Engineering Economy and Blockchain Technology
Anushka Agarwal
Dept. of CSE
RV College of Engineering
Bangalore, India
email: anushkaagarwal.cs20@rvce.edu.in
Meeth Jain
Dept. of EIE
RV College of Engineering
Bangalore, India
email: meethjain.ei20@rvce.edu.in
Abstract— Engineering economy is a discipline that plays a
crucial role in decision-making in engineering projects.
Blockchain technology, on the other hand, is a distributed
ledger technology that has the potential to revolutionise various
industries, including engineering. This paper reviews the
literature on the intersection of engineering economy and
blockchain technology, with a focus on opportunities and
challenges. The paper gives an overview of engineering
economy and its key principles. The paper also examines the
potential benefits of using blockchain technology in the
engineering economy, such as improved transparency,
increased efficiency, and reduced risk of fraud.
Keywords— Engineering Economy, Blockchain, history,
evolution, global, impact, challenges.
I. INTRODUCTION
1.1 ENGINEERING ECONOMY
As it helps them to choose the optimal course of action
while planning, developing, and executing engineering
projects, engineering economy is a crucial tool for
engineers. It gives engineers the know-how and abilities
necessary to assess the financial effects of their projects and
make wise judgements based on economic facts.
Engineering economy is a branch of engineering that deals
with the principles of economic analysis in engineering
projects. Making decisions that maximise economic benefits
while limiting costs requires the application of economic
ideas and methodologies to assess the economic viability of
engineering projects.
The design and development of new products, the building
of structures and infrastructure, and the optimization of
industrial processes are just a few engineering projects that
can benefit from the use of engineering economics concepts.
Cost-benefit analysis, cash flow analysis, time value of
money, and risk analysis are a few of the fundamental ideas
and methods utilised in the engineering economy.
In general, the engineering economy is an essential part of
engineering education and practise because it gives
engineers the skills and information they need to design
XXX-X-XXXX-XXXX-X/XX/$XX.00 ©20XX IEEE
Nimisha Dey
Dept. of CSE
RV College of Engineering
Bangalore, India
email: nimishadey.cs20@rvce.edu.in
Dr. Shobha N S
RV College of Engineering
Bangalore India
email: shobhans@rvce.edu.in
successful, long-lasting, and financially viable projects that
meet societal demands.
1.2 BLOCKCHAIN
Blockchain is a technology which enables a form of digital
or virtual currency called cryptocurrency to run. Thanks to
blockchain, cryptocurrencies are immune to counterfeiting,
they don’t even require a central authority and are protected
by strong and complex encryption algorithms. A new block
is created for each of the new transactions and as well as
how many bitcoins they have in reserve. This chain of
records or blocks is called ledger and is shared among all the
people involved in the transaction and hence acts as a public
distributed ledger. One more important point is that a hacker
will not be able to alter the data in the blockchain because
each user has a copy of the ledger and the data within the
block is encrypted by complex algorithms. All of this is
made possible with the help of blockchain technology.
Blockchain can be described as a collection of records
linked with each other strongly resistant to alteration and
protected using cryptography. Different cryptocurrencies use
different hashing algorithms. There are many transactions
taking place all over the world and are validated and then
added block by block. Miners are the ones who validate
these blocks and add to the blockchain. Miners need to solve
complex mathematical problems and the miner who solves
his first adds the block to the blockchain and is rewarded.
The process of solving complex mathematical problems is
called proof of work and the process of adding the block to
the blockchain is called mining with this wallets are
updated. The basic benefit with the evolution of
cryptocurrency has been the low transaction cost. The
underlying concept of having cryptocurrency is the removal
of intermediaries by virtue of which it reduces the
transaction cost between the parties because the more the
middlemen the more the cost gets added on to every
transaction.
II. HISTORY OF BLOCKCHAIN TECHNOLOGY
The history of blockchain technology can be traced back to
2008, when the pseudonymous person or group known as
Satoshi Nakamoto published a white paper titled "Bitcoin: A
Peer-to-Peer Electronic Cash System." This white paper
outlined a decentralised digital currency system that utilised
cryptography to secure transactions and eliminate the need
for intermediaries like banks.
The underlying technology behind Bitcoin was a distributed
ledger called the blockchain, which maintained a record of
all transactions on the network. Each block in the chain
contained a cryptographic hash of the previous block,
creating a tamper-evident chain of blocks.
In 2009, the Bitcoin network was launched, and the first
bitcoins were mined. Over the next few years, Bitcoin
gained popularity as a decentralised digital currency, and
other cryptocurrencies were created using similar blockchain
technology.
In 2014, Ethereum was launched, which introduced smart
contracts, allowing developers to create decentralised
applications that run on the Ethereum blockchain. This
paved the way for a new wave of blockchain-based projects
and applications beyond just cryptocurrencies.
Since then, the blockchain industry has grown rapidly, with
new use cases and applications being explored in industries
such as finance, supply chain management, healthcare, and
more. However, the technology still faces challenges such as
scalability and regulatory uncertainty in some jurisdictions.
III. RELATED WORK
Dr. Burcu Sakız et al. [1] study examines the developing
blockchain technology environment with an emphasis on
economics starting from the history of blockchain to
evolution of blockchain technology.
Chris Berg et al. [2] study's findings support the idea that
blockchain technology might help coordinate economic
activity and pave the way for the potential realisation of the
electronic markets hypothesis.
Lim Hong Hin et al. [3] analysis report of blockchain
technology and its major application in the new era of the
digital economy is provided in this study paper by the
researcher. According to the study, block chain technology
is a set of network software protocols that permits the safe
transfer of funds, property, and information over the internet
without the need for a middleman. The researcher
concentrated on a few key study topics, including the new
dimension of centralised data centres, distributed ledger
technology, precise times tamped with a distinctive
cryptographic signature, and tamper-proof auditable
histories of all transactions.
Christian Catalini et al. [4] built on economic theory to
discuss how blockchain technology can shape innovation
and competition in digital platforms. They identified two
key costs affected by the technology: the cost of verification
and the cost of networking. The cost of verification relates
to the ability to cheaply verify state, including information
about past transactions and their attributes, and current
ownership in a native digital asset. The cost of networking,
instead, relates to the ability to bootstrap and operate a
marketplace without assigning control to a centralised
intermediary. This is achieved by combining the ability to
cheaply verify state with economic incentives targeted at
rewarding state transitions that are particularly valuable
from a network perspective, such as the contribution of the
resources needed to operate, scale, and secure a
decentralised network.
Amaya Vega et al. [5] summarises the findings of a review
of literature on the subject of the use of blockchain
technology in real estate transactions. Instead of looking at
tokenization, it considers whether and how blockchain
technology might help with real estate transactions and title
transfers.
The examination of NITI Aayog's experimental programs
[6] has resulted in the identification of several valuable
insights concerning the application of blockchain
technology, particularly within the Indian framework. These
elements are considered crucial to the triumph of blockchain
pilot programs and undertakings in both public and private
sector environments.
IV. BLOCKCHAIN EVOLUTION
Blockchain technology has come a long way since it was
first introduced in 2008 as the underlying technology behind
Bitcoin. Initially designed as a way to enable secure and
decentralised transactions, blockchain has since evolved into
a versatile technology with many potential applications.
One significant development in the evolution of blockchain
technology has been the introduction of smart contracts.
These are self-executing contracts with the terms of the
agreement between buyer and seller being directly written
into lines of code. Smart contracts allow for automated
transactions and remove the need for intermediaries, which
can improve efficiency and reduce costs.
Another important development has been the emergence of
different types of blockchain networks, including public,
private, and hybrid. Public blockchains, such as Bitcoin and
Ethereum, are decentralised networks that allow anyone to
participate in the network and validate transactions. Private
blockchains, on the other hand, are permissioned networks
where access is restricted to a specific group of participants.
Hybrid blockchains combine elements of both public and
private blockchains and can be tailored to meet the needs of
specific applications.
One of the biggest challenges facing the evolution of
blockchain technology is scalability. As more users join the
network and more transactions are processed, the blockchain
can become slower and more expensive to use. To address
this challenge, developers are working on new solutions,
such as sharding, that can increase the speed and capacity of
blockchain networks.
Overall, the evolution of blockchain technology has been
characterised by a steady expansion of use cases and a
growing focus on scalability and interoperability. As the
technology continues to mature, we can expect to see even
more innovation and adoption in the years to come.
V. IMPACT ON GLOBAL ECONOMY AND ECONOMIC BENEFITS
OF BLOCKCHAIN
Blockchain is a chain of blocks of information linked and
replicated in a distributed database. It is protected by
cryptographic algorithms and only authorised ones can
access the information. The four main applications are
money transfer and payments, property registries,
contractual agreements, and identity confirmation.
Blockchain technology is a network software protocol that
enables the secure transfer of money, assets, and information
via the Internet, without the need for a third-party
intermediary. It can be used as a digital registry to record,
transfer, and verify asset ownership, and to preserve the
integrity and authenticity of sensitive documents or records.
In a network economy with blockchain based asset transfer,
personalised financial and government services may be
better tailored to individual needs. With the help of
cryptographic security algorithms, less friction and human
involvement may be needed to transfer goods and services.
The phrase "Blockchain economy" refers to a shift away
from traditional national hard currencies and antiquated
legacy ledger systems in favour of cryptocurrencies and
digital ledger systems.
In the blockchain economy, rather than using conventional
software application programmes to administer existing
national currencies, technologies like bitcoin and blockchain
serve as the standard instruments for financial management.
Moreover, the blockchain economy is a possible future
setting where cryptocurrencies will displace the world's
current monetary systems. Moreover, individualised
financial and governmental services may be better catered to
individual needs using blockchain-based asset transfer. In
several economic areas, blockchain technology is currently
revolutionising the storing, managing, and transfer of wealth
between digital identities.
The financial sector, particularly its infrastructure for
financial markets, and the insurance industry have both
benefited greatly from blockchain technology. The new
decentralised transactional paradigm that blockchain
technology enables, whose tenets are founded on Satoshi's
white paper about peer-to-peer communication, is at the core
of this enthusiasm. Due to the decentralised transactional
paradigm that blockchain technology enables, several
sectors of the digital economy and global e-commerce are
extremely likely to be significantly impacted. And in fact,
despite the fact that the percentage of e-commerce has been
continuously increasing since the advent of the Internet,
essentially for the past ten years, the primary transactional
paradigm continues to be centralised.
VI. CHALLENGES IN BLOCKCHAIN IMPLEMENTATION
Each transformative technology faces a number of
difficulties during its early phases of development as it
transitions from the research and development phase to the
first few applications and large-scale implementation. Such
technologies are first designed to address a certain collection
of issues, which is part of the issue.
Bitcoin was designed to create a peer-to-peer electronic cash
system that might address the double spending problem
without being dependent on trusted intermediaries, namely
banks, and it has contributed to the rise of decentralised trust
systems and the blockchain revolution. The potential of the
underlying blockchain technology began to gain traction as
Bitcoin gained popularity. However, some of the original
design elements that helped Bitcoin gain popularity, mainly
its limited quantity and pseudonymity, have since emerged
as possible obstacles to its widespread use.
The adoption of blockchain beyond the current trial phase
will be influenced by how well the early use cases are
received. The largest obstacle to guaranteeing that, in the
future, the disruptive potential of this technology will
actually have a chance to play out is choosing the
appropriate use cases for blockchain deployment, as was
previously stated.
One of the primary challenges is the issue of interoperability
between different blockchain platforms and networks. Due
to the lack of a standardised protocol, blockchain networks
are currently unable to exchange information seamlessly,
creating isolated pockets of data that limit the technology's
potential. Scalability is another significant hurdle that must
be addressed to allow blockchain to handle large transaction
volumes in real-time without experiencing processing
delays. Moreover, blockchain security is a paramount
concern, as the technology has been known to fall victim to
breaches and attacks that result in the loss of digital assets.
Another significant challenge is governance, as blockchain
networks are decentralised and lack central control, meaning
a new model of decision-making must be established to
ensure network integrity and resolve any potential disputes
or competing interests among stakeholders.
Overall, successfully integrating blockchain into economic
infrastructure necessitates addressing these challenges and
devising effective solutions to unlock the technology's full
potential.
VII. BLOCKCHAIN USE CASES
IX. REFERENCES
[1] Dr. Burcu Sakız , Prof. Dr. Ayşen Hiç Gencer, “Blockchain
Technology and its Impact on the Global Economy”,
INTERNATIONAL CONFERENCE ON EURASIAN ECONOMIES
2019

Blockchain technology has numerous potential use cases for [2] Chris Berg, Sinclair Davidson and Jason Potts“Blockchain
economic infrastructure that could transform the way Technology as Economic Infrastructure: Revisiting the Electronic
businesses operate and exchange value. Markets Hypothesis”, Front. Blockchain, 04 December 2019 Sec.
Non-Financial Blockchain Volume 2 - 2019 |
One of the most significant use cases is the creation of https://doi.org/10.3389/fbloc.2019.00022
decentralised marketplaces that enable direct peer-to-peer
[3] Lim Hong HinBlockchain, “Economy : The New Era of Digital
trading of goods and services without the need for
Economy”, 2019 IJSRST | Volume 6 | Issue 4 | Print ISSN: 2395-
intermediaries. Blockchain technology can facilitate secure,
6011 | Online ISSN: 2395-602X Themed Section: Science and
transparent, and efficient transactions, eliminating the costs Technology
and delays associated with intermediaries. Another use case
is the creation of digital currencies that operate on [4] Christian Catalini Joshua S. Gans, “SOME SIMPLE
blockchain technology. Cryptocurrencies, such as Bitcoin ECONOMICS OF THE BLOCKCHAIN”, NATIONAL BUREAU
and Ethereum, have already demonstrated the potential for OF ECONOMIC RESEARCH 1050 Massachusetts Avenue
digital assets to serve as an alternative to traditional fiat Cambridge, MA 02138 December 2016, Revised June 2019
currencies. They can enable secure, low-cost, and borderless
[5] Amaya Vega, Trevor Clohessy, “Economics of Blockchain
transactions, potentially reducing the need for traditional
Student Research Paper Series, Vol. 1”, November 2021
banking and financial institutions. Blockchain technology Publisher: Galway-Mayo Institute of Technology
can also enable the creation of new types of digital assets,
such as tokens, which can represent ownership or value in a [6] Arnab Kumar, Tanay Mahindru, Punit Shukla and Aalekh
decentralised network. These tokens can be used for a Sharan, “Blockchain: The India Strategy”
variety of purposes, including crowdfunding, decentralised
finance, and supply chain management. Moreover,
blockchain can facilitate the creation of decentralised
autonomous organisations (DAOs), which can be governed
by smart contracts and allow for transparent decision-
making and resource allocation. This could disrupt
traditional organisational structures and enable more
equitable participation and decision-making for
stakeholders. Overall, blockchain technology has numerous
potential use cases in economic infrastructure that could
increase efficiency, reduce transaction costs, and create new
business models and revenue streams.

VIII.CONCLUSION

Blockchain-based distributed ledgers have the potential to

safely digitise a number of present processes in business,
banking, law, and government services. A decentralised
public ledger that records user transactions in a permanent,
secure, and verifiable manner is what is meant by the term
"blockchain." What matters is that blockchain may be
configured to record anything of value, not only financial
transactions. It is becoming increasingly clear that
blockchain technology will drastically alter several
industries, especially finance. Without a doubt, the financial
industry is leading the way in the use of blockchain
technology. Blockchain is quickly transforming the world
economy.