Introduction to Blockchain: Pros and

Cons. and Its Application in Industry

By:- Kaushik Ranjan

MCA Final Year Student
Arka Jain University, Jamshedpur,
CONTENTS
Abstract
Introduction
Literature Review
How Blockchain Technology Works
Advantage of Blockchain Technology
Disadvanatge of Blockchain Technology
Blockchain Application in Industry
Conclusion
References
Abstract
Blockchain is a ledger containing records of all transactions that have been
executed and shared among participating parties.

Each transaction is verified by majority of nodes in the network and stored in

ledger in interlinked blocks.

Blockchain is a decentralized record and isn't constrained by any monetary

foundation or government so far as that is concerned.

BitCoin is the most mainstream digital money, an illustration of the blockchain.

Anything of significant worth like Land Assets, Cars, and so on can be recorded
on Blockchain as a Transaction.
Introduction
The concept of Blockchain first came to fame in October 2008, as part of
a proposal for Bitcoin, with the aim to create P2P money without
banks. Bitcoin introduced a novel solution to the age-old human
problem of trust.

The underlying blockchain technology allows us to trust the outputs of

the system without trusting any actor within it. People and institutions
who do not know or trust each other, reside in different countries, are
subject to different jurisdictions, and who have no legally binding
agreements with each other, can now interact over the Internet
without the need for trusted third parties like banks, Internet
platforms, or other types of clearing institutions.
Literature Review
A systematic review of blockchain Xu, M., Chen, X. & Kou, G
Application of blockchain technology has extended from digital currency and into finance,
and it has even gradually extended into health care, supply chain management, market
monitoring, smart energy, and copyright protection.
In this study author explained about block chain technology and its current and future
application in Industries.

Michael Nofer Peter Gomber Oliver Hinz Dirk Schiereck

The rise of the blockchain technology in recent years also supports other concepts that
have been suggested.Szabo (1997) introduced the concept of ‘‘SmartContracts’’, which
combine computer protocols with user interfaces to execute the terms of a contract.
In this study the author explained an important application of blockchain known as “Smart
Contracts” which are protocols that reside on blockchain and used to execute terms of a
contract without a need for any third parties.
Literature Review
The Blockchain: Opportunities for Research in Information Systems and
Information Technology Jaideep Ghosh
The technology is founded upon the concept of a distributed ledger, a way of
decentralized cataloging and accounting for large volumes of data.
In this study the author explained the concept and technological aspects of blockchain
databases.

Blockchain challenges and opportunities: a survey Zibin Zheng

There is a wide spectrum of blockchain applications ranging from cryptocurrency, financial
services, risk management, internet of things (IoT) to public and social services.
In this study the author explained about the wide range of application of blockchain in
different industrial domains.
Literature Review
Blockchain technology: principles and applications Marc Pilkington
blockchain is a disruptive and foundational technology, but we expose the potential risks
and drawbacks of public distributed ledgers that account for the shift toward hybrid
solutions.
In this study the author explained the potential risks and drawbacks of public blockchain
and ways to mitigate it by a type of hybrid solution of both public and private blockchain.

A Blockchain Research Framework Marten Risius

The novel features that Blockchain introduces for example decentralized control and
immutability of event logs, determines the applicability and potential of the technology. In
our understanding, research on blockchain design and features forms the basis for the
value and management propositions.
In this study the author talks about the features that blockchain introduces and talks
about the potential applicability of the technology and ongoing research on this
technology.
How Blockchain Technology works?
The Bitcoin blockchain protocol introduced a mechanism of making it
expensive to copy digital values.

A copy of the ledger is stored on multiple devices of a cryptographically

secured P2P network. The ledger is also called blockchain.

It maintains a continuously growing list of transaction data records,

chained in blocks that are cryptographically secured from tampering
and revision.

In order to change the contents of that ledger, network users need to

reach a mutual agreement, also referred to as consensus.
Advantages of Blockchain Technology

Greater Transparency: Since blockchain is a type of distributed ledger, all

network participants share the same documentation as opposed to individual
copies. That shared version can only be updated through consensus, which
means everyone must agree on it.

Security: Blockchain network is provided with a unique identity which is linked

to his account. This ensures that the owner of the account himself is operating
the transactions. The block encryption in the chain makes it tougher for any
hacker to disturb the traditional setup of the chain.
Process Integrity: Users can trust that transactions will execute exactly as the
protocol commands and removes the need for a trusted third party. Due to the
security reasons, this program was made in such a way that any block or even a
transaction that adds to the chain cannot be edited which ultimately provides a
very high range of security.

Faster processing: Before the invention of the blockchain, the traditional

banking organization took a lot of time in processing and initiating the
transaction but after the blockchain technology speed of the transaction
increased to a very high extent. Before this, the overall banking process takes
around three days to settle but after using Blockchain, the time can be reduced
to nearly minutes or even seconds.
Disadvantages of Blockchain Technology

Large energy consumption: The consumption of power in the Blockchain is

comparatively high. The power consumption of Bitcoin miners was alone more
than the per capita power consumption of 159 individual countries.Keeping a
real-time ledger is one of the reasons for this consumption because every time
it creates a new node, it communicates with each and every other node at the
same time.
Maintenance Cost: The average cost of the Bitcoin transaction is $75-$160 by
the energy consumption. The storage problem might be covered by the energy
issues cannot be resolved. Every bitcoin network client stores the entire
transaction history, it became as large as 100GB. The more transactions
processed on the network, the faster the size grows.
Transaction delays: One of the biggest drawbacks of the major blockchains
that have been created so far is that they usually take a fairly long time —
typically a few hours — to register transactions. There are ways to work around
this limitation, such as using “off-chain” transactions. Still, in most cases writing
data to a blockchain is not instantaneous.

Unavoidable security flaw: There is one notable security flaw in bitcoin and
other blockchains: if more than half of the computers working as nodes to
service the network tell a lie, the lie will become the truth. This is called a ‘51%
attack’ and was highlighted by Satoshi Nakamoto when he launched bitcoin.For
this reason, bitcoin mining pools are monitored closely by the community,
ensuring no one unknowingly gains such network influence.
Blockchain Applications in the Enterprise
Cryptocurrencies: Using blockchain technology to build a currency. Tech companies
such as Facebook, Kik, and Signal have all experimented with building their own
cryptocurrencies to some degree as has BurgerKing which experimented with a
“WhopperCoin.”

Supply chain: A decentralized ledger among suppliers and customers to track

the origin and status of goods. For example, FedEx has been experimenting
with using blockchain for tracking high-value goods and Walmart has been
doing so for tracking the origin of fruits and vegetables.
Physical and intellectual property ownership: From recording the title for
property ownership to tracking the creators of music or photography and
making sure they get paid, blockchain is being used by a variety of industry
associations and startups to create a public, immutable record of ownership

Financial Services: Building a decentralized financial system to enable money

transfers, saving accounts, loans, and other key aspects of banks.

Smart Contracts: Contracts where the enforcement of execution of the

agreement is implemented by protocol rather than through litigation. Smart
contracts are built into Ethereum and promoted as part of IBM’s blockchains
solution for developers.
Conclusion
Blockchain technology could be quite complementary in a possibility
space for the future world that includes both centralized and
decentralized models.

The technology has gained huge popularity starting with their very first
application of cryptocurrencies.

More areas of applications are being discovered and tested in the field
of financial products, energy distribution, health care services,
governance,and many more with each passing day.

Once the technology is adopted and accepted on a global level, it’ll

transform the way we live today.
References
[1] Xu, M., Chen, X. & Kou, G. A systematic review of blockchain. Finance Innov 5,
27 (2019).

[2] The Blockchain: Opportunities for Research in Information Systems and

Information Technology by Jaideep Ghosh.

[3] “Blockchain” by Michael Nofer ,Peter Gomber ,Oliver Hinz ,Dirk Schiereck

[4] “Blockchain challenges and opportunities: a survey” by Zibin Zheng.

[5] “Blockchain technology: principles and applications” by Marc Pilkington.

[6] “A Blockchain Research Framework” by Marten Risius

THANK YOU