BLOCKCHAIN
THE NEW BUSINESS ENABLER
Blockchain is emerging as the face of the Fourth Industrial
Revolution, just like that of the internet in the previous
industrial revolution. Distributed and immutable ledger
and advanced cryptography makes transfer of assets far
more secure and inexpensive sans third-party
intermediaries. Besides being a tool to enable digital
currencies, it acts as a decentralized and global
computational infrastructure that can invariably revamp
the prevailing processes in business, governance, and
society.
Inception of Bitcoin spearheaded crypto-assets, followed
by Ethereum which is a platform for building
decentralized applications through smart contracts has
inspired a whole new token economy. Plethora of
blockchain applications in voting, digital identification,
financing and health are gaining more attention. While
blockchain is being seen as a potential support for
environmental sustainability, there has been little appraisal
of how to build the public-private collaborations so as to
leverage its underlying nascent opportunities.
CHALLENGES ASSOCIATED WITH ADOPTION
OF BLOCKCHAIN TECHNOLOGY
1) Lack of awareness of the underlying technology,
especially in sectors other than banking, and a lack of
understanding about the way it works hampers
investment as well as exploration of ideas. According
to Deloitte’s 2016 executive survey on blockchain
technology, 39 percent of senior executives at large US
organizations have little or no knowledge of
blockchain.
2) In a given industry sector, many multiple chains are
being developed by various organisations to many
different standards. This defies the purpose of
distributed ledgers and fails to harness network effects.
3) Cost and efficiency: The speed and effectiveness with
which blockchain networks can execute peer-to-peer
transactions comes at a high aggregate cost. This
inefficiency arises because each node performs the
same tasks as every other node on its own copy of the
data in an attempt to be the first to find a solution.
4) Security and privacy: Many potential applications of
the blockchain need good transactions and contracts to
indisputably connect to well-known identities. This
raises vital questions on privacy and security of the
information kept on the non-permissioned blockchain
or shared ledger.
5) Lack of standards and best practices: There is a
lack of uniform standards on blockchain technology.
According to the Deloitte survey, 56 percent of
executives consider technical standards as critical for
wider adoption. United effort of all industry players
would be necessary to frame uniform standards and
protocols instead of fabricating their own internal
versions.
6) Regulatory and legal uncertainty: Regulations often
don’t keep pace with the advances in technology. Any
regulation that recognizes blockchain applications,
including smart contracts or digital identities, can
provide a big boost to its adoption.
KEY DRIVERS OF BLOCKCHAIN
 Lower costs of bandwidth, data storage, and
computing
 More efficient way to maintain trust due to
immutability
 Prevalence of decentralized business models
BLOCKCHAIN IMPLEMENTATION
Blockchain is a technology that allows consumers and
businesses to track transactions from beginning to end
without having to consult a central authority tasked with
preserving the transaction or encrypting the data. By
codifying these transactions, it provides transparency of
what’s going on in the history of transactions and also
makes these transactions more secure.
Some of the organisational effects of blockchain include:
A. Supply chain tracking
Business owners often don’t have oversight of who
their vendor’s suppliers are, but technology could help
by bringing more openness to the supply chain. For
example, in the food industry, it’s extremely important
to have solid records that trace each product to its
source in case something goes wrong. Because of this,
Walmart uses blockchain to keep track of their
produce, where it came from, where it was processed
and stored, and what its expiry date is. Bringing
transparency into the supply chain also helps in
verifying things like the authenticity of parts and
ethical sourcing.
B. Lowering operating expenses
Blockchain allows businesses to send and receive
payments through a programmatic set of rules called
“smart contracts’’. These take expensive brokers,
escrow agents, and other financial intermediaries out
of the equation.
 C. Asset protection Executives are exploring how it can help to automate and
Since blockchain transactions aren’t bound by a streamline their procedures. While thinking about loans,
centralised storage system and can’t be tampered with investing, cross-border transactions, loyalty programs, and
or changed retrospectively, they’re arguably more we start to get an idea of the extraordinary potential of
secure than the current systems in place. Blockchains technology in stripping out much of the administration
store information using math and software rules that associated with banking services. If the ‘need for trust’ is
are almost impossible or practically taken care of by the openness of blockchain,
incomprehensible to manipulate. reconciliations, verifications, and other checking work
becomes unnecessary.
D. Replacing intermediaries
Cryptology replaces third-party intermediaries as the Blockchain goes way beyond Financial Service
trust keeper by using mathematics. It can help reduce Industry
overhead costs for companies or individuals when The general perception of blockchain is that the
trading assets or can quickly prove ownership or technology is primarily applicable to the financial services
authorship of data. industry. It’s quite obvious that much of this perhaps
comes from more popular use-cases in the
E. Providing new possibilities cryptocurrencies and payments space as FSIs have been
According to Dr Michael Yuan, Chief Scientist of the early adopters.
CyberMiles, a foundational blockchain designed for
commercial apps, “Future applications of this In reality, blockchain has applications across several other
technology could include e-commerce marketplaces industries, which seem to be gradually realizing the
and applications, peer-to-peer finance and insurance technology’s potential
transactions, content distribution, healthcare data
exchanges, B2B accounting applications, supply
chain, and customer service applications.” It’s a brave
new world for businesses who are willing to embrace
it.
Types of Blockchain Implementation:
a) Public blockchains are open and allow anyone to
confirm transactions;
b) Permissioned blockchains are only accessible to
pre-approved parties.
Understanding blockchain’s competitive landscape
and quantifying its potential
Blockchain adoption is still in its infancy. In 25 years’
time, we could see it heralded as the invention that
changed everything. No wonder the World Economic
Forum has singled out ‘the blockchain’ as one of the core
technologies of the fourth industrial revolution.
Many companies are collaborating with blockchain start-
ups and some of the large players are even developing their
own solutions and filing patents. In addition, most
companies are opting to be a part of a consortium of
industry players, regulators, and governments which
would bolster the development of decentralized business
platforms and applications.
The idea and technology behind the blockchain has made
financial services companies wondering if their very
purpose of existence will become redundant in a world Use cases for Financial and technological feasibility of
where all transactions will made with no need for Blockchain:
intermediaries. While on one hand this does present a huge 1) (Zīle, 2018)
threat to banks, on the other hand, it could become their 2) (Çabuk, 2018)
path to reinvention and renewed relevance.
Why should companies care?
Blockchain as a technology has become too crucial to take
no notice of. While process efficiencies and better security
are key benefits that are being targeted, perhaps the real
value proposition and potential lies in the new revenue and
solutions that could be enabled by the technology.
In addition, since blockchain can be particularly
advantageous when business partners exchange value,
business consortia are important to increase adoption. As
examples, B3i and HKMA are industry-led consortia
getting business partners to collaborate on new reinsurance
and trade finance platforms.
Blockchain is definitely not an elixir for all cost and
efficiency-related issues and businesses should carefully
assess the technology’s relevance and viability to different
processes. In fact, cryptography-based trust models could
bring new and unforeseen risks for which companies
would need to consider appropriate changes in their risk
management strategy and governance models.
Regulations and Policies
Despite blockchain’s capability to enhance data security
and prevent cyber-attacks, investors still remain
apprehensive when it comes to adopting this technology
since it is alleged to be in the grey area of law in a specific
country. As blockchain is being both adopted and banned
by different societal and governmental institutions, the
world is in limbo. Today, regulatory bodies are tasked with
whether or not laws should be drafted for the use of
blockchain.
Indirect and Direct Regulations
A multitude of countries worldwide have acknowledged
the requirement for appropriate blockchain regulations.
Most countries that allow the use of blockchain and
cryptocurrency trading are currently using direct or
indirect strategies to regulate the industry. When laws
governing the blockchain-related technology are officially
introduced by the government they are called direct
regulations, and when blockchain companies have to
follow the general regulations imposed on tech companies
as well as those specific to blockchain compliance they are
termed as indirect regulations.
However, doing the latter is not always feasible. For
instance, with the recently introduced General Data
Protection Regulation (GDPR) in the European Union,
every citizen has the right to be “completely forgotten
online” if / when they wish so, and delete their profile or
account. It is not always easy to follow such an approach
while dealing with blockchain applications, so the burden
to comply with the law falls on blockchain companies in
this case.
Some countries took a direct approach to blockchain
regulations.
 There are several federal agencies that regulate
blockchain-related businesses in the United States.
While the U.S. government has spoken on the extensive
regulations of the cryptocurrency industry, it’s been
silent on other blockchain-related business models.
Federal Trade Commission (FTC) went further and
created a Blockchain Working Group, whose primary
goal is to crack down illegal and fraudulent schemes
arising in the marketplace from time to time. U.S.
government takes the same stance with the blockchain
industry as it does with anything else: regulations first,
business second.
 Belarus was the first country in the world to create an
official regulatory framework for the blockchain
industry. In 2017, the president signed an agreement
focused on the innovations in blockchain and
cryptocurrency. The HiTech Park has been designated
as a special sector in the country, with special tax and
legal regime for blockchain and crypto businesses.
 Malta also known as the Blockchain Island, believes
the potential of blockchain is endless. As part of their
initiative to embrace this technology, the country has
recently introduced two blockchain-related acts, known
as Malta Digital Innovation Authority Act (MDIA
ACT) and Innovative Technology Arrangement and
Services Act (ITAS Act). MDIA Act focuses on
certifying blockchain and establishing standards for the
industry, while the ITAS Act focuses on setting up
digital ledgers and regulating the entry of new
blockchains.
 Gibraltar also was one of the first countries to adopt
blockchain regulation. Gibraltar’s regulation is applied
to exchanges, wallet providers, and all other business
models working on a distributed ledger technology
(DLT). The country’s DLT firms are regulated by the
Gibraltar Financial Services Commission (GFSC).
The more blockchain will be developed, the more
countries worldwide will be accepting a proper regulatory
framework for it.
Potential for blockchain lies in its architectural ability to
shift, traditional economic systems – potentially
transferring value from shareholders to stakeholders as
distributed solutions increasingly take hold. If harnessed
in the right manner, blockchain has immense potential to
enable a move to cleaner and more resource preserving
decentralized solutions, unlock natural capital and
empower communities. This is particularly important for
the environment, where global commons and non-
financial value challenges are currently so prevalent.
However, if history has taught us anything, it is that such
transformative changes will not happen automatically.
They will require deliberate collaboration between diverse
stakeholders ranging from technology industries to
environmental policy-makers. It is our hope that
opportunities, risks and suggested next steps will stimulate
stakeholders to embark on an exciting new action agenda
that builds blockchains for a better planet.
REFERENCES
Çabuk, U. &. (2018). A Survey on Feasibility and Suitability of Blockchain Techniques for the E-Voting Systems.
International Journal of Advanced Research in Computer and Communication Engineering (IJARCCE). 7. 124-
134. 10.17148/IJARCCE.2018.7324. .

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SUBMITTED BY:
Deepansh Goyal - UM18265
Dipti Mohapatra – UM18281
Team Name – Utkarsh
Xavier Institute of Management, Bhubaneswar
(XIMB)