A

Technical Seminar Report

On

“BLOCKCHAIN TECHNOLGY (BEYOND BITCOIN)”

Submitted to

JAWAHARLAL NEHRU TECHNOLOGICAL UNIVERSITYHYDERABAD

In partial fulfillment of the requirement for the award of Degree of

BACHELOR OF TECHNOLOGY

In

“COMPUTER SCIENCE AND ENGINEERING”

By

Name: N MANJU NAGESHWARI (20BH5A0509)

Under the guidance of

Dr.Y.SRINIVAS, M.Tech Ph.D

Asst, Prof., Dept. of CSE

Department of Computer Science and Engineering

St Mary’s Engineering College
(Affilitated to JNTU Hyderabad ,Approved by AICTE, Accredited by NAAC)Near
Romoji Film City, Deshmukhi(v),Yadadri Bhuvanagiri Dist-508 284
 St Mary’s Engineering College
(Affiliated to JNTU Hyderabad, Approved by AICTE, Accredited by NAAC)
Near Ramoji Film City, Deshmukhi(v), Yadadri Bhuvanagiri Dist-508 284

This is to certify that the Technical Seminar report entitled “BLOCKCHAIN TECHNOLOGY
(BEYOND BITCOIN)” which is being submitted by N. MANJU NAGESHWARI
[20BH5A0509], in partial fulfillment for the award of the Degree of BACHELOR OF
TECHNOLOGY in COMPUTER SCIENCE AND ENGINEERING of JAWARHARLAL
NEHRU TECHNOLOGICAL UNVIERSITY, HYDERABAD, is a record
of the bonafide work carried out by him/ her under my guidance.

INTERNAL GUIDE. HEAD OF THE DEPARTMENT

Dr.Y.SRINIVAS, M.Tech, Ph.d K HARISH KUMAR ,M.Tech, (Ph.d)

Asst,Professor, Dept. of CSE Asst, Professor, Dept. of CSE

SI. CONTENTS PAGE NO.
NO.
ABSTRACT 1
1 CHAPTER-1 2-4
1.1 INTODUCTION 2
1.2 EXISTING SYSTEM 3
1.3 PROPOSED SYSTEM 4
2 CHAPTER-2 5-15

2.1 EVOLUTION OF BLOCKCHAIN 5

2.2 STRUCTURE OF BLOCKCHAIN 6-7
2.3 WORKING OF BLOCKCHAIN 8
2.4 ORDER OF TRANSACTION 9
2.5 UNORDERED TRANSACTION 9-10
2.6 CLASSIFICATION OF BLOCKCHAIN 11
2.7 PROPERTIES OF BLOCKCHAIN 12
2.8 ALGORITHM USED IN BLOCKCHAIN 12-14
2.9 SMART CONTRACTS 15
3 CHAPTER-3 16-19

3.0 BEYOND BITCOIN 16-19

4 CHAPTER-4 20-25

4.1 ADVANTAGES 20
4.2 DISADVANTAGES 20
4.3 APPLICATIONS 20-22
4.4 THE ATTACKS AND PROBLEM OF THE BLOCKCHAIN 23
4.5 BLOCKCHAIN GROWING POPULARITY 24-25
5 CONCLUSION 26
BIBILOGRAPHY 27
 FIGURE CONTENTS

FIG. No FIG NAME PAGE NO.

FIG 1.1 DECENTRALIZED LEDGER 02
FIG 1.2 TRANSPARENCY 03
FIG 1.3 BLOCKCHAIN 04
FIG 2.1 EVOLUTION OF BLOCKCHAIN 05
FIG 2.2 STRUCTURE OF BLOCKCHAIN 06
FIG 2.3 MERKLE TREE 07
FIG 2.4 TRANSACTION USING BLOCKCHAIN TECHNOLOGY 08
DOUBLE SPENDING DUE TO PROPAGATION DELAYS IN
FIG 2.5 09
PEER-TO-PEER NETWORK
FIG 2.6 UNORDERED TRANSACTION 10
FIG 2.7 STRUCTURE OF SMART CONTRACTS 15
FIG 3.1 CRYPTOCURRENCY 16
FIG 3.2 BIT COIN 16
FIG 3.3 ETHEREUM COIN 17
FIG 3.4 RIPPLE COIN 18
FIG 3.5 LITE COIN 19
FIG 3.6 DASH COIN 19
FIG 4.1 MARKET SIZE OF BLOCKCHAIN TECHNOLOGY GRAPH 24
FIG 4.2 COINS MINED BY REGION GRAPH 24
BLOCKCHAIN TECHNOLOGY MARKET IN DIFFERENT
FIG 4.3 25
CLOUD SECTORS GRAPH
FIG 4.4 BLOCKCHAIN WALLET USERS GRAPH 25
 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. Once entered, information can never be erased. The blockchain contains a certainand
verifiable record of every single transaction ever made. Bitcoin, the decentralized peer-to-peer
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 non-financial
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 opportunitiesin
this disruptive technology, and the revolution in this space has just begun. This white paper
describes blockchain technology and some compelling specific applications in both financial and
non-financial sector. We then look at the challenges ahead and business opportunities in this
fundamental technology that is all set to revolutionize our digital world.

1
 CHAPTER-1
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.

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.

Fig 1.1 Decentralized Ledger

2
 EXISTING SYSTEM

System management technology is an existing database -based donation system. System

administration is centralized system using paper ledger in offline system where as in online
system centralized system is using with central server.

In offline systems no transparency at all where as in online systems provide transparency but
lack confidence in transparency.

When come to privacy in offline systems no open records on the internet. Where as in online
systems opened for others to view transaction history or locked for nobody to see.

Integrity is not guaranteed at all in offline systems.it is a risk that data will be already by third
parties. There is no security in offline systems. Where as in online systems the variable security
provided by security system in the system.

Fig 1.2 Transparency

3
 PROPOSED SYSTEM

Now a days, system management technology use blockchain. Decentralized system of

p2p format is used for system administration. Transactions can be browsed and transparency
reliability is assured by agreement algorithm.

Privacy is protected because nobody knows where the transaction originated. Data cannot
be altered by third party due to agreement algorithm. Very secure with user-to-user in blockchain
system.

Fig 1.3 Blockchain

4
 CHAPTER-2

EVOLUTION OF BLOCKCHAIN:

Fig 2.1 Evolution Of Blockchain

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.

5
STRUCTURE OF BLOCKCHAIN:

The Blockchain consists of linear sequence blocks, which are added to chain with the regular
intervals. The information in the blocks depends on the Blockchain network. but the timestamp,
transaction, and hash are existed in all the Blockchain variants. Each block contains the
cryptographic hash of the previous block.
All hash's information is generated automatically, it means that it is not possible to change
any information in the hash.

• In this case, each next block amplifies the verification of the previous block and the
secure of all Blockchain.
• The more blocks in the chain the safer and more reliable the Blockchain.

Fig 2.1 Structure Of Blockchain

6
 Fig 2.2 Merkle Tree

The merkle tree is a binary tree with each leaf node labelled with the hash of one transaction
stored in the block body, and the non-leaf nodes labelled with the concatenation of the hash
of its child nodes. Merkle root, i.e.. the root hash of a Merkle tree, is used to reduce the
efforts to verify the transactions in a block. Since a tiny change in one transaction can
produce a significantly different ↳ Merkle root, the verification can be completed by simply
comparing the Merkle root instead of verifying all the transactions in the block.

7
WORKING OF BLOCKCHAIN:
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.

Fig 2.3 Transaction Using Blockchain Technology

8
ORDER OF TRANSACTION:
1. The order of these transactions that are broadcast to every other node in the Bitcoin
peer-to-peer network.

2. The transactions do not come in order in which they are generated.

3. 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.

4. 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.

FIG 2.4 Double Spending Due To Propagation Delays In Peer-To-Peer Network

UNORDERED TRANSACTION:

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.

9
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. Howdoes
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 canarrive at
different orders at different points in the network.

Bitcoin solves this problem by introducing a mathematical puzzle: each block will be acceptedin
the blockchain provided it contains an answer to a very special mathematical problem. Thisis
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 canbe done by executing a single hash.

Fig 2.5 Unordered Transaction

10
CLASSIFICATION OF BLOCKCHAIN:

Classification of blockchain is based on two types,

1. Classification based on classes

2. Classification based on processing of transaction

Classification based on classes:

NAME OF THE CLASS DEFINITION

A Blockchain public Does not have any restrictions on reading of the blocks and
on submitting of the transactions
A Blockchain private Has limited to a predefined list of users of the direct access
to the blocks and submitting transactions
A permissionless Blockchain Does not have any restrictions for the users which are
eligible to create the blocks of transactions
A permissioned Blockchain Has the list of the predefined users which are eligible to
performed to process the transactions

Classification based on processing of transaction:

ACCESS THE PROCESSING OF THE TRANSACTIONS

TO THE
DATA PERMISSIONED PERMISSIONLESS

Public Proprietary colored coins protocols Existing cryptocurrencies

(Bitcoins)
Regulated The direct access to the reading and creating of the Colored coins protocols
transactions for clients and regulators (limited) (Colored Coins Protocol) which
can limit to creating of the
transactions

Private The direct access to the data of the Blockchain is It is not possible to apply
limited and the advantages of the Blockchain are
partially lost

11
PROPERTIES OF BLOCKCHAIN:
The properties of the blockchain has different parameters, which calculated, if the following
properties are known:

• Header size

• transaction size

• nodes in the system

• mining power per node

• bandwidth (b(I,j))

• Block size

• difficulty crypto puzzle.

ALGORITHM USED IN BLOCKCHAIN:

A consensus algorithm is a procedure through which all the peers of the Blockchain network
reach a common agreement about the present state of the distributed ledger. The consensus
algorithms of blockchain are proof of work (POW), proof of stake (POS), ripple protocol
consensus algorithm (RPCA), delegated proof of stake (DPOS), stellar consensus protocol
(SCP), and proof of importance (POI).

Blockchain Consensus algorithms ensure each new block added to the network is the only
version of the truth, which is agreed by all the nodes in a distributed/decentralized computing
network.Blockchain is a distributed decentralised network that aims to give immutability and
security of data. Without a central authority to validate and verify the transactions, each
transaction in a Blockchain network is considered to be truly secure and validated.

As blockchain functions in a decentralised manner and records large volume transactions in real-
time, there may be the complexity of what is the truth is. The key is to get consensus one way or
another, or else malicious things like double-spending attacks can occur. This is where the
consensus algorithm comes in. A consensus algorithm is a mechanism in computer scienceused
to establish agreement on a single data value across distributed processes or systems.

12
A consensus algorithm is a protocol through which all the parties of the blockchain network
come to a common agreement (consensus) on the present data state of the ledger and be able to
trust unknown peers in a distributed computing environment.

1. Proof Of Work (PoW)

concept was first introduced in 1993 by Cynthia Dwork and Moni Naor, and later re-introduced
by Satoshi Nakamoto in the Bitcoin whitepaper in 2008. In a PoW system, blockchain validators
must take data from a block header as an input, and continuously run it through a cryptographic
hash function. Validators hash slight variations of the input data by including anarbitrary number
called a nonce every time the input data is run through the cryptographic hashfunction. PoW needs
high levels of electricity of processing power to decide what data gets added to the next block in
a blockchain. Specialised computers called ASICs are required to compute complex
mathematical problems needed for the PoW system.

2. Proof Of Stake (PoS)

The PoS consensus algorithm was created in 2011 as an alternative to PoW. Although PoS and
PoW have similar objectives, they present some fundamental differences and features, especially
during the validation of new blocks on the blockchain network. The Proof of Stake (PoS)
consensus algorithm differs with the PoW mining consensus with a mechanism where blocks
are validated based on the stake of the network participants. Here, unlike running hash functions,
validators stake resources primarily in the form of digital money or tokens. The validator of
every block is then randomly selected from the stakeholders based on the amount of
Ccomputational power allocated.

3. Delegated Proof-of-Stake (DPoS)

Conceptualised by Daniel Larimer, delegated Proof-of-Stake (DpoS) is an another type

consensus algorithm, which is based on voting systems where “delegates” vote for their favourite
validators to help in the consensus state of new blocks. These validators will also beresponsible
for validating transactions, maintaining the blockchain network, and will get rewarded in return
in doing so with transaction fees.

13
Also, each voter’s power is proportional to the size of the stake in the network. Blockchain
projects like EOS, Bitshares, Steem, Tezos, etc. use DpoS consensus algorithm for validating
transactions.

4. Proof of Elapsed Time (PoET)

PoET consensus system was developed by Intel to solve the computing challenge of “random
leader election.” It was released as part of the Software Guard Extensions (SGX) programming
reference manual. PoET is now utilised by many private blockchains, including Hyperledger
Sawtooth as it relies on randomised timer system for network participants rather than using
mining hardware as in the case of Proof of Work (PoW). Each participating blockchain node in
the network is needed to wait for a randomly chosen period, and whoever with finished time
wins the new block and validates it.

5. Proof of Authority (PoA)

Proof of Authority (PoA) is a consensus algorithm type based on the reputation of trusted parties
in a blockchain network. It is considered an efficient mechanism for private blockchainsand was
conceptualised by Ethereum co-founder and former CTO Gavin Wood in 2017. PoA consensus
algorithm is based on the value of identities within a network- and in a system block,validators do
not stake resources but their own identities and reputation. So, PoA blockchain networks are
secured by the validating nodes that are arbitrarily chosen as trustworthy parties.

The Proof of Authority model works on a fixed number of block validators, making it an easily
scalable blockchain system because transactions are checked by already-approved network
participants. PoA consensus algorithm can be utilised in applications such as supply chains or
trade networks because the real identities of nodes are known and trusted.

14
SMART CONTRACTS:

• That was invented in year 1994 by Nick Szabo. The smart contract is the script which
is stored in the Blockchain.
• The smart contract has the unique address, set of executable functions and state
variables.
• The user launches the smart contract by addressing the transaction to it.
• After that, the smart contract is automatically and independently performed in the
established order on each node of the chain, depending on the data, which contained in
the running transaction.

Fig 2.7 Structure Of Smart Contracts

15
 CHAPTER -3
BEYOND BITCOIN

Fig 3.1 Cryptocurrency

1. BITCOIN

Bitcoin is the world’s first cryptocurrency which works on a completely decentralized

network known as the blockchain. The blockchain network consists a link of blocks that
are secured using cryptography and record all the transactions. Bitcoin was first
presented to the world in 2009 by an anonymous identity known as Satoshi Nakamoto.
As Bitcoin works on a decentralized network, it is completely free from the involvement
of third-party financial institutions or central banks. The Bitcoin blockchain facilitates
instant peer-to-peer transactions at minimum transactions fees required to maintain the
network. The total number of Bitcoins is fixed at 21 million with its smallest unit being
referred to as Satoshi. Each Satoshi represents a hundred millionth part of Bitcoin which
means that 100,000,000 Santoshi = 1 BTC. The minersalso validate all transactions on
the Bitcoin network as well as look after the network security. Bitcoin can be exchanged
with fiat currencies or other digital currencies.

Fig 3.2 Bit Coin

16
2. ETHEREUM COIN
Ethereum is basically an open software platform based on the blockchain
technology which allows developers to building several decentralized applications called
DAPPS. Ethereum is also called as a distributed public blockchain network thatfocuses
on running the programmingcode of any application. Ethereum was firstcreated in
2013 by founder Vitalik Buterin and Ether is the cryptocurrency that is generated on the
Ethereum platform.

The Ether tokens can be used to make payments by transferring them between accountsas
well as to compensate the mining nodes for the computations performed on the
Ethereumblockchain.

The Ethereum platform has been designed in a way to allow developers for the creationof
smart contracts. The smart contract is basically a computer code or script which can
automatically execute tasks when certain conditions are met. This tasks can include
anything like an exchange of content, money, property, or anything of value.

‘Gas’ is an internal pricing for running a contract or a transaction on Ethereum network.

The value of one Gas is one-millionth of an Ether.

Fig 3.3 Ethereum Coin

17
3. RIPPLECOIN

Ripple is a digital payment or a remittance network created in order to establish an instant

transfer of funds across the globe. Ripple operates on an open-source peer-to- peer
decentralized platform that records all the transactions in the network. The native
cryptocurrency of the Ripple network is also called as Ripple and abbreviated by XRP.

Ripple was co-founded by Jed McCaleb and Chris Larsen and was released in 2012.
Ripple facilitates the seamless transfer of money by connecting banks, payment
providers, corporates and digital asset exchanges through the RippleNet. The Ripple
XRP tokens provide banks and other financial institutions an on-demand solution to
sources liquidity for instant global transfers. As the Ripple network is based on
blockchain technology it allows for low-cost global funds transfers just in a matter of
few seconds. The Ripple’s distributed ledger XRP makes use of a consensus protocol
that allows for payments and exchanges to take place in a distributed process.

Fig 3.4 Ripple Coin

4. LITE COIN

It created in 2011 by former Google engineer, Charles Lee, Litecoin offers a faster
mining block generation time and a much increased number of coins to Bitcoin. Litecoin
(LTC) is a digital currency which operates on a peer-to-peer basis andfacilitates lightning
fast currency exchanges and payments across the globe. Thesoftware is open source,
allowing for the creation and exchange of coins based on a cryptographic protocol,
without being managed by any centralized authority. Rank 11 in all over the
cryptocurrency.

18
 Fig 3.5 Lite Coin

5. DASH COIN

Dash (DASH) is a peer-to-peer cryptocurrency service which focuses specifically on

offering rapid transaction speeds within the payment industry. Dash aims to provide a
user-friendly service that appeals to non-technical users, while solving the transaction
speed issues suffered by Bitcoin.The Dash project was initially released in 2014, under
the name Xcoin by founder Evan Duffield. A series of rebrands saw the company
become Darkcoin in 2015, followed by a switch to Dash in the same year. Dash is a
portmanteau of ‘Digital Cash’, and reflects the easy and simple nature of thecompany’s
business plans.
Dash aims to facilitate quick, easy transactions for the average person. Dash is
developing a method for dealing with contracts by name, as opposed to addresses in
cryptographic form, enabling single click purchases and access from mobile devices
and websites. Dash provides a PrivateSend function which allows for untraceable
payments. Their InstandSend service solves the double-spending problem of Bitcoin
and allows for near-instant transfers.

Fig 3.6 Dash Coin

19
 CHAPTER-4

ADVANTAGES
• it is not necessary to work with the third-party organization or with the central
administrator.

• The results of this recording give the Blockchain's transparency, immutability and
trusty.

• The Blockchain designs in a way that it can show any problems and correct them if it
is necessary. This advantage makes the Blockchain technology traceability

DISADVANTAGES
• The consumption of power is needed for keeping a real-time ledger. Every time the new
node is created and in the same time it communicates with each and other node. In this
way the transparency is created.
• The signature verification is the challenge of the Blockchain, because each transaction
must be signed with cryptographic scheme.

• The high costs are a big disadvantage of the Blockchain. The average cost of the
transaction is between 75 and 160 dollars and most of it covers by the energy
consumption. And the high initial capital costs of the blockchain.

APPLICATIONS:

There are 2 types of applications

1. Financial applications
2. Non-Financial applications

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1. FINANCIAL APPLICATIONS:

i. 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 exchangeis
inefficient and slow due to involvement of multiple 3rd parties.

Medici: 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.

Block stream: Blockstream is an open source project with focus on sidechains--interoperable

blockchains--to avoid fragmentation, security and other issues related to alternative crypto-
currencies.

Coin setter: Coinsetter 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: Augur is a decentralized prediction market that will allow users to buy and sell sharesin
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”.

Bit shares: 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.

21
 ii. 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.

Everledger: Everledger 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.

2. NON-FINANCIAL APPLICATIONS:

i. 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.

ii. 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 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.

iii. 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 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.

22
 iv. Internet Applications: Namecoin is an alternative blockchain technology (with small
variations) that is used to implement decentralized version of Domain Name Server
(DNS) that is resilient to censorship. 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.

THE ATTACKS AND PROBLEMS OF THE BLOCKCHAIN:

The Blockchain can be attacked by the different threats, which are connecting with the PoW and
PoS protocols. Most of them are almost impossible.
• Attack of 51%: It will happen when two miners are calculating the hash of the block at
the same time and get the same results. In this case the Blockchain will split and as the
result, users have two different chains, and both are considered true.
• Double-spending: Princip of this attack is the same with the previous attack, but here can
be used the split of the chain to spend the money again.
• Sybil’s attack: Its possible when one node accepts several essences, because the network
can’t authentically distinguish the physical machines. The Sybil’s attack can help to fill
the Blockchain with users under its control. It can lead to the previous twoattacks and
the ability to see all transactions with special programs.
• DDos’s attack: The attack consists of a large amount of the similar requests. There is the
protection in the DDos’s attack – size of the block up to 1 MB, size of each script up to
10000 bytes, up to 20000 of the signatures can check and maximums of the multiple
signature is 20 keys.
• Cracking of the cryptographic: It is possible if use the quantum algorithms such as
‘Shora’ which can break the RSA encryption. The scientists work on thecryptographical
algorithms, which based on the hash functions.

23
BLOCKCHAIN GROWING POPULARITY

Fig 4.1 Market Size Of Blockchain Technology Graph

Fig 4.2 Coins Mined By Region Graph

24
Fig 4.3 Blockchain Technology Market In Different

Cloud Sectors Graph

Fig 4.3 Blockchain Wallet Users Graph

25
 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 its implementation islittle 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 havea
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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