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Published by Enhelion, 2019-11-20 11:57:39

Module 5

Module 5



Trying to figure out the technicalities behind the working of block chain may feel nothing less than
deciphering rocket science. But the impact it has had can be understood with a basic understanding of
the technology. Block chain and crypto currencies have been read as synonyms very often than not.
Though curtailing the impact of the technology to just crypto currency is an unfair analysis of the far
reaching capacity of the technology.

Have you ever purchased coffee or produce that is labeled as a fair trade product? How can you trust
that information? What about when you meet someone on a dating website? How do you know
they’re really the 35-year-old startup founder and wake boarder that they say they are?

Society today is filled with uncertainty and trust issues -- and with valid reason. To be sure your
purchase is really helping a coffee bean farmer in Ethiopia or that your date is actually who they say
they are, you’d need a system with strong security where records are stored and facts are verified by
many witnesses so that no one could cheat it.

This type of system is called blockchain. No central person or company owns it. Rather, information
is stored across a system of many personal computers so that there is no middleman. It’s
decentralized and distributed so that no one person can take it down or corrupt it. However, anyone
can use the system and help run it, as information is protected through cryptography.

It’s essentially an ever-growing list of transactions (listed in blocks) that are verified, permanently
recorded and linked in chronological order. For most users, the beauty of blockchain will be in the
unknown. Just as most of us are unaware of how 4G technology works or how silicon is processed to
produce central processing units, we continue to use our smartphones on a daily basis. Similarly,

blockchain will be a perfect “backstage” to many changing technologies and will impact the way we
educate, manage, consume, govern and communicate.1


Blockchain will have a huge impact on our future, from banking and secure communications to
healthcare and ride-sharing.

5.2.1. Banking and Payments

Not only will blockchain allow faster exchange of money but it will take place more efficiently and
more securely. Many banks are already working on adopting blockchain technology to improve their

5.2.2. Cybersecurity

All data is verified and encrypted in blockchain using advanced cryptography, making it resistant to
unauthorized changes and hacks. Centralized servers can be very susceptible to data loss, corruption,
human error and hacking. Using a blockchain decentralized, distributed system would allow data
storage in the cloud to be more robust and protected against attacks. "Bitcoin is still getting stronger.
It’s a system that is under a constant denial-of-service attack, that is on the internet being attacked
by hackers, by agents, by other systems, 24 hours a day."2 In security, we have a really funny term,
which is a honeypot. A honeypot is a system that is designed to attract hackers. What bigger
honeypot could you have than a financial network that has $6 billion on it? If you hack bitcoin, there
is a $6 billion reward for you finding a way to hack it. No one has collected that reward yet, and it’s
not because they haven’t been trying. They’ve been trying nonstop. But systems like bitcoin are

5.2.3. Internet of Things

Today the Internet of Things (IoT) includes cars, buildings, doorbells and even refrigerators that are

embedded with software, network connectivity and sensors. However, because these devices operate

1 Kage Spatz, (Published on March 9, 2018), Retrieved from
blockchain-will-impact-the-world-beyond-cryptocurrency/#4b5791341883), Last visited on 22 January, 2019 at 06:09

2 Antonopoulos, Andreas M , 2016, The Internet of Money, Page No. 47.
3 Antonopoulos, Andreas M , 2016, The Internet of Money, Page No. 51.

from a central location that handles communications, hackers can gain access to the car you’re
driving or to your home. According to Kamil Przeorski, an expert in Bitcoin and Ethereum
capabilities, Blockchain has the potential to address critical security concerns because it decentralizes
all of the information and data. This is increasingly more important as IoT capabilities increase.4

5.2.4. Unified Communications

Blockchains can enable faster, safer and more reliable automated communication. Automated or
digital communication based on pre-built algorithms is already occurring at scale in some industries.
Examples of this include emails, system alerts and call notifications. Matt Peterson, co-founder of
Jive Communications and an early adopter and miner of Bitcoin has said that “Blockchains can shift
the playing field to allow authorized, bi-directional communications and transactions that occur more
freely in an automated environment and produce an immutable record of communication.” This will
greatly enhance the safety and reliability of our communications.5

5.2.5. Government

With blockchain, we could reduce bureaucracy and increase security, efficiency and transparency.
Welfare and unemployment benefits could also be more easily verified and distributed and votes
could be counted and verified for legitimacy.6

5.2.6. Crowd funding and Donating to Charities

Donating to a worthy cause is never a bad idea. But what percentage of your donation is actually
being given to those it’s meant for? Blockchains can help ensure that your money gets exactly where
you need it to go. Bitcoin-based charities are already creating trust through smart contracts and online
reputation systems and allowing donors to see where their donations go through a secure and
transparent ledger. The United Nations’ World Food Programme is currently implementing
blockchain technology to allow refugees to purchase food by using Iris scans instead of vouchers,
cash or credit cards.7

4 Kage Spatz, (Published on March 9, 2018), Retrieved from
blockchain-will-impact-the-world-beyond-cryptocurrency/#4b5791341883), Last visited on 22 January, 2019 at 06:09

5 Ibid.
6 Ibid.
7 Ibid.

5.2.7. Healthcare

Wouldn’t it be great if doctors did not have to "fax over referrals” anymore?Why can't all of our
medical information be stored in a central database? The centralization of such sensitive information
makes it very vulnerable. With all of the private patient data that hospitals collect, a secure platform
is necessary. With the advent of blockchain, hospitals and other healthcare organizations could create
a centralized and secure database, store medical records and share them strictly with authorized
doctors and patients.8

5.2.8. Rentals and Ride-sharing

Uber and Airbnb may seem like decentralized networks, but the platform owners are in complete
control of the network and naturally take a fee for their service. Blockchain can create decentralized
peer-to-peer ride-sharing apps and can allow car owners to auto pay for things like parking, tolls and

While blockchain is still relatively new and many experiments will fail before they succeed, the
possibilities for innovation are endless. Along with the eight points listed, it will affect retail, energy
management, online music, supply chain management, forecasting, consulting, real estate, insurance
and much more. Let’s prepare ourselves for a future where distributed, autonomous solutions will
have a huge role -- both in our personal lives and in business.9

5.2.9. Solving Payment Problems

If you think about starting up a business in an international environment, there are two primary
barriers to becoming a global business. The first barrier that it is difficult to transport products and
services across borders. Withthe internet, we solved that. We can now create products and services
that are virtual, ones that we can sell anywhere in the world. So, we can deliver the product, but we
still have one big problem: How do we get paid? Bitcoin solves that part. It allows us to receive
payments from anywhere in the world, instantaneously. The bitcoin network allows any individual to
send an amount that is as small as 100-millionth of a bitcoin, which in today’s terms is a very tiny

8 Kage Spatz, (Published on March 9, 2018), Retrieved from

blockchain-will-impact-the-world-beyond-cryptocurrency/#4b5791341883), Last visited on 22 January, 2019 at 06:15

9 Ibid.

amount of money. "Credit cards were made in the 1950s, and they were most certainly not made for
an internet age. Bitcoin is made for the internet age."

You can do micro transactions. You can collect payments from millions of people in tiny amounts
and make them, in aggregate, be worth something. On the same network where you can send one-
thousandth of a euro or one-millionth of a euro, you can send a billion euros or a trillion euros. The
fee will be exactly the same, because fees depend on the size of the transaction in kilobytes, not on
the amount or content.10

5.2.10. Neutrality

Bitcoin is neutral to the sender, the recipient, and the value of the transaction. That means it gives
every citizen, every user of bitcoin, the ability to innovate in terms of financial instruments, payment
systems, and banking. You can operate on the same level as Citibank. That is truly revolutionary.11

The real power of the internet comes from net neutrality. Net neutrality is the concept that the
internet does not discriminate based on source, destination or content. "Bitcoin is the first financial
network that exhibits neutrality."In a bitcoin transaction, the network doesn’t care about the source,
the destination, the amount or what type of financial application it’s supporting. The only relevant
question is, did you pay a sufficient fee to use the network resources? And if you did, your
application is valuable.12

5.2.11. Impacting Lives around the World

Bitcoin is the internet of money. As a technology, it can bring economic inclusion and empowerment
to billions of people in the world. An example of a specific application that is going to fundamentally
change the lives of more than a billion people in the next five to ten years. Every day, an immigrant
somewhere cashes their paycheck and stands in line to wire 50 percent of that paycheck back to their
home country to feed their extended family. In the US, 60 million people have no bank accounts, yet
they cash their paychecks and send them abroad. Overall in the world, $550 billion is transmitted
every year as remittances from first-world countries. Much of that money is sent to five major

10 Antonopoulos, Andreas M , 2016, The Internet of Money, Page No. 15.
11 Antonopoulos, Andreas M , 2016, The Internet of Money, Page No. 16.
12 Antonopoulos, Andreas M , 2016, The Internet of Money, Page No. 40.

destinations: Mexico, India, the Philippines, Indonesia, and China. In some of these places,
remittances represent up to 40 percent of the local economy. Sitting on top of that flow of $550
billion are companies like Western Union, and they take, on average, a cut of 9 percent of every
single one of these transactions out of the pockets of the poorest people of the world. "Imagine what
happens when one day one of these immigrants figures out that they can send money back to their
home country with bitcoin — not for 15 percent, not 10 percent, not 5 percent, but for 5 cents. Not a
percentage; a flat fee." As an immigrant you can change your financial future by not paying 9
percent to send money home, imagine what happens if every month, instead of sending 91 dollars
home, you send 100 dollars home. That makes a difference. There are a billion people, right now,
with access to the internet and feature phones13"Consider what we’ve been talking about: financial
transactions, banking, payments. It’s a fancy credit card. It’s Paypal, basically. It’s a global Paypal.
But it’s not. It’s something completely, radically different." "For me, the vision of bitcoin is not to
bank the other 6 billion; it’s to unbank all of you.”

5.2.12. Currency Creates Sovereignty

After 2008, currency creates sovereignty. The internet has its own currency, which means that the
internet has purchasing power. Which means the internet has economic freedom. Which means the
internet can exert that economic freedom in a post-nationalist way, in a way that ignores borders and
makes the nation-state not obsolete, but simply less relevant.14

"The dream of nation-states, to create a totalitarian financial system, died on January 3rd, 2009,
with the invention of bitcoin and the mining of the genesis block."15

The rationale behind block chain being highly valued is because of the way the data is recorded and
linked to the database. It is a technology which protects the integrity of the digital piece of
information. All the computers participating in the block chain network stores and verifies the data,
making it robust in the first go. Every new data that is added or new transaction is linked to the
previous one and is notified to all the users. This makes it impossible to modify the data in anyway.

13 Antonopoulos, Andreas M , 2016, The Internet of Money, Page No. 64.
14 Antonopoulos, Andreas M , 2016, The Internet of Money, Page No. 102.
15 Antonopoulos, Andreas M , 2016, The Internet of Money, Page No. 44.

And since all the data are recorded, the system becomes transparent. Also there is no specific or
single authority.16

The impact of block chain is wide spread across various fields and markets within the economy.
While internet revolutionized the world, phase two of such a revolution was caused by block chain
technology. You pick any industry, and this technology holds huge potential to disrupt it, creating a
more prosperous world where people get to participate in the value that they create. The financial-
services industry is up for serious disruption—or transformation, depending on how it approaches
this issue.17 We shall discuss the various fields in which this technology has caused an identifiable

5.2.13. Impact on digital marketing

Now it is also growing in the digital marketing industry, adding a new revolution to the relationship
between consumers and businesses. Block chain aims to increase transparency in all sectors of a
business as the information is stored digitally.

§ Addresses the issue of online privacy
The consumers can protect their online profile by determining the amount of content they share with
the companies. The technology allows for greater protection of consumer interests on the internet via
the peer to peer systems technology.
The menace of hacking and data leaks can also be controlled via block chain technology providing
for a higher protection of the consumers data.

§ Transformations in digital advertising

The numerous pop up ads that bombarded the screen when a new website is accessed can be

frustrating for the consumer and prove pointless if those ads do not attract their attention. The block

chain technology operated companies have developed a mechanism which provides for a win-win

situation for all parties involved. Considering how block chain technology is decentralized, no one

party has control over it, it provides for a better platform and creates a targeted group for the ads.

16 Gupta, A. (2018). Understanding Blockchain Technology and its Impact on Procurement - Zycus Procurement Blog.
[online] Zycus Procurement Blog. Available at:
blockchain-technology-and-its-impact-on-procurement.html [Accessed 10 Jan. 2019].
17 McKinsey & Company. (2016). How blockchains could change the world. [online] Available at: [Accessed 6 Jan.

§ Elimination of intermediaries
Advertisements are displayed on the social media apps through the parent company and they act as
the middlemen to these contracts. But with the adoption of block chain technology, such
intermediaries can be eliminated. Previously this job was done by sites like Facebook or Google to
make the communication between site owners and digital marketers. But with block chain, there is no
need for intermediaries when users sign a contract related to advertising. This ensures a significant
increase in the income of digital marketers due to the cutting of cost that went to intermediaries

5.2.14. Solving the problem of IP in a digital age

During the first generation of the internet, many creators of intellectual property were not properly
compensated. Musicians, journalists, playwrights, photographers, fashion designers, artists,
architects, artists and engineers were not only obliged to record labels, publishers, film studios,
galleries, universities, and large corporations - these inventors now also had to deal with digital
piracy that became possible on the web.
Block chain technology provides a new proposal for creators of intellectual property to get the value
they create. Consider the digital registry of artwork, including the certificates of authenticity,
condition, and ownership. A new startup, which runs on the block chain technology, lets artists
themselves upload digital art, watermark it as the definitive version, and transfer it, so similar to
bitcoin, it moves from one person’s collection to another’s.19

5.2.15. Impact on the construction industry

Despite the rising openness to technology in construction, advances have primarily supported the current

approach to building. By implementation of Block chain in the construction industry may see the

essential disruption underway in other industries. Currently, the number of direct contracts with a

client is limited to consultants and a main contractor. The main contractor engages subcontractors to

carry out the specialized work.

18 Hooda, S. (2018). The impact of block chain technology in digital marketing. [online] Available at: [Accessed 6 Jan. 2019].
19 Tapscott, D. and Tapscott, A. (2016). The Impact of the Block chain Goes Beyond Financial Services. [online] Harvard
Business Review. Available at:
[Accessed 7 Jan. 2019].

With the implementation of Block chain technology there could be a visible shift to more direct
contractual relationships with the client and reduce the intermediaries involved in the process of
construction. This would further go along with the trend of the gig economy and may even help in
providing a remedy for shortage of skill in the market. Though it would not lead to a complete
breakdown of company structure but it could result in smaller companies that habitually collaborate.
There is already a form of procurement called Construction Management, where a Construction
Manager is engaged by the client to manage the sub-trades who are contracted directly to the client.
The implementation of the Block chain will take us further by using Smart Contracts and the
formation of DAOs to deliver projects and automate the administration of the building and sub
contracts. This would create an auditable record of transactions and certifications of events in the life
cycle of the building.20

5.2.16. Developing an inter-dependent market

Many companies which share the market are really service aggregators. They access the collective
willingness of suppliers to sell their excess capacity (cars, vacant rooms, equipment, handyman
skills) through a centralized policy and then resell them to users, all while collecting a cut off the top
and valuable data for further commercial exploitation. Block chain technology can make available
the suppliers of these services a means to join forces that deliver a greater share of the value to
them. Just about everything Uber does could be done by smart agents on a block chain. The block
chain’s trust protocol allows for cooperatives, or autonomous associations, to be formed and
controlled by people who come together to meet common needs. All revenues for services, except for
overhead, would go to members, who also control the platform and make decisions.21

5.2.17. Enabling supply chain transparency

§ Greater Obedience and Pellucidity

20 Hughes, D. (2017). The Impact of Block chain Technology on the Construction Industry. [online] Medium. Available

85ab78c4aba6 [Accessed 9 Jan. 2019].
21 Tapscott, D. and Tapscott, A. (2016). The Impact of the Block chain Goes Beyond Financial Services. [online] Harvard

Business Review. Available at:

[Accessed 7 Jan. 2019].

Pellucidity and transparency are the primary benefits of Block chain technology. The adoption of the
technology would eliminate on hand organizational silos, driving organizational unification, and
process simplicity and leadership empowerment and make room for a better and improved system of
functioning within the organization and therefore creating an intelligent medium of performance.

§ Efficient Order and Asset Tracking
Block chains offer superior visibility and tracking capabilities across the operational blueprint.
Companies can now eagerly produce meticulous information about a products life cycle, including
supplier data, manufacturing details, and logistics information.

§ Reduced Auditing Errors
Occasionally, banks may be incompetent of identifying all the probable overbillings or
overpayments. Block chain can address a complex situation such as this, by creating finite paper-
trails, and isolate key impediments. Companies can further verify all operating systems that were
affected and recover preventive capacities.

§ Easy Identification of Endeavored Fraud
Block chain offers resistant security and monitoring potential – firms can identify frauds without
difficulty, amid the enormous data volumes. Prompt recognition of fraud, manages costs, and
controls possible attempts with the Block chain’s patch-based approach further fortifying the
transaction matrix.

§ Better Retention of Consumer Trust
Enhanced clarity into the supply chain and knowing the origin of a product is a great trust-builder –
reaching beyond supplier information, by offering real-time, ‘live’ and consistently ‘connected’

§ Enhanced Real-time Consumer’s Response
Real-time customer response is a key takeaway for Block chain technology. For instance, a customer
may seek to place future orders on an item after it drops below a specified rate. Steady feedback,
conveyed to providers, retailers and manufacturers would help create more accurate forecasts.

§ Improved Scalability
It’s immensely important to understand how Block chain technology ensures scalability.
The technology can be leveraged to identify future trends, help organizations plan future business
strategies and keep the sector as a whole, free of pernicious activities – allowing new entrants to
easily enter the space.
Block chain is clearly a game-changer – with the power to disrupt the way goods are produced,
marketed, purchased, or consumed - while also transforming tracking and customer feedback

22 Ranjanghatmuralidhar, M. (2017). Blockchain Technology: Enabling Supply Chain Transparency through Greater

Visibility | HCL Blogs. [online] Available at:

enabling-supply-chain-transparency-through-greater-visibility [Accessed 12 Jan. 2019].

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