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Blockchain and Cyber Law

Cyber law is an emerging field of law. It has been continuously evolving since its origin in a realm of law. However, due to advent advent of new technologies and with new technological paradigms emerging, Cyber law is trying to adapt new technologies and challenges that are coming in its realm of law and blockchain is one of them which is constantly emerging and developing throughout the world.

Blockchain is basically the list of records that are growing in today's scenario and they are linked with using cryptography. Every block contains hash cryptography of previous block, transaction data and timestamp. Blockchain can be described as a data structure that holds transactional records and while ensuring security, transparency, and decentralization.

In its simplest form a blockchain is decentralized digital ledger capable of recording transactions. It's an open distributed ledger that is capable to record transactions between two parties efficiently and in a permanent way. This is done by cryptography that links the new block to the older one and form a blockchain. Any attempt to tamper the old data would corrupt the new data and data following it as well.

Blockchain is a new paradigm/ideal of technological development. It refers to digitalised decentralized public ledger of transactions that are subsequently grouped into blocks. [1] It allows market participants to keep a track of digital currency transactions without Central record keeping.[2]

Thus, each block is chained to previous block and immutably recorded across a peer to peer network using, cryptographic assurance mechanism.Once you store an information on a blockchain, it is extremely difficult to change or alter it.

Each transaction on a blockchain is secured with a digital signature that proves it to be authenticated. The uses of encryptions and Digital Signatures, makes the data stored on the blockchain tamper-proof and it cannot be changed.

The most prominent example of it is Bitcoin. Blockchain can be used to make wills, sell personal items or even discover the source of jewels. Blockchains do not merely reflect a record of who paid whom; it contains any structured data (for example, who owns a particular plot of land).

This potential for vast and wide-ranging applications is what makes blockchain so exciting.

Blockchain technology was first outlined in 1991 by Stuart Haber and W. Scott Stornetta, the two researchers who wanted to establish a system where document timestamps could not be tampered. But it established almost after two decades, with the launch of Bitcoin in January 2009, theblockchainthen had its first real-world application.

The Bitcoin protocol is built on the blockchain. In a research paper introducing the digital currency, Bitcoin's pseudonymous, Satoshi Nakamoto referred to blockchain as a new electronic cash system that's fully peer-to-peer, with no trusted third party.

When it comes to printed currency, the use of it is regulated and verified by a central authority, usually by a bank or government-but Bitcoin is not controlled by anyone. Instead, transactions made in bitcoin are verified by a network of computers. This is what is meant by the Bitcoin network and blockchain being decentralized.

The completed transaction is recorded publicly and stored as a block on the blockchain, at this point it becomes unalterable. In the case of Bitcoin, and most other blockchains, computers that successfully verify blocks are rewarded for their labour with cryptocurrency. This is commonly referred to as mining.

In order to make transactions on the Bitcoin network, participants must run a program called a wallet. Each wallet comprises of two unique and distinct cryptographic keys: a public key and a private key. The public key is the location where transactions are deposited and withdrawn. This is also the key that appears on the blockchain ledger as the user's digital signature. A user's public key is an abridged version of their private key, created through a complicated mathematical algorithm.For this reason, blockchain technology is considered confidential.

Features of blockchain

The following features make the technology of blockchain stand out:
Blockchains are decentralized in nature i.e. no single person or group holds the authority of the overall network. This unique feature of blockchain allows transparency and security while giving power to all the users and not to any particular authority.

Peer-to-Peer Network

The interaction between two parties through blockchain using a peer-to-peer model is easily accomplished without the interference of any third party. Blockchain uses P2P protocol that allows all the network participants to hold an identical copy of transactions and enables approval through a machine consensus.


The immutability feature of a blockchain refers to the fact that any data once fed on the blockchainit cannot be changed or altered. For example sending email, Once you send an email to a bunch of people, you cannot take it back. In order to reach a way, you'll have to ask all the recipients to delete your email which is very tedious. This is how immutability works.In case of the blockchain, if you try to change the data of one block, you'll have to change the entire blockchain as each block stores the hash of its preceding block. Hence, the data stored in a blockchain is non-alterable or resistant to hacker attacks due to immutability.


With the property of immutability implanted in blockchains, it becomes easier to detect tampering of any data. Blockchains are considered tamper-proof as any change even in a single block can be detected and addressed smoothly. There are two key ways of detecting tampering, i.e. hashes and blocks.

There are three types of blockchain networks:
  • Public blockchains
  • Private blockchains
  • Hybrid blockchains

Public blockchains

A public blockchain has absolutely no restrictions. Anyone with an Internet connection canparticipate in the execution of a consensus protocol.Some of the most known public blockchains are the bitcoinblockchain and the Ethereumblockchain.

A public blockchain is Permission-less Ledger and can be accessed by any and everyone. Anyone with the access to the internet is eligible to download and access it. It allows the worldwide communities to exchange information openly and securely with anyone and everyone.

Private blockchains

A private blockchain is permissionable ledger that can't be accessed by anyone. One cannot join it unless invited by the network administrators. Participant and validator access is restricted and permission is required to use the same.

Private blockchains are the ones which are shared only among the trusted participants unlike in public blockchain which can be accessed by everyone. Under private blockchain the overall control of network is in hands of owners of the block. Hence, the level of trust is high under private blockchain.

Hybrid blockchain

A hybrid blockchain has a combination of both centralized and decentralized features. It is an alternative of public and private blockchain. The right to read the transaction can either be public or private. The blockchain can be designed in way to allow public users to limit the number of queries and can secure the block.

Advantages and Disadvantages of Blockchain:

  • Improvement of accuracy by removing human involvement in verification
  • Reduction of cost by eliminating third-party verification
  • Harder to tamper with blocks
  • Security, privacy and efficiency of transactions
  • Transparency of technology

  • Technological cost associated with mining Bitcoin
  • Low rate of transactions per second
  • Use in illicit activities
  • Susceptibility to being hacked


The countries are trying to strengthen their cyber Laws by increasing the number of encryption related regulations. Many countries are reemphasizing the state power by forcing service providers and corporates to share information concerning backdoors and the encryption technologies.

Technology of Blockchain has a high potential hold of applications in various different industries and sectors. Some industries have already started adopting blockchainfor their businesses, whereas many are still exploring the best possible ways to start with blockchain technology.

Peer-to-peer transactions without mediators could lower the cost of business, eliminate the barriers to enter business and allow governments, corporations and other entities to deliver services with better accuracy, speed and security.

Thepaper-based contracts are vulnerable to errors and frauds which make the trust factor between both the parties doubtful and raise risks. Blockchain brought forward an amazing solution to these problems through Smart online Contracts. The smart contracts will allow transparency and security while maintaining the privacy of the contractors. Therefore, once the blockchain technology is adopted globally, the way of life's and business would transform.

  1. (Visited on February 18,2020)
  2. (visited on February 18, 2020)

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