IV

Applications of
Blockchain
Technology
Diva Tertia Almira
Fauzian Rizqi Pramanda
Muhammad Bagas Dewantoro
Muhammad Madaniy Fadlulhaq
Nisrina Miranda A.

April 22, 2021 BUSINESS & MANAGEMENT

 What is Blockchain?
Blockchain has received considerable hype, starting with “cryptomania” in the trading markets in the year 2017 to broad discussions about its
potential impact across public and private sectors and in society.

Blockchain evolved as the formal name for tracking the database underlying the cryptocurrency, called as a bitcoin, but now it is referred as
distributed ledger with software algorithms to record transactions as a chain of blocks with trustworthiness and anonymity
Decentralized consensus mechanism makes transactions immutable and updatable only through consensus among peers over the network.

Principles
Cryptography Peer-to-peer networking Game Theory Decentralization

Features Smart Contracts Distributed Ledger Technology

Source:
C. Laroiya, D. Saxena, and C. Komalavalli, “Applications of Blockchain Technology,” in Handbook of Research on Blockchain Technology, Elsevier, 2020, pp. 213–243. DOI: https://doi.org/10.1016/B978-0-12-819816-2.00009-5.
J. Golosova and A. Romanovs, "The Advantages and Disadvantages of the Blockchain Technology," 2018 IEEE 6th Workshop on Advances in Information, Electronic and Electrical Engineering (AIEEE), 2018, pp. 1-6, DOI: 10.1109/AIEEE.2018.8592253.
 What is Blockchain?

Source:
C. Laroiya, D. Saxena, and C. Komalavalli, “Applications of Blockchain Technology,” in Handbook of Research on Blockchain Technology, Elsevier, 2020, pp. 213–243. DOI: https://doi.org/10.1016/B978-0-12-819816-2.00009-5.
J. Golosova and A. Romanovs, "The Advantages and Disadvantages of the Blockchain Technology," 2018 IEEE 6th Workshop on Advances in Information, Electronic and Electrical Engineering (AIEEE), 2018, pp. 1-6, DOI: 10.1109/AIEEE.2018.8592253.
 Advantages of Blockchain Technology (BCT)

Transparency & Trust Security Fast Transaction

Each action is recorded to the Blockchain and Blockchain promises security, because of Traditional payment system involving third
the data of records are available to every encrypted data. Each blocks in blockchain party directs every document to the clearing
participant of this Blockchain and cannot be database created hash based on data in the last house for approval which causes down time in
changed or deleted. All can keep an eye to block. A hash is a function that meets the the transaction. The usage of the Blockchain
every transaction because of shared distributed encrypted demands needed to solve for a technology helps to reduce the time for the
ledger to all of participants in the transaction. blockchain computation. processing and initialing to many times – from
The results of this recording give the approximately 3 days to several minutes or
Blockchain's transparency, immutability and even seconds
trustworthy.

Source:
C. Laroiya, D. Saxena, and C. Komalavalli, “Applications of Blockchain Technology,” in Handbook of Research on Blockchain Technology, Elsevier, 2020, pp. 213–243. DOI: https://doi.org/10.1016/B978-0-12-819816-2.00009-5.
J. Golosova and A. Romanovs, "The Advantages and Disadvantages of the Blockchain Technology," 2018 IEEE 6th Workshop on Advances in Information, Electronic and Electrical Engineering (AIEEE), 2018, pp. 1-6, DOI: 10.1109/AIEEE.2018.8592253.
 Disadvantages of Blockchain Technology (BCT)

High Power Consumption & Costs Complex Development

Blockchain technology needs to keep a real- The development of blockchain is very complex.
time ledger and needs to solve When the old software's chain update into the
encryption/cryptographic security for new software's chain, the old chain will not
transaction validation, which is requires high accept the transaction since the old chains are
computing resources so that it requires high based on the history of the old software. So the
power consumption as well. Because of high chains must meet he criteria of the new
power consumption, then it costs a lot too. software.

for example, when the old software stored 1MB

of chains, and updated into new software which
has 500Kb size, the 500Kb chains from the old
software will not be valid. which also makes the
amount of the blockchain decrease.

Source:
J. Golosova and A. Romanovs, "The Advantages and Disadvantages of the Blockchain Technology," 2018 IEEE 6th Workshop on Advances in Information, Electronic and Electrical Engineering (AIEEE), 2018, pp. 1-6, DOI: 10.1109/AIEEE.2018.8592253
Cristina Criddle, "Bitcoin consumes 'more electricity than Argentina'", BBC News report published on February 10, 2021, https://www.bbc.com/news/technology-56012952.
 What is Bitcoin?
Bitcoin Risks
Bitcoin basically is a computer file stored in a digital wallet app. It becomes a currency because the The volatile and fluctuating market
complex computing power that needs weeks with little success to get some coins worth some Cyber theft
money for some one. Until right now it can beuse for peer-to-peer technology to facilitate instant Fraud
payments No regulation
Transaction Process Technology reliance
Limited Use
Currency or investment opportunity
Financial loss

Legality in Indonesia
For medium of exchange/legal tender,
it's still prohibited.
Cryptocurrency asset commodity
trading, it's legal under BAPPEBTI
(Commodity Futures Trading
Regulatory Agency)

Source:
https://www.bitpanda.com/academy/en/lessons/what-is-bitcoin-mining-and-how-does-mining-work/
Many applications of Blockchain Technology

Identity
Financial Service
Management

Insurance Music Industry

BLOCKCHAIN
Healthcare Supply Chain

Voting Real Estate

Application in Financial Service & Real Estate:
Smart Contract can automate programmed decision-making
Programmed Decision Making Smart contracts mean automated
decision-making in business
Programmed decision making is a routine, Smart contracts are a specific blocks of data
virtually automatic process. Programmed on the blockchain that control the transfer of
decisions are decisions that have been made assets between parties under a predefined
so many times in the past that managers have condition. Smart contracts can facilitate, verify
developed rules or guidelines to be applied and enforce the outcomes of that agreement if
when certain situations inevitably occur. terms and conditions are met.
Whether it’s money, shares or property, smart
contracts can make transactions
automatically, operating on trusted data and
eliminating the need for a third party.
Source:
https://www.kaspersky.com/blog/secure-futures-magazine/permissioned-blockchain/35661/
Smart contracts drawback
Since it's automated with specific guidelines,
the decision will be deprived of preferences,
inclinations, uncertainty and other human
attributes.
An example might be a payment reconciliation
process – which would be directed by a
manager and delivered by an accountant. With
Blockchain, reconciliation can be done in an
instant by any participant. Blockchain can't
delay purchasing a package if you want to wait
for the supplier’s payment. It will proceed the
transaction, if the purchasing criteria
decisions are met.
Application in Supply Chain:
Vertical Integration is no longer relevant with Blockchain Technology
Vertical Integration With Blockchain, vertical integration
is no longer relevant
Corporate-Level strategies to expand Before blockchains, companies may use
company’s operations either backward into an vertical integration to create additional value.
industry that produces inputs for its products But it has problems, large conglomerate firms
or forward into an industry that uses, struggle with the challenges of specialisation,
distributes, or sells its products. and size tends to make firms less efficient.
Stages in a Vertical Value Chain
Blockchains can work to coordinate supply
chains without the need of vertical integration.
The blockchain provides the managerial
service that coordinates each different firm in
the supply chain. Each firm in the supply chain
get the benefits of vertical integration through
a network rather than a hierarchy.
Source:
https://medium.com/@herc_token/transforming-the-supply-chain-landscape-with-blockchain-a58d8e61b686
https://medium.com/cryptoeconomics-australia/outsourcing-vertical-integration-introducing-the-v-form-network-78e1aa93a814
Example: blockchain-based supply
chain in automotive industry
The automotive industry is highly regulated
and has cross-country regulators and have
multiple network participants. A blockchain-
based solution can help keep track of the
exact record of each and every part that went
into an automobile, manufacturing and
transportation history, and sales history, all
while providing regulators the information
they need to ensure compliance.
Many supply chains have a dominant entity. In
such a case, the manufacturer can enforce a
blockchain-based supply chain
implementation that everyone else in the
chain will have to adopt.
 Solving issues in Indonesia with Blockchain :
Certification authentication
Problems
Fake degree business has been practiced
for years in Indonesia. To eradicate this,
Education Ministry have established task
force & preventive actions. They also
created a national Online Degree
Verification System (Sivil) and encouraged
all universities to have its degrees
registered. However high amount of
reports regarding fake or illegal degrees
are still rampant.
Source:
Various source
Solution
Education and certification institution can
use smart contracts. Certification can be
written securely so it could not be deleted
or changed thus authentication is
guaranteed. Sharing them with employers
also becomes transparent, easy and faster.
There is no need to contact or universities
one by one.
 Solving issues in Indonesia with Blockchain :
Identity Protection
Problems
Despite of e-KTP (Electronic Resident
Identity) system implementation in
Indonesia, there's still have chances of data
leakage and misuse. There's some case of
data leakage and misuse, such as 2.3 mio
of resident data leaked from KPU (General
Elections Commission) or identity theft
which experienced by senior journalists,
Ilham Bintang.
Source:
Various source
Solution
Decentralized digital database with
Distributed Ledger Technology and data
tamper protection with strong
cryptographic hash method will improve
data security. Smart contract also used for
verification & authentification of personal
data access. It will prevent from data
breach and misuse.
 Solving issues in Indonesia with Blockchain :
Donation transparency

Problems
With the popularity of fund rising sites such
as KitaBisa.com and the use of social media
to raise funds for donations. Many cases of
charity fraud comes up in the recent years.
Donators & donations platform rely on fund
requestor for updates and the validity is
not always reliable.
Solution
With Blockchain, donor of funds can track
their donations outcome in real time. This
would resulted in transparency and
credibility to charity donations.

Source:
Various source
 Solving issues in Indonesia with Blockchain:
Illegal fishing

Problems Solution
As a maritime country, Indonesia has great Blockchain can track the journey of a single
potential to maximize resources in the fish, recording information regarding
marine and fisheries sector. Unfortunately, where it was caught and how it was
this potential is not maximized due to processed. Once that information enters
various illegal, unreported and unregulated the system, it is verified by a network of
fishing. According to the CEO of Indonesia thousands of computers, making it
Ocean Justice Initiative (IOJI), at least impossible to manipulate or falsify. By
Indonesia suffered losses of up to $4 billion tracking the fish from the moment it’s
per year due to illegal fishing practices. caught, blockchain would make it
impossible for any illegal fish to enter the
market.

Source:
https://www.weforum.org/agenda/2020/02/blockchain-tuna-sustainability-fisheries-food-security/
IV

Thank you
Kelompok 4

Diva Tertia Almira

Fauzian Rizqi Pramanda
Muhammad Bagas Dewantoro
Muhammad Madaniy Fadlulhaq
Nisrina Miranda A.