BLOCKCHAIN AND ITS MAIN

APPLICABILITY.
(Submitted on 2 September 2019)

By Sarvesh Napal
To Mr.A.Luckputtya.
Blockchain and its main applicability;

What is Blockchain?
A Blockchain is a continuously growing list of digital records in blocks.
It enables distributed public ledgers that hold permanent data which secured and
encrypted by using cryptography.
Each block in chain contains data is cryptographically hashed (data are converted
into a unique sting of text) and time stamped.
The blocks are then verified by thousands of computers around the web.
These digitally blocks of data which are verified are then added to a chain which is
store throughout the net creating a unique record and history. Altering a single
record will result in falsifying the entire chain in many instances. That would not
be virtually possible.

A model of blockchain:

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Types of Blockchain:

1. Public Blockchain:
Public Blockchain also known as permission-less are open sources which allow
anyone to contribute data to the ledger. It contains no restrictions.

Transactions details can be examined by anybody since all transaction that takes on
public are fully transparent. Since it is decentralized, no one individual control it.

Public Blockchain have a toke associated with them that it is typically designed to
incentivize and reward participants in the network.

2. Private Blockchain:

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Also known as permission Blockchain, only invited participants are only allow to
join the network. These networks are controlled by either a single or only
designated network administrators. Transactions are private and are only available
to participant. These Blockchain are more centralized than a public Blockchain
.Examples: hyperledger and R3 corda.

3.Hybrid Blockchain
Also known as the consortium Blockchain are sometimes considered to be semi-
decentralization and have characteristics of both public and private Blockchain

The difference between Hybrid Blockchain and the others is that it is

Governed by a group of organization rather a single entity.

Smart contracts :

Smart contract is a software that is managed by a peer to peer (p2p) network of

computer using Blockchain technology. It is capable of facilitating, executing and
enforcing the negotiation or performance of an agreement without the need of
traditional legal contracts where the terms of the smart contract are recorded in a
computer language as asset of instruction.

How does smart contact works?

1. Coding:

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 Since smart contracts works like computer programs, it is important that they do
what we order them to do. This is done by writing the proper logic or code of
the smart contract.

2. Distributed ledger:
The code when encrypted is sent to other computers via a distributed network of
ledgers. If this is done via public Blockchain such as bitcoin, the contract is sent
out similar to the way that a network update of a bitcoin transaction would
occur.

3. Execution:

A code is received from one of the computer in this network of distributed

ledgers.
They then come to an individual agreement on the results of the code execution.
The networks update the individual ledger by recording the execution of the
contracts.

History of Blockchain:

 In 1991the first work on cryptographically secured chain was done by Stuart

Haber and W.Scott Stornetta. They create a system where documents
timestamps could not be tempered with.

 In 1992, Bayer, Haber and Stornetta incorporate the Merkle tree (named
after Ralph Merkle) which improved its efficiency by allowing several
documents to be collected into one block.

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 In 2004, Hal Finney (Harold Thomas Finney II) a computer scientist
introduced a system called RPoW, Reusable Proof of Work. This system
received hashcash as a proof of work token and in exchange creates a RSA
(wildly used to secure data transmission) signed tokens that can be
transferred from person to person.

 In 2008, a group or person used a pseudonym Satoshi Nakamoto which

introduce a decentralized peer to peer electronic cash system called bitcoin.
It did not use RPoW instead used a decentralized peer to peer protocol.

 On 2009, the 3rd of January the first bitcoin was mined by Satoshi Nakamoto
which had a reward of 50 bitcoins. On 12 January 2009, the first recipient of
bitcoin was Hal Finney which he received 10 bitcoins from Satoshi
Nakamoto in the world’s first bitcoin transaction.

 In 2013, Vitalik Buterin, a programmer and bitcoin magazine co-founder

who failed to gain agreement to in the community thus he started developing
a new Blockchain based distribution computing platform called Ethereum
Which feature a functionality called smart contact. Developers are also able
to create and publish applications that run inside Ethereum Blockchain.
These applications are referred to as DApps (decentralized applications)
running in the Ethereum Blockchain, example social media platforms,
gambling applications, and financial exchanges.

 In 2014, Neo Project is launch as antshares (Blockchain platform) by Da

Hongfei and Erik Zhang.

 In 2015, the Linux Foundation unveiled an Umbrella project of open source

blockchain. It was called Hyperledger, which till now acts as a collaborative
development of distributed ledgers. Under the leadership of Brian
Behlendorf, Hyperledger seeks to advance cross industry collaboration for
the development of blockchain and distributed ledgers.
Hyperledger focus is to encourage the use of blockchain technology to
improve performance and reliability of current systems to support global
business transactions.
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 In 2017, A company called block.one unveiled EOS.IO as a new blockchain
protocol for the deployment of decentralized applications.
 2018-present, Blockchain technology keeps on evolving since the number
of cryptocurrencies is increasing as well as companies.

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How Blockchain operates:

1. Someone request a transaction,

2. The requested transaction is broadcast to a peer to peer network consisting of

computers known as nodes

3. A verified transaction is validated by the nodes.

4. Once it is verified, the transaction is fused with existing transaction to form a

new block of data for the ledger.

5. The new block is then added to the existing Blockchain in a way that is
unchangeable and lasting.

6. The transaction is then complete.

Distribution ledger technology:

A distributed ledger technology is an agreement of replicated, shared, and

synchronized digital data spread across multiple sites and countries. Unlike
Traditional databases, distributed ledgers have no central data store. Blockchain is
the most commonly known type of distribution ledger technology.

In a distributed ledger, each node (independent computers) processes and verifies

every item thus generating records of them. It then generates a record and creates a
consensus on each item accurately.

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Decentralized and centralized ledgers:

In a Decentralize ledger, there is no central point of control. It works by

transferring data over a ledger on nodes or server. It has some
advantages such as

 Fraud prevention.
 Not easy to temper with.
 It can prevent failures.

Disadvantages:

 Due to anonymous nature behind the technology, there is a fear of

criminal activity.

In a centralize ledger, majority of the supply is owned and control by a single

entity, mainly the developer. Having great ownership in supplying coins, this
grants the developer a huge power for managing the entire network. Some of its
advantages:

 Focused vision
 Reduced cost
 Fast execution

Disadvantages:

 Require a higher capital investment.

 Low morale motivation
 Unsuitable of large organization

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Why is blockchain important?

● Inexpensive:

Most of the traditional financial models that are available in the

market are expensive, however, with blockchain it is inexpensive.
Operational cost is reduced in a blockchain’s distributed ledger.
When using blockchain, there is no need to pass through a lawyer for
any transaction thus time savings and cost saving.

 Security purpose
The digital world is filled with hackers looking to breach information
or steal data from sources. With blockchain technology, the
information stored has robust security making it impossible for one to
hack due to its digital signature and encryption.

 Imminent Interoperability
It is a property that allows sharing of resources between different
systems which will enable interaction between blockchain and legacy
company. It will enable more companies to incorporate and interact
with blockchain companies and thus they will be looking to hire
people who have some basic blockchain knowledge hence creating
jobs.

 Transparency:
Since everything is displayed on the network, banks and clients are
quickly notified about any completion of transactions thus fewer
chance of any disagreement that can be created.

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 Less transaction time:
Transaction are processed very faster than usual since there is no need
to include payment systems thus reduces the trouble of waiting for
hours.

 Stability
Confirmed blocks are unlikely to be reversed, which means that once
data has been registered into blockchain, it is pretty much impossible
to remove or change it. It would be harder for an employee to hide
suspicious transactions.

 Supply chain management:

A blockchain can be used to track the movement of goods, their
origin, quantity. This brings a whole new level of transparency to the
business to business ecosystem (B2B).

 Smart contracts
With smart contracts, agreements can be automatically validated,
signed and enforced through a blockchain construct. This eliminates
the need for mediators thus saving the company time and money.

 Voting
Blockchain technology could minimize voting irregularities. It
worked with the joint efforts of their blockchain technology partner
and local digital identification solutions, which provided governments
with identity cards. Everything could be secured from casting the
votes to tallying the votes.

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 Applications of Blockchains:

Financial services:
Cryptocurrencies are coins that are passed through an electronic network. The use
of blockchain technology allows the entire financial service industry to
dramatically optimize business processes by sharing data in a secure ,transparent
and efficient manner since the traditional capital markets infrastructure is slow ,
expensive and require several negotiator. Blockchain allows entities to deliver
better, more secure and private services to businesses and individuals.

Asset management:
Traditional trade processes within asset management which is where parties trade
and manage assets, can be expensive and risky, especially when it comes to cross-
border transactions. The broker, custodian, or the settlement manager, everyone in
the process keeps their own records which create significant inefficiencies and
room for error. The blockchain ledger reduces error by encrypting the records. At
the same time, the ledger simplifies the process, while canceling the need for
negotiators.

Insurance, Claims processing:

It is a fulfillment by a insurer which receive, investigate and act on a claim filed by
an insured. It can take lots of procedures to obtain one as all process are done
manually thus taking time. Hence the blockchain technology provides a risk free
management and transparency. Its property of encryption allows insures to capture
the ownership of assets to be insured.

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Government:
The blockchain technology can improve government services and foster more
transparent government-citizen relations. The ledger can prevent hackers from
setting up the electronic system to alter votes since votes will become encrypted.
Private individuals can then confirm that their votes were counted and can also
confirm who they voted for. The system saves money and for the government also.
Government can also improve their way of delivering services, prevent tax fraud
and reduce waste. Blockchain could lighten worldwide population from high
taxation and smooth disorder relationships.

Blockchain healthcare:
Blockchain technology can greatly improve the health care industry operations. It
can open the door for optimizing business and service delivery. The distributed
Ledger Technology(DLT)is an innovation which can improve transparency,
security and efficiency. Specific individual health record could be encoded and
stored on the blockchain. The individuals will then receive a private key which will
grant them access to their records. Due to the property of blockchain, the data
stored cannot be alter this minimizing frauds. The data can be viewed easier,
analyzed and updated more quickly than the existing healthcare system which is
slow, expensive and requires many different intermediaries.

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Blockchain Identity:
Online companies know all about us when we purchase form them. They sell our
identity to advertisers who sent us their ads. Business companies uses your data to
get profits with your stats and demographic info thus improving their marking
strategies. This is where blockchain is important as it blocks spammers and
marketing scheme by creating a protected data point where you can encrypt only
the information that you want relevant people to know. Having a single blockchain
identity could reduce the need to share any personal information at all.

Blockchain music:
When online music sharing began, the industry has struggle with finding new ways
to monetize (convert into the form of currency) digital music. Key problems in the
music industry was also ownership rights, royalty distribution and transparency.
Therefor the blockchain and smart contract can solve this problem by creating a
comprehensive and accurate decentralized databased of music rights.
Simultaneously, the ledger provides transparent transmission of artist royalties,
including distributions to co-writers, producers, publishers and technology
partners.

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Blockchain internet of things (IoT):
“The internet of thing” basically refers to the concept of connecting any device
with an on or off switch to the internet and to each other. This includes everything
from cellphones, coffee makers, washing machines, headphones and many others
electronic devices. Blockchain technology Can be used to track billions of
connected devices and also keep track of what is being done through each
interaction. It also enables the processing of transaction and coordination between
devices. The use of smart contracts is one of the ways to improve connectivity and
IoT. They are automatically carried out when a specific condition is met. On a
larger scale, cities and governments can use IoT to develop cleaner environments,
energy will be used more efficiently to improve how we live and work. Therefore,
blockchain technology can not only improve the compliance in the IoT but also its
features and cost-efficiency as well.

Supply chain:
A supply chain is how goods get from point A to point B, more specifically how
the materials are sourced at first, manufactured, and then finally distributed to the
end-user. This is a very long process. Supply chain require active management to
keep the chain functioning and affordable for a company’s bottom line. By using
blockchain technology, we can take care of bloated and incompetent supply chain.
Blockchain based supply chain solutions are changing the way industries do
business by offering end to end decentralized process via the distributed and digital
public ledger. It helps in facilitating more transparent supply chain operation.
Certifying items on the blockchain can help save industries millions that would
otherwise be lost to counterfeiting and fraud. The use of blockchain technology
gives much faster transactions which means faster supply chain.

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Conclusion:
In conclusion, Blockchain can be described as a data structure that holds
transactional records and while ensuring security, transparency, and
decentralization. It’s also a chain or records stores in the forms of blocks which are
controlled by no single authority. The revolutionary technology of Blockchain
holds a high potential of applications in many different industries and sectors.
Some industries have already started adopting blockchain in their businesses, many
are still exploring the best possible ways to start with. But it’s important to note
that for the blockchain to work, the node to node network must be motivated and
agree to work under ethical standards. Only if these standards are met, the
blockchain could become a powerful tool for improving business, conducting fair
trade, democratizing the global economy, and helping societies.

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References:
 Blockgeeks.com

 Exceed.economist.com
 Hackermoon.com
 Dragonchain.com
 Blockchainhub.net
 Blockchaintechnology.com
 Coindesk.com
 www.binance.vision

 101blockchains.com
 www.upwork.com

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