Blockchain for Business

[AY 2024-25]
MBA Semester III
MSL7310

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Session 1: Introduction

Agenda
• Introduction to the Course
• Course Formalities
• Introduction to ”Blockchain Technology”
 Title: Blockchain for Business
 Course Code: MSL7310
• Class Schedule
• Online
 Area: SME
• Fridays: 6:00 pm – 8:00 pm
 Credits: 2 • Location:
 Sem: 3 https://meet.google.com/bhh-
 Duration: 28 hours ofjy-bra
 Instructor: V. N. Rajesh • Offline
 Email: vnrajesh@iitj.ac.in • Approximately 50% - 60% of the
sessions
 TA:
• Will be announced by MBA office
 Office Hours for Students
 Please send me an email if you want to
meet and we can schedule accordingly
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What is Blockchain?
 IBM’s Definition: Blockchain is a shared, immutable ledger that
facilitates the process of recording transactions and tracking assets
in a business network.
 An asset can be tangible (a house, car, cash, land) or intangible (intellectual
property, patents, copyrights, branding).
 Virtually anything of value can be tracked and traded on a blockchain
network, reducing risk and cutting costs for all involved.
 PWC’s Definition: A blockchain is a decentralized ledger of all
transactions across a peer-to-peer network. Using this technology,
participants can confirm transactions without a need for a central
clearing authority.
 Potential applications can include fund transfers, settling trades, voting, and
many other issues.
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What is Blockchain?
 The whole point of using a blockchain is to let people — in
particular, people who don't trust one another — share
valuable data in a secure, tamperproof way.
— MIT Technology Review
 Architecture of Trust
— Kevin Werbach

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Course Objectives
 Introduce the class to Blockchain Technology in the context of
managerial applications
 Explain the Blockchain’s business benefits
 Understanding different types of Blockchains and their utility in
different business contexts
 Where and how to implement Blockchain with innovative use
cases across education, Government, supply chain, hospitality,
land records, agriculture, elections, manufacturing, etc.
 Implementation challenges and mitigation techniques
Learning Outcomes
At the end of the course every committed participant would have
developed an appreciation of:
1. The underpinning business need for Blockchain
 Need for ‘trust’ in an environment where parties don’t trust a central
authority.
2. The technical understanding of the Blockchain Technology – how
the different technological components are integrated
3. Application of critical thinking and analytical reasoning to
construct Blockchain-based solutions for relevant industry use
cases.
4. The management, legal, regulatory and policy level challenges
involved in implementing Blockchain
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 Course will help cut through the hype to understand actual
ground realities
 More conceptual than technical
 Ask the right questions when Blockchain is proposed as a
solution
 5 – 6 Case Studies
 Participant Requirement:
 Designed to be stand-alone course
 Curiosity
 Willingness to do some background work
 Independent readings to keep in touch with current state-of-the-art
Tentative course contents [1]:

Bitcoin and Overview of

Blockchain Concepts
Blockchain Technical Concepts
• Introduction • Need for Trust • Bitcoin
• Blockchain • Smart Contracts • Technical
ecosystem and its • Distributed Components
players Autonomous • Distributed Ledger
• Different types of Organizations • Timestamping &
Blockchains – • Cryptocurrencies Hashing
Public & Private and NFTs • Merkle Trees
Tentative course contents [2]:
Overview of Some Popular Blockchain and
Technical Concepts Blockchain Networks Business Applications
• Bitcoin Mining • Permissioned vs • Finance &
• Consensus Permissionless Insurance
Mechanisms – • Hyperledger Fabric • Logistics & Supply
Proof-of-Work, • Ethereum Chain
Proof-of-Stake, etc. • R3 Corda • Sharing Economy
• Zero Knowledge • Ripple • Voting on
Proof Blockchain
• Blockchain • Education, etc.
Technology Stack
Tentative course contents [3]:
Blockchain Adoption
Demos & Hands-on Other Topics
& the future
• Bitcoin Demo • Start-up • When should you
• Use Case Modeling Ecosystem across use a Blockchain?
• ETH.BUILD countries • Adoption
• Sandbox • Blockchain in challenges
Government • Expected future
• Hyperledger
Fabric • Metaverse trajectory
• Ethereum • Regulatory • Managerial
challenges implications
 Course Text Book
 Prescribed Textbook:
 Saurabh, K., & Saxena, A. (2020).
Blockchain Technology Concepts
and Applications. Wiley India Pvt.
Ltd.
 Additional Reference:
 Lipton, Alexander, and Adrien
Treccani. Blockchain and
Distributed Ledgers: Mathematics,
Technology, and Economics.
World Scientific, 2021.
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 Text Book and References
• Primary Reference:
• Arvind Narayanan , Joseph Bonneau , Edward
Felten , Andrew Miller , Steven Goldfeder, “
Bitcoin and Cryptocurrency Technologies: A
Comprehensive Introduction”, Princeton
University Press, Princeton, NJ, 2016, draft
version available at:
https://bitcoinbook.cs.princeton.edu/
• Additional References:
• Tapscott, Don, and Alex Tapscott. Blockchain
Revolution: How the Technology Behind
Bitcoin Is Changing Money, Business, and the
World. Penguin, 2016.
• Jai Singh Arun, Jerry Cuomo and Nitin Gaur,
Blockchain for Business, Pearson, 1st Edition,
(2020, Indian Print)
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 Text Book and References
• Additional References:
• Swan, Melanie. “Blockchain:
Blueprint for a new economy. "
O'Reilly Media, Inc., 2015.
• Wattenhofer, Roger. “Distributed
Ledger Technology: The Science
of the Blockchain.” CreateSpace
Independent Publishing
Platform, 2017.
• Werbach, Kevin. “The blockchain
and the new architecture of
trust.” Mit Press, 2018.
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 Text Book and References
• Additional References:
• Antonopoulos, Andreas
M. Mastering Bitcoin: unlocking
digital cryptocurrencies. " O'Reilly
Media, Inc.", 2014.
• Antonopoulos, Andreas
M. ”Mastering Ethereum: Building
Smart Contracts and Dapps,”
O'Reilly Media, Inc.", 2018.
• Additional readings will be assigned
from time to time

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 Evaluation Scheme: Tentative
Sr. Component Weightage
No.
1. Minor Exam 20%
2. Attendance & Class Participation 10%
3. Group Assignment and/or Case Presentations 30%
4. Major Exam 40%

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Introduction to Blockchain
From physical transactions to blockchain [1]

 Alice hands-over a physical token to Bob

 Once Bob has the physical token and Alice has zero - The transaction
is complete.
 No verification: Alice and Bob do not need an intermediary to verify
the transaction.
 No double spending: Alice can’t give Charlie the same token,
because she no longer has the token to give — Bob has it. 18
From physical transactions to blockchain [2]

▪ What about a digital transaction?

▪ Alice sends Bob a digital token — via email, for example.
Bob should have the digital token, and Alice should not.
▪ Possibility of copies or “forgeries” of the digital token.
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Payment networks
▪ Prevention of fraudulent transactions and double spending
needs:
▪ Verification of whether a party has requisite funds to pay their
counterpart in a transaction
▪ Revealing private information (such as funds position) may
increase the possibility of funds being stolen before payment
▪ Traditional solution:
▪ Reliance on a trusted third-party for verification
▪ Increased transaction costs by charging fees
▪ Vulnerable to attack themselves
▪ Equifax hack of 2017 – personal details of 145.5 million Americans stolen 20
 From physical transactions to blockchain [3]

▪ Ledger – to record the transactions & prevent fraudulent

transactions
▪ Who will hold the ledger? A trusted third party who is not
involved in the transactions
▪ The third party might have too much power …..
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From physical transactions to blockchain [4]

▪ Decentralize trust by distributing the ledger to all their “trusted”

friends - verification
▪ If a simple majority of participants agree that the transaction is
valid, it gets added to the ledger 22
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 The blockchain solution
▪ First proposed by Satoshi Nakamoto in 2008
▪ Replaced centralized trusted third party with a network or
distributed community of users
▪ Decentralized peer-to-peer payment solution
▪ Integrated insights & ideas from many fields in a unique & original:
▪ Ledger
▪ immutable or append only with a succinct cryptographic digest of the state
of the ledger at any time
▪ Linked time-stamping (Haber & Stornetta, 1990-1997)
▪ Merkle trees – documents linked together within a block with a binary tree
of hash pointers (proposed by Ralph Merkle in 1980)
▪ Byzantine fault-tolerance
▪ problem studied in distributed computing
▪ unreliable communication channels
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How does the Bitcoin network work?
 The steps to run the network are as follows:
1. New transactions are broadcast to all nodes.
2. Each node collects new transactions into a block.
3. Each node works on finding a difficult proof-of-work for its
block.
4. When a node finds a proof-of-work, it broadcasts the block to
all nodes.
5. Nodes accept the block only if all transactions in it are valid
and not already spent.
6. Nodes express their acceptance of the block by working on
creating the next block in the chain, using the hash of the
accepted block as the previous hash. 25
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HOW BLOCKCHAIN TECHNOLOGY POWERS
BITCOIN

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HOW
BLOCKCHAIN
TECHNOLOGY
POWERS
BITCOIN

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Thanks

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