A

Seminar Report on

“Blockchain Technology”

Submitted In Partial Fulfillment of the Requirement

For The Second Year of Engineering
In Computer Science & Engineering of
Dr. Babasaheb Ambedkar Technological University, Lonere
Submitted By

Mr.Yash Sharad Bhalerao

En. No.- 2251701242010

Under The Guidance of

Prof. Dr.Y.S.Patil

DEPARTMENT OF COMPUTER SCIENCE & ENGINEERING

HSM’S SHRI SANT GADGE BABA
COLLEGE OF ENGINEERING AND TECHNOLOGY, BHUSAWAL -
425203
DR. BABASAHEB AMBEDKAR TECHNOLOGICAL UNIVERSITY,
LONERE
2023-2024

1
 Shri Sant Gadge Baba
College of Engineering and Technology,
Bhusawal 425-203

Certificate
This is to certify that Mr. Yash Sharad Bhalerao has successfully
completed her Seminar on “Blockchain Technology” for the partial fulfillment of
the award of Second Year of Engineering in the Computer Science & Engineering
as prescribed by the Dr. Babasaheb Ambedkar Technological University, Lonere
during academic year 2023-2024.

Prof.Dr. Y.S.Patil Prof. Dr. D.D.Patil

(Guide) (H.O.D.)

Prof. Dr. R. B. Barjibhe

(Principal)

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 DECLARATION
I hereby declare that the Seminar report entitled, “Blockchain Technology”
is studied and written by me under the guidance of Prof. Dr.Y.S.Patil., Asst Prof.
Department of Computer Science and Engineering, Shri Sant Gadge Baba College
of Engineering and Technology, Bhusawal. This report is written by studding
various articles, books, papers, journals and other resources available on internet
out of which some of them are listed in the end of report.

Place: Bhusawal Yash Sharad Bhalerao

Date: En. No.2251701242010

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 ACKNOWLEDGEMENT

I feel great pleasure in submitting this Seminar report on “Blockchain

Technology”. I would wish to thank our Principal Prof. Dr. R. B. Barjibhe, and
H.O.D., Prof. Dr. D. D. Patil
I wish to express true sense of gratitude towards my teacher and guide, Prof.
Dr.Y.S.Patil who at every discrete step in study of this Seminar contributed his
valuable guidance and help me to solve every problem that arose.
Most likely I would like to express my sincere gratitude towards my family
and friends for always being there when I needed them the most.
With all respect and gratitude, I would like to thank all authors listed and not
listed in references whose learning and concepts are studied and used by me
whenever required. I owe my all success to them.

Mr.Yash Sharad Bhalerao

S.Y.B.Tech. CSE, 2023-2024, SGBCOET,BSL

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 ABSTRACT
A blockchain is essentially a distributed database of records or public ledger of
all transactions or digital events that have been executed and shared among
participating parties. Each transaction in the public ledger is verified by consensus
of a majority of the participants in the system. And, once entered, information
can never be erased. The blockchain contains a certain and verifiable record of
every single transaction ever made. Bitcoin, the decentralized peertopeer digital
currency, is the most popular example that uses blockchain technology. The
digital currency bitcoin itself is highly controversial but the underlying blockchain
technology has worked flawlessly and found wide range of applications in both
financial and nonfinancial world.
The main hypothesis is that the blockchain establishes a system of creating a
distributed consensus in the digital online world. This allows participating entities
to know for certain that a digital event happened by creating an irrefutable record
in a public ledger. It opens the door for developing a democratic open and
scalable digital economy from a centralized one. There are tremendous
opportunities in this disruptive technology and revolution in this space has just
begun.
This white paper describes blockchain technology and some compelling
specific applications in both financial and nonfinancial sector. We then look at the
challenges ahead and business opportunities in this fundamental technology that
is all set to revolutionize our digital world.

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 CONTENTS

Chapter No. Title Page No.

Title sheet 1

Certificate 2

Declaration 3

Acknowledgment 4

Abstract 5

Content 6

1 Introduction 7-8

2 Blockchain Technology 9-12

3 Existing Market 13-14

4 Application 15-19

5 Risks for adoption 20

6 Corpotrate Funding And Interest 21

7 Conclusion 22

Reference 23

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 INTRODUCTION

A blockchain is essentially a distributed database of records or public ledger of all

transactions or digital events that have been executed and shared among participating parties.
Each transaction in the public ledger is verified by consensus of a majority of the participants in
the system. And, once entered, information can never be erased. The blockchain contains a
certain and verifiable record of every single transaction ever made. To use a basic analogy, it is
easy to steal a cookie from a cookie jar, kept in a secluded place than stealing the cookie from a
cookie jar kept in a market place, being observed by thousands of people.
Bitcoin is the most popular example that is intrinsically tied to blockchain technology. It is
also the most controversial one since it helps to enable a multibillion-dollar global market of
anonymous transactions without any governmental control. Hence it has to deal with a number
of regulatory issues involving national governments and financial institutions.
However, Blockchain technology itself is non-controversial and has worked flawlessly over
the years and is being successfully applied to both financial and non-financial world
applications. Last year, Marc Andreessen, the doyen of Silicon Valley’s capitalists, listed the
blockchain distributed consensus modelas the most important invention since the Internet
itself. Johann Palychata from BNP Paribas wrote in the Quintessence magazine that bitcoin’s
blockchain, the software that allows the digital currency to function should be considered as an
invention like the steam or combustion engine that has the potential to transform the world of
finance and beyond.
Current digital economy is based on the reliance on a certain trusted authority. Our all online
transactions rely on trusting someone to tell us the truth—it can be an email service provider
telling us that our email has been delivered; it can be a certification authority telling us that a
certain digital certificate is trustworthy; or it can be a social network such as Facebook telling us
that our posts regarding our life events have been shared only with our friends or it can be a
bank telling us that our money has been delivered reliably to our dear ones in a remote
country. The fact is that we live our life precariously in the digital world by relying on a third
entity for the security and privacy of our digital assets. The fact remains that these third party
sources can be hacked, manipulated or compromised.
This is where the blockchain technology comes handy. It has the potential to revolutionize
the digital world by enabling a distributed consensuswhere each and every online transaction,
past and present, involving digital assets can be verified at any time in the future. It does this
without compromising the privacy of the digital assets and parties involved.
The distributed consensusand anonymityare two important characteristics of blockchain
technology.
The advantages of Blockchain technology outweigh the regulatory issues and technical
challenges. One key emerging use case of blockchain technology involves “smart contracts”.
Smart contracts are basically computer programs that can automatically execute the terms of a
contract. When a pre-configured condition in a smart contract among participating entities is
met then the parties involved in a contractual agreement can be automatically made payments
as per the contract in a transparent manner.

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 Smart Propertyis another related concept which is regarding controlling the ownership of a
property or asset via blockchain using Smart Contracts. The property can be physical such as
car, house, smartphone etc. or it can be non-physical such as shares of a company. It should be
noted here that even Bitcoin is not really a currency--Bitcoin is all about controlling the
ownership of money.
Blockchain technology is finding applications in wide range of areas—both financialand non-
financial.
Financial institutions and banks no longer see blockchain technology as threat to traditional
business models. The world’s biggest banks are in fact looking for opportunities in this area by
doing research on innovative blockchain applications. In a recent interview Rain Lohmus of
Estonia’s LHV bank told that they found Blockchain to be the most tested and secure for some
banking and finance related applications.
Non-Financialapplications opportunities are also endless. We can envision putting proof of
existence of all legal documents, health records, and loyalty payments in the music industry,
notary, private securities and marriage licenses in the blockchain. By storing the fingerprint of
the digital asset instead of storing the digital asset itself, the anonymity or privacy objective can
be achieved.
In this report, we focus on the disruption that every industry in today’s digital economy is
facing today due to the emergence of blockchain technology. Blockchain technology has
potential to become the new engine of growth in digital economy where we are increasingly
using Internet to conduct digital commerce and share our personal data and life events.
There are tremendous opportunities in this space and the revolution in this space has just
begun. In this report we focus on few key applications of Blockchain technology in the area of
Notary, Insurance, private securities and few other interesting non-financial applications. We
begin by first describing some history and the technology itself.

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 Chapter 1:
BLOCKCHAIN TECHNOLOGY

1. Short History of Bitcoin

In year 2008, an individual or group writing under the name of Satoshi Nakamoto
published a paper entitled “Bitcoin: A Peer-To-Peer Electronic Cash System”. This paper
described a peer-to-peer version of the electronic cash that would allow online
payments to be sent directly from one party to another without going through a
financial institution. Bitcoin was the first realization of this concept. Now word
cryptocurrencies is the label that is used to describe all networks and mediums of
exchange that uses cryptography to secure transactions-as against those systems where
the transactions are channeled through a centralized trusted entity.
The author of the first paper wanted to remain anonymous and hence no one knows
Satoshi Nakamoto to this day. A few months later, an open source program
implementing the new protocol was released that began with the Genesis block of 50
coins. Anyone can install this open source program and become part of the bitcoin peer-
to-peer network. It has grown in popularity since then.
– 2008
• August 18 Domain name "bitcoin.org" registered
• October 31 Bitcoin design paper published
• November 09 Bitcoin project registered at SourceForge.net
– 2009
• January 3 Genesis block established at 18:15:05 GMT
• January 9 Bitcoin v0.1 released and announced on the cryptography mailing list
• January 12 First Bitcoin transaction, in block 170 from Satoshi to Hal Finney
The popularity of the Bitcoin has never ceased to increase since then. The underlying
BlockChain technology is now finding new range of applications beyond finance.

2. Blockchain Technology: How does it work?

We explain the concept of the blockchain by explaining how Bitcoin works since it is
intrinsically linked to the Bitcoin. However, the blockchain technology is applicable to
any digital asset transaction exchanged online.
Internet commerce is exclusively tied to the financial institutions serving as the
trusted third party who process and mediate any electronic transaction. The role of
trusted third party is to validate, safeguard and preserve transactions. A certain
percentage of fraud is unavoidable in online transactions and that needs mediation by
financial transactions. This results in high transaction costs.
Bitcoin uses cryptographic proof instead of the trust in the third party for two willing
parties to execute an online transaction over the Internet. Each transaction is protected
through a digital signature. Each transaction is sent to the “public key” of the receiver
digitally signed using the “private key” of the sender. In order to spend money, owner of
the cryptocurrency needs to prove the ownership of the “private key”. The entity
receiving the digital currency verifies the digital signature –thus ownership of

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corresponding “private key”--on the transaction using the “public key” of the sender.
Each transaction is broadcast to every node in the Bitcoin network and is then recorded
in a public ledger after verification. Every single transaction needs to be verified for
validity
before it is recorded in the public ledger. Verifying node needs to ensure two things
before recording any transaction: 1. Spender owns the cryptocurrency—digital signature
verification on the transaction. 2. Spender has sufficient cryptocurrency in his/her
account: checking every transaction against spender’s account (“public key”) in the
ledger to make sure that he/she has sufficient balance in his/her account.

Figure 1. Financial Transactions using the Blockchain technology .

However, there is question of maintaining the order of these transactions that are
broadcast to every other node in the Bitcoin peer-to-peer network. The transactions do
not come in order in which they are generated and hence there is need for a system to
make sure that double-spending of the cryptocurrency does not occur. Considering that
the transactions are passed node by node through the Bitcoin network, there is no
guarantee that orders in which they are received at a node are the same order in which
these transactions were generated.

Figure 2. Double spending due to propagation delays in peer-to-peer network.

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 This means that there is need to develop a mechanism so that the entire Bitcoin
network can agree regarding the order of transactions, which is a daunting task in a
distributed system.

Figure 3. Generation of Blockchain from unordered transactions.

The Bitcoin solved this problem by a mechanism that is now popularly known as
Blockchain technology. The Bitcoin system orders transactions by placing them in groups
called blocks and then linking these blocks through what is called Blockchain. The
transactions in one block are considered to have happened at the same time. These
blocks are linked to each-other (like a chain) in a proper linear, chronological order with
every block containing the hash of the previous block.
There still remains one problem. Any node in the network can collect unconfirmed
transactions and create a block and then broadcasts it to rest of the network as a
suggestion as to which block should be the next one in the blockchain. How does the
network decide which block should be next in the blockchain? There can be multiple
blocks created by different nodes at the same time. One can’t rely on the order since
blocks can arrive at different orders at different points in the network.
Bitcoin solves this problem by introducing a mathematical puzzle: each block will be
accepted in the blockchain provided it contains an answer to a very special
mathematical problem. This is also known as “proof of work”—node generating a block
needs to prove that it has put enough computing resources to solve a mathematical
puzzle. For instance, a node can be required to find a “nonce” which when hashed with
transactions and hash of previous block produces a hash with certain number of leading
zeros. The average effort required is exponential in the number of zero bits required but
verification process is very simple and can be done by executing a single hash.

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Figure 4 Mathematical race to protect transactions-I 3.

This mathematical puzzle is not trivial to solve and the complexity of the problem can be
adjusted so that on average it takes ten minutes for a node in the Bitcoin network to
make a right guess and generate a block. There is very small probability that more than
one block will be generated in the system at a given time. First node, to solve the
problem, broadcasts the block to rest of the network. Occasionally, however, more than
one block will be solved at the same time, leading to several possible branches.
However, the math of solving is very complicated and hence the blockchain quickly
stabilizes, meaning that every node is in agreement about the ordering of blocks a few
back from the end of the chain. The nodes donating their computing resources to solve
the puzzle and generate block are called “miner” nodes” and are financially awarded for
their efforts.

Figure 5. Mathematical race to protect transactions-II 4 .

The network only accepts the longest blockchain as the valid one. Hence, it is next to
impossible for an attacker to introduce a fraudulent transaction since it has not only to
generate a block by solving a mathematical puzzle but it has to at the same time
mathematically race against the good nodes to generate all subsequent blocks in order
for it make other nodes accept its transaction & block as the valid one. This job becomes
even more difficult since blocks in the blockchain are linked cryptographically together.

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 Chapter II:
EXISTING MARKET

Blockchain technology is finding applications in both financial and non-financial areas

that traditionally relied on a third trusted online entity to validate and safeguard online
transactions of digital assets. There was another application “Smart Contracts” that was
invented in year 1994 by Nick Szabo. It was a great idea to automatically execute
contracts between participating parties. However, it did not find usage until the notion
of crypto currencies or programmable payments came into existence. Now two
programs blockchain and smart contract can work together to trigger payments when a
preprogrammed condition of a contractual agreement is triggered. Smart Contracts are
really the killer application of the cryptocurrency world.
Smart contracts are contracts which are automatically enforced by computer
protocols. Using blockchain technology it has become much more easier to register,
verify and execute Smart Contracts. Open source companies like Ethereum and Codius
are enabling Smart Contracts using blockchain technology. Many companies which
operate on bitcoin and blockchain technologies are supporting Smart Contracts. Many
cases where assets are transferred only on meeting certain conditions which require
Lawyers to create a contract and Banks to provide Escrow service can be replaced by
Smart Contracts.
Ethereum has created lot of excitement for its programmable platform capabilities.
Ethereum allows anyone to create their own cryptocurrency and use that to execute,
pay for smart contracts. Ethereum itself has its own cryptocurrency (ether) which is
used to pay for the services. Ethereum is already powering wide range of early
applications in areas such as Governance, autonomous banks, keyless access,
crowdfunding, financial derivatives trading and settlement using smart contracts.
Also, there are a number of blockchains in existence to support wide range of
applications--not just cryptocurrency. Currently there are three approaches in Industry
to support other applications and also to overcome perceived limitations of Bitcoin
blockchain:
Alternative Blockchainsis a system of using the blockchain algorithm to achieve
distributed consensus on a particular digital asset. They may share miners with a parent
network such as Bitcoin’s--this is called merged mining. They have been suggested to
implement applications such as DNS, SSL certification authority, file storage and voting.

Colored Coins is an open source protocol that describes class of methods for
developers to create digital assets on top of Bitcoin blockchain by using its
functionalities beyond digital currency.
Sidechains are alternative blockchains which are backed by Bitcoins via Bitcoin
contract--just as dollars and pounds used to be backed by Gold. One can possibly have a
thousands of sidechains “pegged” to Bitcoin, all with different characteristics and
purposes--all of them taking advantage of scarcity and resilience guaranteed by the
Bitcoin blockchain. The Bitcoin blockchain can in turn iterate to support additional
features for the experimental sidechains--once they have been tried and tested.

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 Companies such as IBM, Samsung, Overstock, Amazon, UBS, Citi, Ebay, Verizon
Wireless to name a few are all exploring alternative and novel uses of the blockchain for
their own applications. Nine of the world’s biggest banks including Barclays and
Goldman Sachs have recently ( Sept. 5 15, 2015) joined forces with the New York based
financial technology firm R3 to create a framework for using the blockchain technology
in the financial market. This is the first time banks have come to work together to find
applications of blockchain technology. Leading banks like JPMorgan, State Street, UBS,
Royal Bank Of Scotland, Credit Suisse, BBVA and Commonwealth Bank of Australia have
joined this initiative.
Next, we give a short description of what kind of interesting applications and projects
innovative and visionary companies are doing in this space.

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 Chapter III:
APPLICATIONS

1. Financial Applications:

1.1. Private Securities

It is very expensive to take a company public. A syndicate of banks must work to
underwrite the deal and attract investors. The stock exchanges list company shares
for secondary market to function securely with trades settling and clearing in a
timely manner. It is now theoretically possible for companies to directly issue the
shares via the blockchain. These shares can then be purchased and sold in a
secondary market that sits on top of the blockchain. Here are some examples:
NASDAQ Private Equity: NASDAQ launched its Private Equity Exchange in 2014 .
This is 6 meant to provide the key functionalities like Cap table and investor
relationship management for the the pre-IPO or private companies. The current
process of trading stocks in this exchange is inefficient and slow due to
involvement of multiple 3rd parties. NASDAQ has joined hands with a San
Francisco based Start-up called chain.com to 7 implement private equity exchange
on top of BlockChain. Chain.com is implementing BlockChain based smart
contracts to implement exchange functionality. This product is expected to be fast,
traceable and efficient.
Mediciis being developed as a securities exchange that uses the Counterparty
implementations of Bitcoin 2.0. The goal here is to create a cutting edge stock
market. Counterparty is a protocol that implements traditional financial
instruments as the self-executing smart contracts. These smart contracts facilitate,
verify or enforce the negotiation of contract and eliminate the need for a physical
document. This eliminates the need for an intermediary, such as broker, exchange
or bank.
Blockstream is an open source project with focus on sidechains--interoperable
blockchains--to avoid fragmentation, security and other issues related to
alternative crypto-currencies. Uses can range from registering securities, such as
stocks, bonds and derivatives, to securing bank balances and mortgages.
Coin setter is a New York based bitcoin exchange. It is working on a Project
Highline, a method of using the blockchain to settle and clear financial transactions
in T+ 10 minutes rather than the customary T+3 or T+2 days.
Augur is a decentralized prediction market that will allow users to buy and sell
shares in anticipation of an event with the probability that a specific outcomes will
occur. This can also be used to make financial and economic forecasts based on
the “wisdom of crowds”.
Bitshares are digital tokens that reside in the blockchain and reference specific
assets such as currencies or commodities. The Token holders may have the unique
feature of earning interest on commodities, such as gold, and oil, as well as dollars,
euros and currency instruments.

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 1.2. Insurance
Assets which can be uniquely identified by one or more identifiers which are
difficult to destroy or replicate can be registered in blockchain. This can be used to
verify ownership of an asset and also trace the transaction history. Any property
(physical or digital such as real estate, automobiles, physical assets, laptops, other
valuables) can potentially be registered in blockchain and the ownership,
transaction history can be validated by anyone, especially insurers.
Ever ledger is a company which creates permanent ledger of diamond
certification and the transaction history of the diamond using blockchain. The
characteristics which uniquely identify the diamond such as height, width, weight,
depth, color etc are hashed and registered in the ledger. The verification of
diamonds can be done by insurance companies, law enforcement agencies,
owners and claimants. Ever ledger provides a simple to use web service API for
looking at a diamond, create/read/update claims (by insurance companies) and
create/read/update police reports on diamonds.

2. Non Financial Applications:

2.1. Notary Public

Verifying authenticity of the document can be done using blockchain and eliminates the
need for centralized authority. The document certification service helps in Proof of
Ownership (who authored it), Proof of Existence (at a certain time) and Proof of Integrity
(not tampered) of the documents. Since it is counterfeit-proof and can be verified by
independent third parties these services are legally binding. Using blockchain for
notarization secures the privacy of the document and those who seek certification. By
publishing proof of publication using cryptographic hashes of files into block chain takes the
notary timestamping to new level. It also eliminates the need for expensive notarization
fees and ineffective ways of transferring documents.
Stampery is a company which can stamp email or any files using blockchain. It simplifies
certifying of emails by just emailing them to an email specifically created for each customer.
Law firms are using Stampery’s technology for a very cost effective way to certify documents.

Viacoin is the one of the companies which uses clearinghouse protocol for notary service. Block
Notary is an iOS app which helps you to create proof of existence of any content (photo, files,
any media) using TestNet3 or Bitcoin network. Crypto Public Notary which uses Blockchain of
Bitcoin to notarize documents by using trivial amount of bitcoins to record the file’s checksum
in public blockchain.
Proof of Existence is another service which uses blockchain to SHA256 digest of the document
in bitcoin blockchain.
Ascribe is another company which does authorship certification using blockchain. It
also offers transfer of ownership service with attribution to the original author.

2.2.Applications of Blockchain in the Music Industry

The music industry has gone a big change in last decade due to the growth of Internet
and availability of a number of streaming services over the Internet. It is impacting

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 everyone in the music industry-artists, labels, publishers, songwriters and streaming
service providers. The process by which music royalties are determined has always been
convoluted one, but the rise of the Internet has made it even more complex giving rise
to the demand of transparency in the royalty payments by artists and songwriters.
This is where the blockchain can play a role by maintaining a comprehensive,
accurate distributed database of music rights ownership information in a public ledger.
In addition to rights ownership information, the royalty split for each work, as
determined by “smart contracts” could be added to the database. The “smart
contracts” would define relationships between different stakeholders (addresses) and
automate their interactions

2.3.Decentralized proof of existence of documents

Validating the existence or the possession of signed documents is very important in any
legal solution. The traditional document validation models rely on central authorities for
storing and validating the documents, which present some obvious security challenges.
These models become even more difficult as the documents become older.
The blockchain technology provides an alternative model to proof-of-existence and
possession of legal documents. By leveraging the blockchain, a user can simply store the
signature and timestamp associated with a legal document in the blockchain and
validate it anytime using native blockchain mechanisms.
Proof of Existence is a simple service that allows one to anonymously and
securely store online proof of existence of any document. This service simply stores the
cryptographic digest of the file, linked to the time in which a user submits his/her
document. It is to be noted here that cryptographic digest or fingerprint--not the actual
document- is stored in blockchain, so user need not be worried about the privacy
aspect.
This allows then a user to later certify the existence of a document that existed
at a certain time.
The major advantages of this service is security and privacy that allows a user to give
decentralized proof of the document that can’t be modified by a third party. The
existence of the document is validated using blockchain that does not depend on a
single centralized entity.

2.4.Decentralized Storage
Cloud file storage solutions such as Dropbox, Google Drive or One Drive are growing in
popularity to store documents, photos, video and music files. Despite their 16 17
Sutardja Center for Entrepreneurship & Technology Technical Report popularity, cloud
file storage solutions typically face challenges in areas such as security, privacy and data
control. The major issue is that one has to trust a third party with one’s confidential
files.
Storj provides a blockchain based peer-to-peer distributed cloud storage
platform that allows users to transfer and share data without relying on a third-party
data provider. This allows people to share unused internet bandwidth and spare disk
space in their personal computing devices to those looking to store large files in return
for bitcoin based micropayments.

17
 Absence of a central control eliminates most traditional data failures and
outages, as well as significantly increasing security, privacy and data control. Storj
platform depends upon a challenge algorithm to offer incentivization for users to
properly participate in this network. In this way, Storj platform can periodically
cryptographically check the integrity and availability of a file, and offer direct rewards to
those maintaining the file.
Here, bitcoin based micropayments serve as both an incentive and payment
while a separate blockchain is used as a datastore for file metadata.

2.5.Decentralized IoT
The IOT is increasingly becoming popular technology in both the consumer and the
enterprise space. A vast majority of IOT platforms are based on a centralized model in
which as broker or hub controls the interaction between devices,However, this
approach has become impractical for many scenarios in which devices need to
exchange data between themselves autonomously. This specific requirement has lead
to efforts towards decentralized IoT platforms.
The blockchain technology facilitates the implementation of decentralized IoT
platforms such as secured and trusted data exchange as well as record keeping. In such
an architecture, the blockchain serves as the general ledger, keeping a trusted record
of all the messages exchanged between smart devices in a decentralized IoT topology.
IBM in partnership with Samsung has developed a platform ADEPT (Autonomous
Decentralized Peer To Peer Telemetry) that uses elements of the bitcoin’s underlying
design to build a distributed network of devices-a decentralized Internet of Things (IOT).
ADEPT uses three protocols-BitTorrent (file sharing), Ethereum ( Smart Contracts) and
TeleHash ( Peer-To-Peer Messaging)-in the platform.
Filament(see Appendix for details)is a startup that provides a decentralized IoT
software stack that uses the bitcoin blockchain to enable devices to hold unique
identities on a public ledger.

2.6.BlockChain based Anti-Counterfeit Solutions

Counterfeiting is one of the biggest challenges in the modern commerce. It is one of
the biggest challenge that digital commerce world faces today. Existing solutions are
based on reliance on trust on a third party trusted entity that introduces a logical
friction between merchants and consumers.
The blockchain technology with its decentralized implementation and security
capabilities provide an alternative to existing anti-counterfeiting mechanisms. One can
envision a scenario, in which brands, merchants and marketplaces are part of a
blockchain network with nodes storing information to validate the authenticity of the
products. With the use of this technology, stakeholders in the supply chain need not
rely on a centralized entity for authenticity of the branded products.
BlockVerify(see Appendix for details)provides blockchain based anti-counterfeit
solutions that introduce transparency to supply chains. It is finding applications in
pharmaceutical, luxury items,diamonds and electronics industries.

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2.7.Internet Applications
Namecoinis an alternative blockchain technology (with small variations) that is used to
implement decentralized version of Domain Name Server (DNS) that is resilient to
censorship. Current DNS servers are controlled by governments and large corporations,
and could abuse their power to censor, hijack, or spy on your Internet usage. Use of
Blockchain technology means since DNS or phonebook of the Internet is maintained in a
decentralized manner and every user can have the same phone book data on their
computer.
Public Key Infrastructure (PKI) technology is widely used for centralized distribution and
management of digital certificates. Every device needs to have root certificate of the
Certification Authority (CA) to verify digital signature. While PKI have been widely
deployed and incredibly successful, dependence on a CA makes scalability an issues.
The characteristics of the BlockChain can help address some of the limitations of
the PKI by using Keyless Security Infrastructure (KSI). KSI uses cryptographic hash
function, allowing verification to rely only on the security of hash functions and the
availability of a blockchain.

19
 Chapter IV:
RISKS FOR ADOPTION

BlockChain is a promising breakthrough technology. As we described before, there are vast

array of applications or problems that can be solved using BlockChain based technology. That
spans from Financial (remittance to investment banking ) to non-financial applications like
Notary services. Most of these are radical innovations. As it happens with adoption with radical
innovations, there are significant risks of adoption.

Behavior change:
Change is constant, but there is resistance to change. In the world of a non-tangible trusted
third party, that BlockChain presents, customers need to get used to the fact that there
electronic transactions are safe, secured and complete. The present day intermediaries like Visa
or Mastercard ( in case of a credit cards ) will also go through change roles and responsibility.
We envision that they will also invest and move their platforms to be BlockChain-based. They
will continue to provide the customer relationship kind of services.
Scaling:
Scaling of the current nascent services based on BlockChain presents a challenge. Imagine
yourself executing a BlockChain transaction for the first time. You will have to go through
downloading the entire set of existing BlockChains and validate before executing your first
transaction. This may take hours or longer as the number of blocks increase exponentially.
Bootstrapping:
Moving the existing contracts or business documents/frameworks to the new BlockChain based
methodology presents a significant set of migration tasks that need to be executed. For
example in case of Real Estate ownerships/liens, the existing documents lying in County or
Escrow companies need to be migrated to the equivalent BlockChain form. This may involve
time and cost.
Government Regulations:
In the new world of BlockChain-based transactions, Government agencies like FTC, SEC, etc may
slow down the adoption by introducing new laws to monitor and regulate the industry for
compliance. In USA, this may in a way help adoption as these agencies carry customer trust. In
more controlled economies like in China, the adoption will face significant headwind.
Fraudulent Activities:
Given the pseudonymous nature of BlockChain transactions, coupled with ease of moving
valuables, the bad guys may misuse this for fraudulent activities like money trafficking. That
said, with enough regulations and technology support law enforcement agencies will be able to
monitor and prosecute them.
Quantum Computing :
The basis of BlockChain technology relies on the very fact that 8 it is mathematically impossible
for a single party to game the system due to lack of needed compute power. But with the
advent of Quantum Computers ( in future ), the cryptographic keys may be easy enough to
crack through sheer brute force approach within a reasonable time. This will bring the whole
system to its knee. The counter-argument would be for keys to become even stronger so that
they may not be easy to crack.

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 Chapter V:
CORPORATE FUNDING & INTEREST

In 2015, the bitcoin currency has reached yearly highs in both volume and price over the
course of September-October. The digital currency is gaining traction both in the consumer
marketplace, as a tradeable security, and with regulators. It isn't just digital-currency
enthusiasts that are bullish. Equity research firm Wedbush expects it to rise to $600 because of
the growing adoption.

Bitcoin price in 2015 . 9 This enthusiasm may be because of the large quantities of capital
being injected into the digital infrastructure. Excitement grows as Bitcoin and blockchain firms
have received a record US$1 Billion in investments as the year comes to an end. American
Express, Bain Capital, Deloitte, Goldman Sachs, MasterCard, the New York Life Insurance
Company, the New York Stock Exchange -- all of them have poured millions of dollars into
Bitcoin firms recently.

Corporate funding into Bitcoin & Blockchain infrastructure is growing and generating interest
in several segments. Nasdaq is tapping blockchain technology to create a more secure, efficient
system to trade stocks. DocuSign, a company that specializes in electronic contracts, just
unveiled a joint idea with Visa to use blockchain to track car rentals and reduce paperwork.
Microsoft will unveil details about its venture into "smart contracts" that use blockchain
technology. Meanwhile, this new obsession with blockchain technology has reached a point
that companies are even experimenting with creating smaller, "private blockchains" inside their
own offices. They hire companies like BlockCypher, a startup out of Redwood City, California to
develop blockchain technology within their business.

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 Chapter VI:
CONCLUSION

To conclude, Blockchain is the technology backbone of Bitcoin. The distributed ledger

functionality coupled with security of BlockChain, makes it very attractive technology to solve
the current Financial as well as non-financial business problems.
As far as the technology is concerned, the cryptocurrency based tech is either in the downward
slope of inflated expectations or in trough of disillusionment as shown in Figure 8 below.

There is enormous interest in BlockChain based business applications and hence numerous
Start-ups working on them. The adoption definitely faces strong headwind as described before.
The large Financial institutions like Visa, Mastercard, Banks, NASDAQ, etc., are investing in
exploring application of current business models on BlockChain. In fact, some of them are
searching for the new business models in the world of BlockChain. Some would like to stay
ahead of the curve in terms of transformed regulatory environments of BlockChain.
To conclude, we envision BlockChain to go through slow adoption due to the risks associated.
Most of the Startups will fail with few winners. We should be seeing significant adoption in a
decade or two.

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 REFERENCE

1. Bitcoin: A Peer-to_peer Electronic Cash System

2. Smart Contracts: Nick Szabo
3. Formalizing and Securing Relationships on Public Networks: Nick Szabo
4. Introduction To Smart Contracts
5. The Ultimate List of Bitcoin and Blockchain White Papers
6. Bitcoin Tutorial
7. A Risk-Based View of Why Banks are Experimenting with Bitcoin and the Block 8.
Blockchain:The Information Technology of The Future
8. Bitcoin 2.0 Applications
9. Beyond Bitcoin:How the Blockchain Can Power a New Generation of Enterprise Software
10. Forget Bitcoin-What is the Blockchain and Why Should You Care?
11. Alternative Blockchains:
a. Alternative Blockchains
b. Colored Coins
c. Sidechains
12. Internet of Things:
a. IBM and Samsung Reveal Proof of Concept of Blockchain-Powered Internet of
Things.
b. ADEPT
c. Filament
13. Music:
1. 11 http://risktech-forum.com/opinion/a-risk-based-view-of-why-banks-are-
experimenting-with-bitcoin-and-the-block 23 24 Sutardja Center for Entrepreneurship &
Technology Technical Report
a. Fair Music:Transparency and Payment Flows in the Music Industry
b. Bitcoin For Rockstars
c. Your Streaming Music Payments are Going Where?
d. PeerTracks
e. Ujo
14. Distributed Storage:
a. How Blockchain Tech Could Revolutionize Data Storage
b. Storj
c. Metadisk
15. Quantum Computers: The End of Cryptography?

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