Emerging digital technologies

The first principle

Each of these technologies does one of three things to information: it records information so that no one can secretly change it (blockchain), it gathers information from the physical world and moves the computing to wherever it is cheapest or fastest (the internet of things, cloud and edge), or it turns information back into physical or sensory form (3D printing, augmented and virtual reality). Once a student sees which of these jobs a technology does, its uses, its limits and its risks follow almost directly, and the hype around each one becomes easier to judge.

The core

Blockchain: a record no one can quietly rewrite

• Hashing makes tampering visible. A cryptographic hash function turns any data into a short fixed length fingerprint, and changing even one letter changes the fingerprint completely. A blockchain groups transactions into blocks, and each block carries the hash of the block before it, so altering an old block breaks every link after it.
• Consensus replaces a central clerk. Copies of the ledger sit with many participants, called nodes, who must agree on each new block. In proof of work, used by Bitcoin, nodes compete to solve a costly puzzle, which makes rewriting history very expensive but uses large amounts of electricity, while in proof of stake, which Ethereum adopted in 2022, validators lock up coins as a guarantee and lose them if they cheat.
• Smart contracts are programs stored on a blockchain that run automatically when conditions are met, such as releasing payment when a shipment is confirmed.
• Public and permissioned chains. Anyone can join a public chain, while a permissioned chain admits only known members, which is what governments and banks mostly use for land records, supply chains and certificates.
• Cryptocurrency and a central bank digital currency differ in who stands behind them. A cryptocurrency such as Bitcoin has no issuer and no backing, while the Reserve Bank of India's (RBI) e rupee is legal tender issued by the central bank in digital form.

Connected devices and where computing happens

• The internet of things (IoT) links sensors and machines, such as smart meters, soil moisture probes and factory equipment, to networks so that they report data and can be controlled remotely. It depends on cheap sensors, low power radio links and, increasingly, 5G networks that can handle very large numbers of devices.
• Cloud computing rents computing power, storage and software over the internet on demand, in three models: infrastructure as a service, platform as a service and software as a service. It turns a large upfront cost into a running cost and lets a small firm use the same tools as a large one.
• Edge computing processes data close to where it is produced, on the device or at a nearby server, rather than in a distant data centre, which cuts delay and bandwidth; a self driving car cannot wait for a round trip to the cloud before it brakes.

Making information physical or sensory

• Additive manufacturing, or 3D printing, builds an object layer by layer from a digital design, adding material only where it is needed, while conventional machining removes material from a block. It suits complex shapes, small batches and custom parts such as dental implants, rocket engine parts and prosthetics.
• Augmented reality (AR) overlays digital information on the real world seen through a phone or glasses, virtual reality (VR) replaces the real world with a computer generated one, and mixed reality lets digital objects respond to real ones. Together they are called extended reality.
• The metaverse is the idea of persistent shared virtual spaces where people work, trade and meet as avatars, and a digital twin is a live virtual copy of a real machine, building or city, fed by IoT sensors, which engineers use to test changes before making them in the real world.

Dimensions

• Economic. Cloud and IoT lower the cost of starting a business and running a factory, while 3D printing shortens the path from design to product, and all three reward countries with design skills rather than cheap labour alone.
• Governance. Blockchain records for land titles and certificates, IoT based monitoring of water and power, and digital twins of cities promise cleaner administration, but only if the data entered is honest in the first place.
• Environmental. Proof of work mining uses large amounts of electricity and data centres need power and water for cooling, while smart grids and precision irrigation using IoT can save both.
• Security. Every connected camera or meter is a possible entry point for attackers, and cryptocurrencies have been used for ransom payments and laundering; the cybersecurity note and the money laundering note in Internal Security cover these threats.
• Legal and ethical. Data held on a foreign cloud raises questions of data localisation and jurisdiction, and an unchangeable blockchain sits uneasily with a person's right to have their data erased.

In practice

• Blockchain policy. The Ministry of Electronics and Information Technology (MeitY) published a National Strategy on Blockchain in 2021 and, in September 2024, launched the Vishvasya Blockchain Technology Stack, a shared blockchain platform hosted at National Informatics Centre data centres in Bhubaneswar, Pune and Hyderabad, so that departments can build applications without each running their own network.
• The e rupee. The RBI began a pilot of its central bank digital currency for wholesale use on 1 November 2022 and for retail use on 1 December 2022, after a Finance Act amendment widened the definition of bank notes to include digital form.
• Cryptocurrency taxed, not legalised. Since the Finance Act 2022, income from virtual digital assets is taxed at 30 per cent with a one per cent tax deducted at source on transfers, and crypto exchanges must register with the Financial Intelligence Unit under money laundering rules, but there is no law that makes crypto legal tender.
• Additive manufacturing. MeitY's National Strategy for Additive Manufacturing of February 2022 set targets such as developing 50 India specific technologies and training about one lakh workers, so that India gains a larger share of the global market.
• Cloud for government. The MeghRaj initiative, the GI Cloud of the Government of India, lets ministries use empanelled cloud services instead of building their own data centres.
• Examples. Smart meters under the Revamped Distribution Sector Scheme use IoT to cut power theft and billing errors, the Indian Space Research Organisation uses 3D printed parts in its engines, and some states have piloted blockchain for land records.

Issues and way forward

• Hype ahead of use. Many blockchain and metaverse pilots solved problems that an ordinary database could solve more cheaply, so a project should first ask whether it really needs many parties who do not trust each other.
• Regulatory gaps for crypto. Taxing crypto without a full law leaves investors unprotected and pushes trading offshore; a clear framework that treats crypto as an asset, in line with the synthesis paper of the International Monetary Fund and the Financial Stability Board that the G20 welcomed under India's presidency in 2023, is the remedy most often proposed.
• Insecure devices. Cheap IoT devices often ship with default passwords and no updates, so security standards and certification for connected devices, as other countries have begun to require, are needed.
• Dependence on foreign clouds and chips. Most cloud capacity used in India belongs to foreign firms and runs on imported chips, which links this topic to the chips note and to data localisation rules under the data protection law.
• Skills and standards. 3D printing and extended reality need designers, materials scientists and common standards, which is why the additive manufacturing strategy stresses skilling and testing centres.

Common confusions

• Blockchain and Bitcoin. Blockchain is the record keeping technology, while Bitcoin is one cryptocurrency built on it; a land registry can use a blockchain with no currency at all.
• Cryptocurrency and central bank digital currency. A cryptocurrency has no issuer and no legal tender status, while the e rupee is issued by the RBI and is legal tender like a bank note.
• Cloud and edge. Cloud computing centralises processing in large data centres for scale and cost, while edge computing moves it near the user for speed and less traffic; most systems use both.
• AR and VR. Augmented reality adds to the real world you still see, while virtual reality shuts it out and replaces it.
• 3D printing and machining. 3D printing adds material layer by layer, while machining cuts it away from a solid block.

For the exam

• Keyword bank: distributed ledger, hash, consensus, proof of work, proof of stake, smart contract, permissioned blockchain, central bank digital currency, internet of things, edge computing, software as a service, digital twin, extended reality, additive manufacturing, data localisation.
• Previous year questions: Practise the previous year questions on this topic →
• Use in an answer:
  • Introduction with data: Since the Finance Act 2022, income from virtual digital assets in India is taxed at 30 per cent with one per cent deducted at source, which shows the State regulating a technology before it has decided how to treat it in law.
  • Introduction with a source: The RBI's Concept Note on Central Bank Digital Currency of October 2022 set out why a sovereign digital rupee is different from private cryptocurrencies, and it led to the e rupee pilots that began that year.
  • Conclusion: Emerging technologies are tools, not ends, so policy should ask what problem each solves, fund the uses that pass that test and regulate the risks before they spread.
  • Conclusion: India's advantage lies in combining these tools with its digital public infrastructure, so that blockchain, IoT and cloud serve citizens at scale rather than remain pilots.