LOVELY PROFESSIONAL UNIVERSITY

MITTAL SCHOOL OF BUSINESS

Name of the faculty member – Dr. Arun Khatri

Course Code: FINMM809 Course Title: Blockchain Cryptocurrencies and Smart

Contracts
Academic Task No: 2 Academic Task Title: CA 2
Date of Allotment: May, 2024 Date of Submission: 27th May,2024
Student Name: Gracy takrani Student Reg. No: 12011407
Term: 8th Module Section: Q2010
Max. Marks: 30 Marks. Obtained:

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 THE BLOCK-CHAIN AND US
Overview:
"The Blockchain and Us" is an award-winning documentary released in 2017 by Swiss
filmmaker Manuel Stagars. The film explores the transformative potential of blockchain
technology beyond its association with cryptocurrencies like Bitcoin. Through interviews with
blockchain experts, scientists, entrepreneurs, corporate decision-makers, politicians, and
investors, the documentary delves into the impacts of blockchain on business, society, and
individuals.

It provides an insightful and thought-provoking exploration of blockchain technology. It

highlights the transformative potential of blockchain beyond cryptocurrencies, showcasing its
applications in various industries and its potential to address trust and decentralization issues
in the digital age.

Key Themes:

 Understanding Blockchain: The documentary begins by explaining the fundamentals

of blockchain technology. It is described as a decentralized digital ledger where
transactions are recorded in a secure, transparent, and immutable manner. Each block
of transactions is linked to the previous one, forming a chain. This structure ensures that
once data is recorded, it is tamper-proof, providing a high level of security and trust.

 The Genesis of Bitcoin: The film covers the origin of Bitcoin, the first and most
wellknown application of blockchain technology. It discusses the motivations behind
Bitcoin's creation by the pseudonymous Satoshi Nakamoto in response to the 2008
financial crisis. Bitcoin is a decentralized digital currency that operates without the need
for a central authority, offering an alternative to traditional banking systems.

 Beyond Cryptocurrencies: While Bitcoin brought blockchain to the forefront, the

documentary emphasizes that blockchain's potential extends far beyond
cryptocurrencies. It highlights various applications of blockchain technology in
different industries, showcasing how it can revolutionize finance, supply chain
management, healthcare, and more.

 Examples:

⎯ Finance: Blockchain can streamline cross-border payments, reduce fraud, and

lower transaction costs.
 ⎯ Supply Chain: It can enhance transparency and traceability, ensuring the
authenticity and origin of products.
⎯ Healthcare: Blockchain can secure patient data and improve interoperability
between healthcare providers.

The documentary "The Blockchain and Us" presents a compelling narrative on the
transformative potential of blockchain technology. It highlights the benefits of decentralization,
transparency, and security while acknowledging the challenges and criticisms associated with
blockchain.

Critical Analysis:

 Trust and Decentralization

⎯ Viewpoint: Blockchain technology can create a unsafe environment where transactions
do not require intermediaries or middlemen.
⎯ Analysis: This viewpoint emphasizes blockchain’s potential to reduce dependency on
central authorities like banks and governmental bodies. By leveraging consensus
mechanisms, blockchain ensures the integrity and authenticity of transactions, which
can reduce fraud and enhance transparency. However, while the elimination of
intermediaries can lower costs and increase efficiency, it also challenges existing
regulatory frameworks and could potentially create new forms of systemic risk if not
managed properly.
⎯ Example: In supply chain management, blockchain can provide end-to-end visibility and
traceability, ensuring that each step of the process is transparent and verifiable.

 Transparency and Security

⎯ Viewpoint: Blockchain offers unparalleled transparency and security for digital
transactions.
⎯ Analysis: The immutability of blockchain records provides a high level of security
against tampering, making it ideal for applications requiring robust audit trails, such as
supply chain management and healthcare. The transparent nature of blockchain can also
enhance accountability and trust. However, this transparency can conflict with privacy
needs, especially in sensitive sectors like healthcare. Balancing transparency with
privacy protections remains a significant challenge.
 Potential Beyond Cryptocurrencies
⎯ Viewpoint: While Bitcoin introduced blockchain, the technology’s potential extends far
beyond cryptocurrencies.
⎯ Analysis: This viewpoint is well-supported, as blockchain's applications are diverse,
including areas such as finance, supply chain, healthcare, and digital identity
verification. For example, smart contracts and DeFi platforms leverage blockchain to
create more efficient and accessible financial services. Nonetheless, the transition to
blockchain-based systems requires substantial technological, organizational, and
regulatory adjustments, which can be a significant barrier to adoption.
⎯ Example: Ethereum, a blockchain platform that supports smart contracts, enables the
creation of decentralized applications (dApps) that can revolutionize industries such as
finance, real estate, and supply chain.

 Economic and Societal Impact

⎯ Viewpoint: Blockchain has the potential to democratize access to financial services and
disrupt traditional power structures.
⎯ Analysis: By enabling peer-to-peer transactions and reducing reliance on intermediaries,
blockchain can empower individuals and small businesses, particularly in underserved
regions. For example, decentralized finance (DeFi) platforms provide banking services
to those without access to traditional banking. However, this disruption can also lead to
resistance from established institutions and potential regulatory pushback. Additionally,
there is the risk of creating new forms of inequality if access to blockchain technology
is not equally distributed.

 Challenges and Criticisms

⎯ Viewpoint: Blockchain faces significant challenges, including scalability, energy
consumption, and regulatory uncertainty.
⎯ Analysis: Scalability remains a critical issue, as many blockchain networks struggle to
handle high transaction volumes efficiently. The energy consumption associated with
Proof of Work (PoW) consensus mechanisms, especially in Bitcoin mining, raises
environmental concerns. Regulatory uncertainty also poses a major hurdle, as
inconsistent regulations across jurisdictions can impede adoption and innovation.
Addressing these challenges requires technological advancements (e.g., Proof of Stake
(PoS) and Layer 2 solutions), international cooperation on regulatory standards, and
ongoing innovation.
 Disruption of Existing Business Models
Blockchain has the potential to significantly disrupt existing business models across various
sectors. Here are some key areas: Decentralized Finance (DeFi)

Overview:
DeFi leverages blockchain to offer financial services like lending, borrowing, trading, and
insurance without intermediaries.

Business Model:

⎯ Decentralized Exchanges (DEXs): Platforms like Uniswap and SushiSwap enable peerto-
peer trading of cryptocurrencies without centralized control.
⎯ Lending and Borrowing: Platforms like Aave and Compound allow users to lend their
cryptocurrencies for interest or borrow against their crypto holdings.
⎯ Stablecoins: Cryptocurrencies like USDC and DAI that are pegged to stable assets
provide a stable store of value and medium of exchange.

Disruption:

⎯ Reduced Costs: By eliminating intermediaries, DeFi reduces transaction fees and

operational costs.
⎯ Increased Access: DeFi provides financial services to unbanked and underbanked
populations.
⎯ Enhanced Efficiency: Automated processes via smart contracts reduce the time and
complexity of financial transactions.

Challenges:

⎯ Regulatory Compliance: DeFi operates in a regulatory grey area, which can pose risks to
users.
⎯ Security Risks: Smart contract vulnerabilities can lead to significant financial losses.

Example:
Aave, a DeFi platform, allows users to lend and borrow cryptocurrencies without traditional
banks, offering higher interest rates for lenders and lower borrowing costs.

Tokenization
Overview:
Tokenization involves representing real-world assets (e.g., real estate, art, commodities) as
digital tokens on a blockchain.

Business Model:

⎯ Fractional Ownership: Tokenization allows assets to be divided into smaller shares,

making it easier for individuals to invest in high-value assets.
⎯ Liquidity: Tokens can be traded on secondary markets, increasing liquidity for
traditionally illiquid assets.

Disruption:

⎯ Access to Investment: Lower barriers to entry enable more people to invest in diverse
asset classes.
⎯ Increased Liquidity: Secondary markets for tokens provide liquidity and enable faster
transactions compared to traditional markets.
⎯ Transparency and Security: Blockchain ensures transparent ownership records and secure
transactions.
Challenges:

⎯ Regulatory Hurdles: Securities laws and regulations need to adapt to accommodate

tokenized assets.
⎯ Market Acceptance: Widespread acceptance and adoption of tokenized assets are still

developing. Smart Contracts

Overview:
Smart contracts are self-executing contracts with the terms of the agreement directly written
into code on the blockchain.

Business Model:

⎯ Automated Execution: Contracts automatically execute when predefined conditions are

met, reducing the need for intermediaries.
⎯ Trust less Transactions: Parties can engage in transactions without needing to trust each
other, as the contract enforces the terms.

Disruption:

⎯ Efficiency Gains: Automation reduces administrative overhead and accelerates

transaction processes.
 ⎯ Reduced Fraud: Immutable code and execution ensure that the terms of the contract are
adhered to, reducing the risk of fraud.
⎯ Cost Savings: Eliminating intermediaries can significantly reduce costs associated with
contract enforcement and dispute resolution.

Challenges:

⎯ Code Vulnerabilities: Bugs and vulnerabilities in smart contract code can lead to
unintended outcomes.
⎯ Legal Recognition: The legal status of smart contracts varies by jurisdiction, which can
complicate enforcement.

Examples:

In real estate, smart contracts can automate the process of property transfers once payment
conditions are fulfilled.

Research on Blockchain Employment in Specific Industries

Blockchain technology is being employed across various industries to enhance transparency,
security, and efficiency. Below are detailed examples of blockchain applications in finance,
supply chain, and healthcare, along with an Excel sheet summarizing use cases in the private
and public sectors in India.

Finance
Use Case: Cross-Border Payments

⎯ Example: RippleNet
⎯ Description: RippleNet is a blockchain-based payment platform that enables fast, secure,
and low-cost cross-border transactions. It reduces the reliance on banks and increases
transaction speed.
⎯ Challenges: Regulatory compliance, integration with existing banking systems, and
managing liquidity.
⎯ Benefits: Reduced transaction fees, faster settlement times, and enhanced transparency.
Use Case: Decentralized Finance (DeFi)

⎯ Example: Aave, Compound

⎯ Description: DeFi platforms enable users to lend, borrow, and earn interest on
cryptocurrency holdings without traditional financial intermediaries.
⎯ Challenges: Regulatory uncertainty, smart contract vulnerabilities, and market volatility.
⎯ Benefits: Increased access to financial services, higher interest rates for lenders, and
lower borrowing costs.

Supply Chain
Use Case: Food Traceability

⎯ Example: IBM Food Trust

⎯ Description: IBM Food Trust uses blockchain to provide end-to-end visibility and
traceability in the food supply chain, helping to ensure food safety and authenticity.
⎯ Challenges: Integration with existing supply chain systems, data accuracy, and
scalability.
⎯ Benefits: Enhanced transparency, improved food safety, reduced fraud, and faster recall
processes.

Use Case: Diamond Tracking

⎯ Example: Everledger
⎯ Description: Everledger leverages blockchain to track the provenance of diamonds,
ensuring they are conflict-free and authentic.
⎯ Challenges: Data entry accuracy, adoption by stakeholders, and maintaining data privacy.
⎯ Benefits: Increased trust and transparency in the diamond industry, reduced fraud, and
enhanced consumer confidence.

Healthcare
Use Case: Secure Health Records

⎯ Example: Medicalchain
⎯ Description: Medicalchain uses blockchain to securely store and share electronic health
records, ensuring patient data privacy and interoperability between healthcare
providers.
 ⎯ Challenges: Data privacy regulations, integration with existing healthcare IT systems,
and patient consent management.
⎯ Benefits: Enhanced data security, improved interoperability, and patient control over their
health data.

Use Case: Drug Supply Chain

⎯ Example: Chronicled’s MediLedger

⎯ Description: MediLedger uses blockchain to track the pharmaceutical supply chain,
preventing counterfeit drugs and ensuring drug authenticity.
⎯ Challenges: Adoption by pharmaceutical companies, data accuracy, and regulatory
compliance.
⎯ Benefits: Reduced counterfeit drugs, enhanced supply chain transparency, and increased
patient safety.
Sector Use Case Private/Public Value (in INR millions)

Finance Cross-border payments (Ripple) Private 500

Decentralized finance (Aave,

Finance Private 700
Compound)

Supply Chain Food traceability (IBM Food Trust) Public 300

Supply Chain Diamond tracking (Everledger) Private 200

Secure health records

Healthcare Private 150
(Medicalchain)

Drug supply chain (Chronicled’s

Healthcare Private 250
MediLedger)

Education Certificate verification (IndiaChain) Public 100

Crop insurance (Smart contracts for

Agriculture Public 200
payouts)

1. Finance
Cross-border payments (Ripple): Estimated to save banks up to 60% in transaction fees,
potentially impacting a market worth 500 million INR annually.
DeFi platforms (Aave, Compound): With increasing adoption, DeFi can significantly disrupt
traditional lending markets, estimated to impact around 700 million INR annually.

2. Supply Chain

Food traceability (IBM Food Trust): Enhancing transparency and reducing fraud can save the
food industry substantial amounts, estimated at 300 million INR annually.
Diamond tracking (Everledger): Preventing fraud and ensuring authenticity can impact the
diamond industry significantly, estimated at 200 million INR annually.

3. Healthcare

Secure health records (Medicalchain): Improving data security and interoperability can save
the healthcare sector significant administrative costs, estimated at 150 million INR annually.
Drug supply chain (MediLedger): Reducing counterfeit drugs and enhancing transparency can
save the pharmaceutical industry substantial costs, estimated at 250 million INR annually.

4. Education and Agriculture

Certificate verification (IndiaChain): Preventing fraud and simplifying verification processes

can impact the education sector, estimated at 100 million INR annually.
Crop insurance (Smart contracts): Automating insurance payouts can enhance efficiency and
reduce fraud, impacting the agriculture sector significantly, estimated at 200 million INR
annually.

Business Proposal: Enhancing Data Privacy and Security in Healthcare

Using Blockchain Technology

Summary
This proposal explores the use of blockchain technology to enhance data privacy and security
in the healthcare sector. By leveraging blockchain, healthcare providers can securely store and
manage patient health records, ensuring data integrity, privacy, and accessibility. The proposal
addresses the current challenges in healthcare data management and presents a
blockchainbased solution to mitigate these issues, thereby improving patient outcomes and
operational efficiency.

Introduction
The healthcare industry faces significant challenges in managing patient data securely and
efficiently. Data breaches, lack of interoperability, and privacy concerns are prevalent issues
that hinder the effective delivery of healthcare services. Blockchain technology offers a
decentralized and immutable ledger system that can address these challenges by providing
secure, transparent, and tamper-proof data management solutions.

Problem Statement
• Data Privacy and Security: Healthcare data breaches are a major concern, with sensitive
patient information often being compromised. Traditional data storage systems are
vulnerable to hacking and unauthorized access.
 • Interoperability: Healthcare providers use disparate systems that often do not
communicate effectively, leading to fragmented patient records and inefficiencies.
• Data Integrity: Ensuring the accuracy and completeness of patient records is critical for
effective healthcare delivery. Traditional systems are prone to errors and data
manipulation.
• Regulatory Compliance: Meeting regulatory requirements for data privacy and security,
such as HIPAA, is a complex and costly process.

Objectives
• Enhance Data Security: Implement a blockchain-based system to secure patient data
against unauthorized access and breaches.
• Improve Interoperability: Create a unified platform for seamless data sharing between
healthcare providers, enhancing coordination and patient care.
• Ensure Data Integrity: Utilize blockchain’s immutable ledger to maintain accurate and
tamper-proof patient records.
• Streamline Regulatory Compliance: Simplify compliance with data privacy regulations
through automated and transparent data management processes.

Blockchain-Based Solution
Decentralized Data Storage
• Description: Use blockchain to store patient records in a decentralized manner, ensuring
data is not held in a single, vulnerable location.
• Benefits: Enhanced security and reduced risk of data breaches.
Smart Contracts for Data Access Control
• Description: Implement smart contracts to manage permissions and access controls for
patient data. Only authorized individuals can access specific data, based on predefined
conditions.
• Benefits: Improved data privacy and controlled access, ensuring only authorized access
to sensitive information.
Interoperability Through Unified Blockchain Network
• Description: Develop a blockchain network that connects different healthcare
providers, allowing secure and seamless sharing of patient records.
• Benefits: Enhanced coordination between healthcare providers, leading to better patient
outcomes and reduced administrative burdens.
Immutable Audit Trails
• Description: Utilize blockchain’s immutable ledger to create a permanent and
tamperproof audit trail of all transactions and changes to patient records.
 • Benefits: Ensured data integrity and simplified compliance with regulatory
requirements, as every change is transparently recorded and auditable.

Implementation Plan

1. Proof of Concept (PoC)

Objective: Develop and test a prototype of the blockchain-based system in a controlled
environment. Duration: 6 months Activities:
⎯ Identify and partner with a healthcare provider to pilot the PoC.
⎯ Develop the blockchain infrastructure and smart contracts.
⎯ Test data storage, access controls, and interoperability features.

2. Pilot Deployment
Objective: Deploy the blockchain system in a live healthcare environment to evaluate its
performance and effectiveness. Duration: 12 months Activities:
⎯ Select a group of healthcare providers for the pilot.
⎯ Integrate the blockchain system with existing healthcare IT systems.
⎯ Monitor performance, gather feedback, and make necessary adjustments.

3. Full-Scale Implementation
Objective: Roll out the blockchain system across multiple healthcare providers.
Duration: 24 months Activities:
⎯ Expand the blockchain network to include additional healthcare providers.
⎯ Provide training and support to ensure smooth adoption.
⎯ Continuously monitor and improve the system based on user feedback and technological
advancements.

Challenges and Solutions

 Integration with Legacy Systems

⎯ Challenge: Integrating blockchain with existing healthcare IT systems can be complex.
⎯ Solution: Develop middleware solutions and APIs to facilitate seamless integration and
data exchange.

 User Adoption
⎯ Challenge: Resistance to change and lack of familiarity with blockchain technology.
 ⎯ Solution: Conduct comprehensive training and awareness programs to educate healthcare
providers on the benefits and usage of the blockchain system.

 Regulatory and Compliance Issues

⎯ Challenge: Navigating the regulatory landscape and ensuring compliance with data
privacy laws.
⎯ Solution: Engage with regulatory bodies early in the process to ensure the blockchain
system meets all legal and compliance requirements.

 Scalability
⎯ Challenge: Ensuring the blockchain system can handle large volumes of data and
transactions.
⎯ Solution: Use scalable blockchain platforms and technologies such as sharding and Layer
2 solutions to enhance performance.

Benefits and Impact

 Enhanced Data Security and Privacy

Secure storage and management of patient data, reducing the risk of breaches and unauthorized
access.

 Improved Interoperability
Seamless data sharing between healthcare providers, leading to better coordination and patient
care.

 Increased Data Integrity Tamper-proof records ensuring accurate and reliable patient
information.

 Regulatory Compliance
Simplified compliance with data privacy regulations through transparent and auditable data
management processes.

Conclusion
Blockchain technology has the potential to revolutionize healthcare data management by
addressing critical issues of security, interoperability, and data integrity. This proposal outlines
a comprehensive plan to implement a blockchain-based system that enhances data privacy and
security in healthcare, ultimately improving patient outcomes and operational efficiency. By
leveraging blockchain, healthcare providers can build a more secure, efficient, and
patientcentric healthcare ecosystem.