INNOVATIVE PROJECT

MCA-215

KNOW YOUR CUSTOMER(KYC)

USING BLOCKCHAIN

TEAM MEMBERS (G29):

NITIN PATEL (52121105)
MANAV CHAUHAN (52111109)
ASHISH KUMAR (52122109)

MENTOR:
Dr. MUNISH MEHTA
 KNOW YOUR CUSTOMER (KYC) USING BLOCKCHAIN

What is BLOCKCHAIN?
Blockchain is a shared, immutable ledger that facilitates the process of
recording transactions and tracking assets in a business network.
Blockchain is also a database. But the data stored inside is not only
your node/system. It is stored in a peer-to-peer network, which means
every node on the network have a copy of the whole database. So,
every time a new data is entered into this database, that data is
synced into the whole node and goes to every node.
The Blockchain uses Smart Contracts, which are designed by the
programmer. Any transactions in the Blockchain (addition, removal or
modification of data is referred as transaction in Blockchain) are
completed if and only if it meets the requirement of the Smart
Contract.
The smart contract executes when a condition is triggered

How it Works?
 KNOW YOUR CUSTOMER (KYC) USING BLOCKCHAIN

Each Block in Blockchain contains 3 components.

1. Hash of the Block itself.
2. Data contained in it.
3. Hash of Previous Block.
We can compare hash to a fingerprint,
it identifies a block and all of its contents and it’s always unique,
just as a fingerprint. Hash of the previous block creates a chain of
blocks.

How is Blockchain Safe?

Blockchain is also a database, and the data is synced to the whole
network. So, if someone wants to make change in the database,
then they will have to hack all the computers in that node to hack a
single one of them, which is impossible task, therefore, we can
consider it as a unhackable and immutable database.

The Hash of the current Block is a combination of the Data

contained in it, and the Hash of the previous block.
 KNOW YOUR CUSTOMER (KYC) USING BLOCKCHAIN

So, if anyone try to change the data of any of the block in the
blockchain, it will change the hash of the block, and this will crash
the system on that node, hence it is highly reliable and cannot be
hacked or modified without permissions.

Uses of Blockchain
Blockchain is a newly emerging technology that has gained
popularity in a very little time interval. It is considered that
Blockchain has only one application like that in Cryptocurrency.
But Blockchain has its own applications in fields where high security
is required. Many MNCs (like Microsoft, The World Bank, Morgan
Stanley, Amazon, Tech Mahindra, etc) are Opting blockchain for
their new projects and securing their database.
Some of the real-life applications of Blockchain is:
1. Financial exchanges (highly reliable and safe transactions)
2. E-Voting Systems (for a secured and trustable process of voting)
3. Real Estate (history of owners or blacklisted property info are saved)
4. In Hospitals (to store medical history of patients)
5. Customer KYC (decentralized Customer KYC services)
 KNOW YOUR CUSTOMER (KYC) USING BLOCKCHAIN

Project Description
Know Your Customer (KYC) checks are currently an extremely time
consuming and costly affair. Organizations have to spend millions
of dollars every year to keep up with KYC regulations or risk being
fined heavily. Moreover, there is mostly a third-party organization
involved to carry this KYC process, which also rises the questions to
the security and reliability of the system.
Through the KYC chain we aim to simplify this process to a great
extent. It eliminates the redundant KYC checks that banks currently
perform by maintaining a common secure database in a block-
chain. The nature of a block-chain ensures that unauthorized
changes to the data are automatically invalidated. The proof-of-
reputation concept makes the verification process more robust.
How Blockchain improves the KYC Process?
Since, Blockchain is a decentralized database, which is highly secure
and immutable; We can put the Customer Details on the
decentralized database. This will make the process handier and
more reliable.
Various business and financial institutions to use this process to
keep information for validation and authentication of their users,
employees etc.
But there are two major loopholes in this process:
a) There is some middle-men involved, which questions the security
and reliability of the data.
 KNOW YOUR CUSTOMER (KYC) USING BLOCKCHAIN

b) The customer has to undergo the same KYC process as many

times as he/she is willing to join or use other platforms or
institutions.
How will we target these problems?
We will develop an application in which the customer will be
provided with a single ‘KYC ID’ when he undergoes the process for
the first time. After that, whenever he/she is required to sign up
with any new Organization, they will provide their KYC ID to them.
The Organization will request the User the access for the
documents required by them (The documents of the customer are
pre-verified at the first organization). Thus, in no time, the details
will be verified and redundancy of the data is minimized along with
increased security.
Our system will be using World's leading Blockchain Technology for
this purpose, which will give us a Distributed Environment,
Transparency to the user, No Third-Party interference, thus
increasing its security.
Implementing KYC using Blockchain:
In the traditional KYC system, each organization will conduct its
identity check i.e., each user is checked individually by an individual
organization or government structure. Therefore, lot of time,
efforts and resources are wasted in verifying each identity from
scratch.
The Blockchain Architecture and the DLT allow us to collect
information from various service providers into one
cryptographically secure and unchangeable database that does not
need a third party to verify the authenticity of the knowledge. It
 KNOW YOUR CUSTOMER (KYC) USING BLOCKCHAIN

makes it possible to form a system where the user will only need to
undergo the KYC procedure once to verify his/her identity.
The Process will be as follows:
a) The user will submit documents in any one of the Organisation
he is willing to join with.
b) Individual participants are responsible for collecting personal
data (banks, government agencies, companies, or users
themselves) and store in a decentralized network.
c) The Organization will verify the Identity, and once they fulfil the
requirements of the Smart Contracts, they will put the data of
the user on the Blockchain Platform, which can be accessed by
Bank, Govt. Agencies or any other participating and verified
organization.
d) The system will monitor changes and updating of the user data,
and if someone breaks the rules, it will become known to all
parties.
e) A ‘KYC ID’ will be issued for the user, which can be used for
future references.
f) The access to user data will be based solely on its consent. The
user must log in with cryptocurrency transactions i.e., Use the
private key to initiate the information exchange operation.
Technologies that will be Required:
a) Combination of HTML, CSS and JAVASCRIPT to design the Front-
end of the application.
b) Ethereum or any other Blockchain suitable for the project.
c) In case of Ethereum, Ethereum Blockchain network, also called
Ethereum Virtual Machine is required to host the Smart
Contracts.
 KNOW YOUR CUSTOMER (KYC) USING BLOCKCHAIN

d) GANACHE: - It is a developing network and tool that helps to set

up local Ethereum network.
e) TRUFFLE: - It sets up Blockchain coding environment.
f) Web3 Library: - through Web3 library, the front-end can
communicate with the blockchain network directly.
g) META MASK: - It is a Gateway or Wallet, through which the
Ethereum Transactions will take place.

NOTE: It is an estimated list of tools and technologies that will be

required. Any modifications required will be made in the future.