A SEMINAR REPORT

As partial requirement for the degree of Bachelor Of Computer Application

ON

Seminar Topic

SUBMITTED BY

Name : Mr. / Ms. ________________________________

University Exam No. : ____________________

UNDER GUIDANCE OF

Dr. Darshna Rajput

COMPUTER SCIENCE DEPARTMENT,

Dolat-Usha Institute Of Applied Sciences And Dhiru-
Sarla Institute of Management & Commerce, Valsad
Affiliated with
Veer Narmad South Gujarat University, Surat
* 2019 - 2020 *
 Computer Department

CERTIFICATE
This is to certify that the seminar presentation is satisfactorily
carried out on _________________________________________
______________ is a work done by Mr. / Ms. Priyanka V. Pandey
in partial fulfillment of the requirement for the award of the degree
of bachelor of computer applications during the academic year
2019 - 2020.
I appreciate his/ her hard work, honesty and discipline during the
training for concerned seminar presentation in our organization.

__________________ ___________________
Dr. Snehal Joshi Dr. Pankaj Desai
Head of Department Principal

__________________ Internal Assessment By

Dr. Darshna Rajput 1. ________________
Seminar Internal Guide 2. ________________

Presentation Certified Date:_____________

At T.Y.B.C.A Examination Examiners:
1. ________________
2. ________________
Acknowledgement
Presentation inspiration and motivation have always played a key role
in success of any venture.
I express my sincere thanks to Prof. Pankaj Desai, Principal, Dolat Usha
Institute.

I pay my deep sense of gratitude to Dr.Snehal Joshi (HOD) of

Computer department, Dolat Usha College, Valsad to encourge me to the
highest peak and to provide me the opportunity to prepare the project. I am
immensly obliged to my friends to their elevating inspiriting, encouraging
guidance and kind supervision in the completion of my project.

I feel to acknowledge my indebtedness and keep sense of gratitude to

my guide Dr.Darshana Rajput whose valuable guidance and kind supervision
given to me throughout the course which shaped the present work as it
shows.

Last, but not the least, my parents are also an important inspiration for
me. So with due regards, I express my gratitudes to them.
 Index

Chapter no. Content Page no.

Chapter-1 Introduction 1
Chapter-2 Objectives 3

Chapter-3 Blockchain

3.1- What is Blockchain? 4

3.2- How Blockchain Works? 5

3.3- Key Features of Blockchain
3.3.1-Corrupted 6
3.3.2-Decentralized
3.3.3-Enhansed Security
3.3.4-Distributed Ledger
3.3.5-Faster Settlement
3.4- Types of Blockchain
3.4.1-Public 11
3.4.2-Private
3.4.3-Consortium
3.4.4-Hybrid

3.5- Types of Network 14

3.6- Trems of Blockchain
3.6.1-API 15
3.6.2-Bitcoin
3.6.3-Smart contract

3.7- Blockchain Leading Sector 18

3.8- Web 3.0 in Blockchain 20

3.9- Advantages 21

3.10- Disadvantages 23

Chapter-4 Conclusion 24

Chapter-5 References 25

Chapter-6 PPT Slides 26

 Blockchain Technology

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
model as 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 consensus where
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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
consensus and anonymity are 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.

Smart Property is 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, smart phone 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

financial and 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. Non-Financial applications
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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Objectives
➢ A blockchain is an immutable, unforgeable ledger of assets and
transactions powered by a peer-to-peer network of nodes.
Cryptocurrencies and other decentralized applications rely on
blockchain technology to be a shared reality across non-trusting
entities.

➢ Satoshi Nakamoto’s greatest innovation was really blockchain, and

Bitcoin is the first application of it. The network is powered by
individual nodes incentivized by new coin generation using a proof-of-
work scheme. These nodes run a decentralized database or ledger of
cryptocurrency transfers. There is only a finite amount of Bitcoin that
will be deployed (21 million by the year 2140). For this reason it is often
called “digital gold” given the analogy to only a finite amount of real gold
existing on Earth.

➢ The Ethereum blockchain was created to allow Turing-complete

programs to run in a virtual machine on each node, called smart
contracts. This extends the blockchain applicability from a decentralized
database to a decentralized computer. The concept of gas was
introduced to measure the complexity of the program run and its value
is directly linked to Ether. Given arbitrary complexity of programs, it
was decided to allow an unlimited amount of Ether. For this reason it is
often called the “digital dollar” given the analogy to the ability for the US
government to print more dollars at any time.

➢ Allowing logic on the blockchain creates potential security holes and one
was exploited to effectively double-spend on Ethereum. When it was
discovered, the community reverted the faulty transactions and forked
away from Ethereum Classic. The problem has been patched and no
other such security issues have been discovered in the blockchain
since. Ethereum supports an active development community and there
are plans to migrate to a Proof-of-Stake consensus starting in 2018.

➢ It should be noted that since Ethereum is a platform for smart contracts,

it can support a separate token programmatically. Therefore over 90% of
the altcoins in existence have been based on Ethereum blockchain and
do not require a separate blockchain of their own.

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What is Blockchain ?
If this technology is so complex, why call it “blockchain?” At its most basic
level, blockchain is literally just a chain of blocks, but not in the traditional
sense of those words. When we say the words “block” and “chain” in this
context, we are actually talking about digital information (the “block”)
stored in a public database (the “chain”).

“Blocks” on the blockchain are made up of digital pieces of information.

Specifically, they have three parts:

1. Blocks store information about transactions like the date, time, and
dollar amount of your most recent purchase from Amazon. (NOTE:
This Amazon example is for illustrative purchases; Amazon retail
does not work on a blockchain principle as of this writing)
2. Blocks store information about who is participating in transactions. A
block for your splurge purchase from Amazon would record your
name along with Amazon.com, Inc. (AMZN). Instead of using your
actual name, your purchase is recorded without any identifying
information using a unique “digital signature,” sort of like a username.
3. Blocks store information that distinguishes them from other blocks.
Much like you and I have names to distinguish us from one another,
each block stores a unique code called a “hash” that allows us to tell it
apart from every other block. Hashes are cryptographic codes created
by special algorithms. Let’s say you made your splurge purchase on
Amazon, but while it’s in transit, you decide you just can’t resist and
need a second one. Even though the details of your new transaction
would look nearly identical to your earlier purchase, we can still tell
the blocks apart because of their unique codes.

While the block in the example above is being used to store a single
purchase from Amazon, the reality is a little different. A single block on the
Bitcoin blockchain can actually store up to 1 MB of data. Depending on the
size of the transactions, that means a single block can house a few thousand
transactions under one roof.

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How Blockchain works?

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 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.

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.

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Key features of Blockchain

1. Cannot be Corrupted
There are some exciting blockchain features but among them “Immutability”
is undoubtedly one of the key features of blockchain technology. But why is
this technology uncorrupted? Let’s start with a connecting blockchain with
immutability.

Immutability means something that can’t be changed or altered. This is one

of the blockchain features that help to ensure that the technology will remain
as it is – a permanent, unalterable network. But how does it maintain that
way?

Blockchain technology works slightly different than the typical banking

system. Instead of relying on centralized authorities, it ensures the
blockchain features through a collection of nodes.
Every node on the system has a copy of the digital ledger. To add a
transaction every node needs to check its validity. If the majority thinks it’s
valid, then it’s added to the ledger. This promotes transparency and makes it
corruption-proof.

Every node on the system has a copy of the digital ledger. To add a
transaction every node needs to check its validity. If the majority thinks it’s
valid, then it’s added to the ledger. This promotes transparency and makes it
corruption-proof.

So, without the consent from the majority of nodes, no one can add any
transaction blocks to the ledger.

Another fact, that backs up the blockchain features is that, once the
transaction blocks get added on the ledger, no one can just go back and
change it. Thus, any user on the network won’t be able to edit, delete or
update it.

How Can It Fight Corruption

We know how every year there’s a massive amount of money that gets
hacked through our regular channels. Many people spend Trillions of money

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to protect their business from any external hacks. However, we always forget
to count the internal cybersecurity risks that come from corrupted people and
authorities.

In many cases, there’s always an internal link for this hacks to know about
all the security measures, so in the end, we pay the price for our trust. As you
all know banks aren’t that trustable now and the global economy needs a
trustless environment to fully overcome this issue.

So, when it comes to a corruption-free environment, you can easily assume

that blockchain can definitely change a lot of these scenarios.

If businesses start to integrate blockchain technology to maintain their

internal networking system, no one would be able to hack into it or alter or
even steal information.

Public blockchains are a perfect example of this. Everyone in the public

blockchain can see the transactions, so it’ super transparent. On the other
hand, private or federated blockchain could be best for enterprises who want
to remain transparent among staff and protect their sensitive information
along the way from public view.

2. Decentralized Technology

The network is decentralized meaning it doesn’t have any governing

authority or a single person looking after the framework. Rather a group of
nodes maintains the network making it decentralized.

This is one of the key features of blockchain technology that works

perfectly. Let me make it simpler. Blockchain puts us users in a
straightforward position. As the system doesn’t require any governing
authority, we can directly access it from the web and store our assets there.

You can store anything starting from cryptocurrencies, important documents,

contracts or other valuable digital assets. And with the help of blockchain,
you’ll have direct control over them using your private key. So, you see the
decentralized structure is giving the common people their power and rights
back on their assets.

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Why it’s so Useful?

Now let’s see how blockchain features are truly making changes –

▪ Less Failure: Everything in blockchain is fully organized, and as it

doesn’t depend on human calculations it’s highly fault-tolerant. So,
accidental failures of this system are not a usual output.
▪ User Control: With decentralization, users now have control over their
properties. They don’t have to rely on any third party to maintain their
assets. All of them can do it simultaneously by themselves.
▪ Less Prone to Breakdown: As decentralized is one of the key features
of blockchain technology, it can survive any malicious attack. This is
because attacking the system is more expensive for hackers and not an
easy solution. So, it’s less likely to breakdown.
▪ No Third-Party: Decentralized nature of the technology makes it a
system that doesn’t rely on third-party companies; No third-party, no
added risk.
▪ Zero Scams: As the system runs on algorithms, there is no chance for
people to scam you out of anything. No can utilize blockchain for their
personal gains.
▪ Transparency: The decentralized nature of the technology creates a
transparent profile of every participant. Every change on the blockchain
is viewable and makes it more concrete.
▪ Authentic Nature: This nature of the system makes it a unique kind of
system for every kind of people. And hackers will have a hard time
cracking it.

3. Enhanced Security
As it gets rid of the need for central authority, no can just simply change any
characteristics of the network for their benefit. Using encryption ensures
another layer of security for the system.

But how does it offer so much security compared to already existing techs?

Well, it’s extremely secure because it offers a special disguise –

Cryptography. Added with decentralization, cryptography lays another layer
of protection for users. Cryptography is a rather complex mathematical
algorithm that acts as a firewall for attacks.

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Every information on the blockchain is hashed cryptographically. In simple

terms, the information on the network hides the true nature of the data. For
this process, any input data gets through a mathematical algorithm that
produces a different kind of value, but the length is always fixed.

You could think of it as a unique identification for every data. All the blocks
in the ledger come with a unique hash of its own and contain the hash of the
previous block. So, changing or trying to tamper with the data will mean
changing all the hash IDs. And that’s kind of impossible.

You’ll have a private key to access the data but will have a public key to
make transactions.

4. Distributed Ledgers

Usually, a public ledger will provide every information about a transaction

and the participant. It’s all out in the open, nowhere to hide. Although the
case for private or federated blockchain is a bit different. But still, in those
cases many people can see what really goes on in the ledger.

That’s because the ledger on the network is maintained by all other users on
the system. This distributed the computational power across the computers to
ensure a better outcome.

This is the reason it’s considered one of the blockchain essential features.
The result will always be a higher efficient ledger system that can take on the
traditional ones.

Why it’s one of the Blockchain Important Features?

▪ No Malicious Changes: Distributed ledger responds really well to any
suspicious activity or tamper. As no one can change the ledger and
everything updates real fast, tracking what’s happening in the ledger is
quite easy with all these nodes.
▪ Ownership of Verification: Here, nodes act as verifiers of the ledger. If
a user wants to add a new block other would have to verify the
transaction and then give the green signal. This provides the user with
fair participation.
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▪ No Extra Favors: No one on the network can get any special favors
from the network. Everyone has to go through the usual channels and
then add their blocks. It’s not like you have more power so you’ll get
more privileges.
▪ Managership: To make the blockchain features work, every active
node has to maintain the ledger and participate for validation.
▪ Quick Response: As I said earlier, removing the intermediates quickens
the system response. Any change in the ledger is updated in minutes or
even seconds!

5. Faster Settlement
Traditional banking systems are quite slow. Sometimes it can take days to
process a transaction after finalizing all settlements. It also can be corrupted
quite easily. Blockchain offers a faster settlement compared to traditional
banking systems. This way a user can transfer money relatively faster, which
saves a lot of time in the long run.

These blockchain important features make life easier for foreign workers.
Many people travel to another country in search of a better life and job and
leave families behind. However, sending money to their families overseas
takes a lot of time and could become fatal in time of need.

Now, blockchains are way too fast, and they can easily use it to send money
to their loved ones. Another fun fact is the smart contract system. This can
allow making faster settlements for any kind of contract. This is one of the
best benefits of blockchain features to this day. And with the third party out
of the way, people can send money with a minimal fee. Seems intriguing,
right?
This way blockchain will impact the international trades too!
So, why shouldn’t you use the blockchain technology? Although there are
some cases where the network struggles to support too many users and faster
settlement isn’t possible. Even so, many are improving this scenario, and
we’ll soon see a better take on the issue.

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Types of Blockchains.
There are three primary types of blockchains, which do not include
traditional databases or distributed ledger technology (DLT) that are often
confused with blockchains.

1. Public blockchains like Bitcoin and Ethereum

2. Private blockchains like Hyperledger and R3 Corda
3. Consortium blockchain
4. Hybrid blockchains like Dragonchai

• Public blockchain

Let's explore the different types of chains. And start with public blockchains,
which are open source. They allow anyone to participate as users, miners,
developers, or community members. All transactions that take place on
public blockchains are fully transparent, meaning that anyone can examine
the transaction details.

1. Public blockchains are designed to be fully decentralized, with no one

individual or entity controlling which transactions are recorded in the
blockchain or the order in which they are processed.
2. Public blockchains can be highly censorship-resistant, since anyone is
open to join the network, regardless of location, nationality, etc. This
makes it extremely hard for authorities to shut them down.
3. Lastly, public blockchains all have a token associated with them that is
typically designed to incentivize and reward participants in the
network.

• Private Blockchain
Another type of chains are private blockchains, also known as permissioned
blockchains, possess a number of notable differences from public
blockchains.

1. Participants need consent to join the networks

2. Transactions are private and are only available to ecosystem participants
that have been given permission to join the network

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3. Private blockchains are more centralized than public blockchains

Private blockchains are valuable for enterprises who want to collaborate and
share data, but don’t want their sensitive business data visible on a public
blockchain. These chains, by their nature, are more centralized; the entities
running the chain have significant control over participants and governance
structures. Private blockchains may or may not have a token involved with
the chain.

• Consortium blockchain
Consortium blockchains are sometimes considered a separate designation
from private blockchains. The main difference between them is that
consortium blockchains are governed by a group rather than a single entity.
This approach has all the same benefits of a private blockchain and could be
considered a sub-category of private blockchains, as opposed to a separate
type of chain.

1. This collaborative model offers some of the best use cases for the
benefits of blockchain, bringing together a group of "frenemies"-
businesses who work together but also compete against each other.
2. They are able to be more efficient, both individually and collectively, by
collaborating on some aspects of their business.
3. Participants in consortium blockchains could include anyone from
central banks, to governments, to supply chains.

• Hybrid blockchain
Dragonchain occupies a unique place within the blockchain ecosystem in
that it's a hybrid blockchain. This means that it combines the privacy benefits
of a permissioned and private blockchain with the security and transparency
benefits of a public blockchain. That gives businesses significant flexibility
to choose what data they want to make public and transparent and what data
they want to keep private.

1. The hybrid nature of Dragonchain blockchain platform is made possible

by our patented Interchain™ capability, which allows us to easily
connect with other blockchain protocols. Allowing for a multi-chain
network of blockchains

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2. This functionality makes it simple for businesses to operate with the

transparency they are looking for, without having to sacrifice security
and privacy.
3. Also, being able to post to multiple public blockchains at once increases
the security of transactions, as they benefit from the combined
hashpower being applied to the public chains.

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Types of Network
A network is a collection of devices or systems that are connected to each
other that allows them to share resources between them.

There are broadly three different kinds of network as highlighted in the

diagram:

1. Centralized network — In case of a centralized network, we have a

central network owner. The central network owner is a single point of
contact for information sharing. The biggest issue with a centralized
network is with a single central owner it also becomes a single point of
failure. Further, with a single copy stored with the owner, every
instance of access to the resource leads to an access issue with time.

2. Decentralized network — As for the decentralized network, the we

have multiple central owners that have the copy of the resources. This
eliminates the biggest problem of single point of failure with
centralized network. With multiple owners, if a particular central node
fails, the information can still be accessed from the other nodes.
Further, with multiple owners the speed of access to the information is
also reduced.

3. Distributed network — The distributed network is the decentralized

network taken to the extreme. It avoids the centralization completely.
The main idea for the distributed network lies in the concept that
everyone gets access, and everyone gets equal access.

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Terms of Blockchain
API

An application program interface (API) is a set of routines, protocols, and

tools for building software applications. Basically, an API specifies how
software components should interact. Additionally, APIs are used when
programming graphical user interface (GUI) components. A good API
makes it easier to develop a program by providing all the building blocks.
A programmer then puts the blocks together
Most operating environments, such as MS-Windows, provide APIs, allowing
programmers to write applications consistent with the operating
environment. Today, APIs are also specified by websites. For example,
Amazon or eBay APIs allow developers to use the existing retail
infrastructure to create specialized web stores. Third-party software
developers also use Web APIs to create software solutions for end-users.
Popular API Examples
ProgrammableWeb, a site that tracks more than 15,500 APIs, lists Google
Maps, Twitter, YouTube, Flickr and Amazon Product Advertising as some
of the the most popular APIs. The following list contains several examples
of popular APIs:
1. Google Maps API: Google Maps APIs lets developers embed Google
Maps on webpages using a JavaScript or Flash interface. The Google Maps
API is designed to work on mobile devices and desktop browsers.
2. YouTube APIs: YouTube API: Google's APIs lets developers integrate
YouTube videos and functionality into websites or applications. YouTube
APIs include the YouTube Analytics API, YouTube Data API, YouTube
Live Streaming API, YouTube Player APIs and others.
3. Flickr API: The Flickr API is used by developers to access the Flick
photo sharing community data. The Flickr API consists of a set of callable
methods, and some API endpoints.
4. Twitter APIs: Twitter offers two APIs. The REST API allows developers
to access core Twitter data and the Search API provides methods for
developers to interact with Twitter Search and trends data.
5. Amazon Product Advertising API: Amazon's Product Advertising API
gives developers access to Amazon's product selection and discovery
functionality to advertise Amazon products to monetize a website.

Bitcoin

Bitcoin is a form of digital “currency”. It is created and held electronically

on a computer. Bitcoins are not paper money like dollars, euro or yen by
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central banks or monetary authorities. Bitcoin is the first example of a

cryptocurrency, which is produced by people and businesses all over the
world using advanced computer software that solves mathematical problems.

Satoshi Nakamoto first proposed Bitcoin as a means of payment based on

mathematics. Bitcoin is a method of payment or transfer of value that is
independent of governmental authorities like central banks that traditionally
control the money supply and the availability of currency in the global
market. In many ways, Bitcoin is a pan-global means of exchange. Transfers
are made via computer immediately with low transaction fees. Bitcoin does
not flow through the traditional banking system; rather it flows from one
computer wallet to another.

Bitcoin cannot be held or kept in a pocket or wallet like currency; it is purely

a computer-based means of exchange.

Bitcoin is a fixed asset; there is only a total of 21 million coins. Solving the
advanced mathematical problems results in the mining of Bitcoins. However,
Bitcoin is divisible so the growth potential for the exchange medium is
unlimited. One of the most interesting inventions that came alongside
Bitcoin is blockchain or distributed ledger technology (DLT). DLT has
amazing potential when it comes to traditional operations and settlement
ramifications for businesses in the financial as well as other industries. DLT
tracks ownership and allows for immediate and efficient transfers of Bitcoin.

Bitcoin has several attributes that set it aside from traditional currencies as a
pan-global means of exchange. Central banks or monetary authorities do not
control the number of Bitcoins; it is decentralized making it global. Anyone
with a computer can set up a Bitcoin address to receive or transfer Bitcoins
in seconds. Bitcoin is anonymous; the cryptocurrency allows users to
maintain multiple addresses and setting up an address requires no personal
information. The DLT technology makes Bitcoin completely transparent; it
stores complete details by an address of every transaction that ever occurs.

Transfers of Bitcoin are immediate and once made, they are final. At the
same time, there are limited fees and international and domestic transfers are
not subject to foreign currency exchange rates and fees for the transfer.
There are no borders when it comes to Bitcoin.

Smart contract

A Smart Contract (or cryptocontract) is a computer program that directly and

automatically controls the transfer of digital assets between the parties under

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certain conditions. A smart contract works in the same way as a traditional

contract while also automatically enforcing the contract. Smart contracts are
programs that execute exactly as they are set up(coded, programmed) by
their creators. Just like a traditional contract is enforceable by law, smart
contracts are enforceable by code.
History/Introduction –
In 1994, Nick Szabo, a legal scholar, and a cryptographer, recognized the
application of decentralized ledger for smart contracts. He theorized that
these contracts could be written in code which can be stored and replicated
on the system and supervised by the network of computers that constitute the
blockchain. These smart contracts could also help in transferring of digital
assets between the parties under certain conditions.
How smart contracts work –
A smart contract is just a digital contract with the security coding of the
blockchain. A smart contract has details and permissions written in code that
require an exact sequence of events to take place to trigger the agreement of
the terms mentioned in the smart contract. It can also include the time
constraints that can introduce deadlines in the contract.

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Blockchain leading Sector

1. Banking

When the average person hears the word "blockchain," they probably think
"Bitcoin," and so it's no surprise that banking tops our list. Blockchain would
be a more secure way to store banking records, and a faster, cheaper way of
transferring money through the decentralization provided by blockchain.
Plus, there's minimal risk of a run on a blockchain system or a collapse, as
there's no central "vault." It's as though each person's money has its own
private vault that no one else can access.

2. Healthcare

Some of the biggest challenges in healthcare could be solved by a blockchain

system allowing all doctors and healthcare providers to access your health
records securely and easily. Unlike the days of paper records, or even today
when digital health records can be created and stored in a myriad of different
systems, your health records could be singular, complete, and travel with you
from birth to death, regardless of how many times you change doctors or
insurance systems. Additionally, your health information could be accessed
immediately, at any time, potentially offering doctors lifesaving information
in an emergency.

3. Politics

Rigged votes and “voting irregularities” could be a thing of the past, as could
the threat of rival governments or terrorist organizations hacking the vote.
Voting systems secured with blockchain technology would be completely
unhackable. From voter registrations to verifying identity to tallying votes,
the system would be indisputable. Gone would be the days of recounts and
“hanging chads.”

4. Real Estate

If you've ever bought or sold a home, you know how much paperwork is
involved. But blockchain systems could be used to simplify the process and
eliminate escrow altogether. Smart contracts could be designed that only
execute when certain conditions are met, including funding. Besides, all
these various documents could be stored securely. A startup called Deedcoin
is offering cryptocurrency powered transactions that decrease the
commission rate for the agent to as little as 1 percent.

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5. Legal Industry

Storing and retrieving documents as well as verifying their provenance are

key functions of the legal industry. With blockchain technologies, questions
over the legality of wills or other legal documents could be eliminated by
securely storing and verifying documents. Also, questions of digital
inheritance, especially with the rise of cryptocurrencies, can be eliminated
with blockchain secured documents.

6. Security

The whole basis of blockchain is to create decentralized and ultimately

secure ways of storing, verifying, and encrypting data, so naturally, security
is going to feel the force of this new technology. Decentralized data storage
in the cloud eliminates many of the problems of data hacks we’ve seen major
players dealing with over the last few years. Advanced cryptography based
on blockchain technologies can create virtually unhackable data encryption.

7. Government

Aside from voting systems, blockchain technologies could be used to help

reduce and eliminate bureaucratic red tape and corruption in government
agencies. For example, welfare, disability, veterans and unemployment
benefits could be more easily verified and distributed, eliminating fraud and
waste. Smart contracts could ensure that government funds are only released
when certain conditions are met whether to contractors or foreign
governments in the form of aid. And security, efficiency, and transparency in
government functions could be increased across the board.

8. Education

As the power of online and distance learning grows, so does the need for an
independent way of verifying students’ transcripts and educational records.
A blockchain based system could serve almost as a notary for educational
records, creating a way for employers and other educational institutions to
access secure records and transcripts. In fact, it could also help universities
and other large institutions collaborate. No longer would a student have to
wait for the course she wants to be offered at Harvard if Oxford is offering it
online; her grades and records would be easily and instantly transferable.

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Web 3.0 in Blockchain

The birth of blockchain spawned a movement which is set to disrupt the
entire tech industry. Blockchain and crypto enthusiasts are calling it the Web
3.0and it’s looking to make all traditional business models defunct. This is
because, in short, the technology will facilitate the decentralization of the
World Wide Web, thereby equalizing control and ownership back from the
grasp of profit hungry corporations.

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Advantages
1. It is a Decentralized System.

Yes, most of cases blockchain is a decentral system that means no

central authority can take control of the system.

The core value of blockchain is, it enables a database to be directly

shareable without a central administrator.

If any data stored in the memory and disk of a particular computer

system run by a third party even if it is a trusted organization like banks
and governments, it is vulnerable to access by anyone who somehow
got into that system can easily corrupt the data within.

Blockchain can eliminate the cost of hiring expert people to prevent or

to stop the attacks on the system by using cryptography.

2.The Blockchain is Transparent.

Any data in the blockchain can be viewable for any person, also if any
changes were made in the blockchain, those changes are publicly
viewable.That’s why blockchain used in cryptocurrencies because, in
cryptocurrency, every transaction is recorded and showed to the public.

3.The Blockchain is More Secure.

Yes, Blockchain is more secure to store data than any other 3rd party
systems, because blockchain uses cryptography.
Also, it is a transparent and secure system at the same time. Users, on
the other hand, are not transparent; up to a point, they too are secure
behind their wall.

If you are interested in, how blockchain work with the help of
cryptography then below video may be helpful for you.

4. Faster and Cost-Effective.

If you used any cross-border transactions and/or between banks can

take days and be quite expensive.

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But in the case of blockchain-based cryptocurrency transactions, you

can send money to anywhere and to anyone in the world because
blockchain is decentralized and no paper works needed.

To be clear, blockchain transactions are not fast (at all); they’re just
faster than international inter-banking. They are also cheaper, though
by no means free. In fact, if you want a speedier transaction, you’ll
have to pay for it. Still, compared to traditional system Blockchian is
faster and cost-effective.

5. It is Immutable.

If you record any data into the blockchain, then it is not easy to alter or
change that particular data.

In other words, you cannot go back to last week’s transaction and alter
the block that contains it. Well, you could, but then you would alter
every single block – and every single transaction within every block –
that comes after the altered transaction. For better or worse, that
transaction is there to stay.

That makes no sense to alter every block information, and it seems

impossible to alter or change blocks, especially in cryptocurrencies.

6.It Can Record Historical and Current Records In One Place.

You know Bitcoin Blockchain size in more than 200 GB! that means all
current and historical transactions recorded in the blockchain securely
and Bitcoin blockchain is decade old! You can go back and look at
Satoshi Nakamoto’s first blocks to see where it all began…

Unlike regular databases, blockchains contain every single block of

information, from the beginning of time until just a few minutes ago.

That’s why Blockchain is very helpful to store huge records and

manage them.

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Disadvantages
1. Complexity.
The blockchain is not as simple as it looks like, non-techie or old
generation people cannot understand this technology easily.

Nodes, Cryptography, Mining these terms somehow understandable by

some extent, but it is not possible to have a trustworthy service without
understanding.

2. Size of Blockchain.
As I mentioned above that Bitcoin Blockchain is 200 GB but, every day
when new transactions happen data are recorded to the blockchain then,
blockchain grows every second and get bigger & bigger.

Second famous cryptocurrency Etherium blockchain size is more than 1

TB!, that’s why large public implementations of Blockchain is critical.

3. Need More Resources.

Blockchain network requires nodes to run, old and famous network
have enough nodes to run their network but new blockchain facing the
problem of lack the number of nodes to facilitate widespread usage, and
nodes need more reward for their participation in the network.

Also, nodes are giving their time and energy to the network to run
efficiently, so they expect a high return, therefore, any new blockchain
network need more initial resources to facilitate nodes and take care of
other security measures.

4. Human Errors.
You already know that blockchain is immutable, therefore, information
going into the database needs to be 100% sure and correct if any
mistake happens with data, then it cannot be altered.

Also, most of the blockchain is access through Private Key if the

private key is lost then, it is almost impossible to access the network, so
this technology needs more accuracy than any system.

Above are some Disadvantages of Blockchain technology, but still,

there are cybersecurity concerns needs to be addressed before the
general public entrust their data to the Blockchain solutions.

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Conclusion
The Blockchain is the new type of the database which solved some of
the problems in the centralized system, such as the transactions without a
middleman, the spent time on each transaction, the unintentional or special
deletion or modification of data in the Blockchain. With the advantages of
the technology, such as the transparency, trusty, the multiple copying of the
transactions and the decentralized digital ledger, the Blockchain technology
is reliable and not destructible, and all mentioned attacks could disrupt the
system work, not the technology. It should be noted, that the attacks, which
are described in the paper, are more theoretical.

There are only few examples of the Blockchain hacking in practice. The
Blockchain technology is useful and versatile for our world, because it can
facilitate most of the systems in the different industries, but it is new
and it`s implementation is little studied issue on practice. The Blockchain
technology promises us the bright future without the fraud and deception due
to the benefits of the Blockchain technology. The developers must devote
more time to the practical application and implementation of the Blockchain
into the already existing systems of the main industrial directions,
because the Blockchain can bring the honest and trusty business,
government and logistic systems.

The challenges of the Blockchain are large, but the results of the Blockchain
using have a greater preponderance than disadvantages. It is necessary to
keep exploring the Blockchain development and application in the
different areas for the nearest future, because this new technology can help
to solve many difficult problems, which are disturbing and preventing
correctly systems work.

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References

➢ www.blockchain.com
➢ www.computerworld.com
➢ www.blockgeeks.com
➢ www.investopedia.com

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