRENCY
As the concept of block chain was developed and the understanding that it is impossible to hack, people mainly in financial circles started to think to make use of this “unhackable” property of the block chain somehow for transferring and holding money without threat of theft or loss.
This gave birth to “CRYPTO CURRENCY” which is basically a number sitting somewhere in the nodes of the block chain on which your crypto currency program is sitting. Confusing?
Will try another way 1) Block chain is the base Like computer language used for writing programs like PHP, java etc. This also means there can be many many block chains in the world.2) Now the crypto currency software is using one of the specific BLOCKCHAIN.3) crypto currency like normal currencies can be many many, some of the famous ones we hear are BITCOIN(BTC), Ethereum (ETH), Ripple (XRP). These currencies are like INR, USD, AED etc.
How will be able use this currency? The following steps may throw some light on the same
1) First step to owning any crypto currency is to have a wallet to hold the money, this can be compared to the present wallets on Amazon or any other online shopping platforms. This wallet for cryptocurrency can be either an App or a physical piece which would look similar to our remote car keys or a pen drive, these are available to buy on Amazon!
The Crypto currency has 2 parts-1) A public Key-which is a long string of coded letters (Similar to account number in normal currency) and 2) Private key-Its like a password to your bank account-This private key is stored in the device shown above so that hackers don't get access to the Private key
2) Second step is to link the wallet to a bank account which again similar to many wallets available we are already using like Uber where these service ask us to have a wallet and connect it to our bank
3) Third step now is to join a Crypto currency exchange, which is like an online store for the crypto currencies where you can trade bitcoin for traditional currencies, say BTC for USD. Just like when you go to make a purchase online, you have options. There’s eBay, Amazon etc. There can be more than one exchange which might be trading the same crypto currency but may provide slightly different service. Some of the names of exchanges are Coinbase, Square cash, Robinhood etc.
4) Step four now is to now place an order for your crypto currency: You’re now ready to buy bitcoin for the first time. It is crucial to keep in mind that although one bitcoin costs several thousand dollars, bitcoin can be divided up to eight decimal points. The smallest unit of bitcoin is known as a satoshi. Even if the price of bitcoin skyrockets, you'll still be able to buy a satoshi for a tiny fraction of a cent.
The above were the basic technology knowledge to understand the whole concept. Now let’s try to understand what’s in it for us, seafarers. With the maritime industry going the digital way, with already many documents being accepted in the PDF format, there is an increasing challenge to maintain or verify the authenticity of the documents where the BLOCK CHAIN will assist us. The areas where the Block chain will be used are as below for starters
1) The vessel certificates will be digitalised and can be available for verification for classification societies, flag state administrations.
2) All the cargo documents mainly Bill of lading, as it is a document of title, its verification for genuinity becomes very important
3) Seafarers Certifications-Philippines has already started in 2019, by signing an MOU with a Singaporean company for verification of their certification, which will be available to manning companies, flag state and port state and other stake holders as necessary.
In summary the Block chain technology is here to stay. We as seafarers would also with change in technology would need to adopt and adapt to the fast changing geography of the maritime industry.
Will see you in the next blog, till then dwell on where you feel block chain can be used.
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