BLOCK CHAIN

UNIT-5
TECHNICAL CHALLENGES:
Key challenges for blockchain adoption The following sections consist of a breakdown of some
challenges of blockchain adoption.

Security issues
Organizations in all industry sectors will face a complicated and potentially contentious array of
difficulties, as well as new dependencies, as the blockchain ecosystem matures and additional use-
cases arise.
There are numerous problems with blockchain and security issues are among them. So, what are the
weaknesses of blockchain in terms of security?
51% attacks
Blockchain technology designs, for example, differ in architecture. Some are more secure than others.
Decentralized blockchains are, for example, more susceptible to 51% attacks than centralized ones.
This has caused a few problems for crypto enthusiasts who prefer to keep their assets on
decentralized chains. Delving a bit into the details of how 51% attacks work, they exploit an inherent
loophole in decentralized systems that allows users to control a chain by wielding over 51% of the
processing power. This usually happens on networks utilizing the proof-of-work (PoW) standard.
Low scalability and interoperability challenges in blockchain technology
Blockchain technology has evolved over the years to become more scalable as use-cases increase.
The first blockchain network was developed by Satoshi Nakamoto to underpin the Bitcoin network.
The second decentralized network was the Ethereum network founded by Vitalik Buterin.
The Ethereum blockchain was a step ahead of the Bitcoin network because of what experts refer to
as programmablemoney. Thenetwork was built to handlea largenumberof crypto transactions while
at the same time supporting decentralized applications.

Unit - V Page 1
Energy consumption blockchain challenges
The Bitcoin and Ethereum blockchain systems are among the most popular. They are, however,
energy-intensive proof-of-work systems that depend on mining to validate blocks and transactions.
The concept is a bit dilapidated, considering the amount of power that they consume.
BTC mining, alone, is estimated touseapproximately100terawatt-hoursof electricity every year. This is
more than the amount of energy used in countries such as Finland.
Low workforce availability
The blockchain industry has experienced an explosion of nonfungible tokens and DeFi projects over
the past year causing problems in the labor market. According to the latest statistics, demand for
blockchain talent has increased by over 300% as both established firms and startups scramble for top-
tier talent.
Top blue-chip firms such as Google, Amazon, Goldman Sachs, the Bank of New York Mellon
Corporation and DBS Group are already hiring blockchain specialists by the hundreds, and this is
creating a labor shortage. Other blockchain-centric companies such as Coinbase reportedly hire over
500 people per quarter.
BUSINESS MODEL CHALLENGES
The top five blockchain challenges organizations faced, according to the APQC survey, were lack of
adoption, skills gaps, trust among users, financial resources and blockchain interoperability.
While newer Gartner research from 2023 indicated that many blockchain challenges have yet to
change, it also alluded to two other common themes: the speed at which blockchain products reach
the market, and lack of regulatory clarity. Read on to explore why these blockchain challenges persist,
along with ideas on how to address them.
1. Lack of adoption
Blockchains are ecosystems that require broad adoption to work effectively. For example, track-and-
trace capabilities in supply chains not only require an organization to adopt a blockchain network but
for its suppliers to do so as well. APQC found that only 29% of organizations were piloting blockchain
or had fully deployed it.
At the time, there was hope that adoption of blockchain would grow. Organizations were coming
together and forming collaborative blockchain working groups to address common pain points and
develop solutions that could benefit everyone without revealing proprietary information.
2. Skills gap
Blockchain is still very much an emerging technology, and the skills needed to develop and use it are
in short supply. As the figure shows, 49% of respondents to the 2020 survey named the skills gap as a
top challenge. The marketplace for blockchain skills is highly competitive and has been for some time.
The expense and difficulty of talent acquisition in this area only adds to the concerns that
organizations have about adopting blockchain and integrating it with legacy systems.
3.Trust among users
Lack of trust among blockchain users is the third major obstacle to widespread implementation. This
challenge cuts in two directions: Organizations might not trust the security of the technology itself,

Unit - V Page 2
 and they might not trust other parties on a blockchain network.
In theory, every transaction in a blockchain is considered to be secure, private and verified. This is
true even though there is no central authority present to validate and verify the transactions, as the
network is decentralized.
4. Financial resources
The fourth barrier to widespread adoption of blockchain, according to APQC's research, is the lack of
financial resources. Implementing blockchain is not free, and for many organizations the pandemic
and disruption of 2020 left budgets tight. However, one other lesson learned from the pandemic is
that organizations, and IT departments in particular, can change faster than previously thought
possible.
A closer examination of this barrier shows that it is connected to an underlying lack of organizational
awareness and understanding of blockchain. APQC has found that as awareness of new technologies
becomes more widespread, the ability to effectively make a business case for their adoption
improves accordingly.
5. Blockchain interoperability
As more organizations begin adopting blockchain, many tend to develop their own systems with
varying characteristics -- governance rules, blockchain technology versions, consensus models, etc.
These separate blockchains do not work together, and there is no universal standard to enable
different networks to communicate with each other.
Blockchain interoperability includes the ability to share, see and access information across different
blockchain networks without the need for an intermediary or central authority. The lack of
interoperability can make mass adoption an almost impossible task.
6. Slow development pace
Blockchain technology is complicated. New products often require extensive research, development
and validation. For this reason, products can be slow to come to market.
Complementary and postproduction vendors, however, do not face these issues as often. Gartner
researchers surmised this is because the tools they use are more advanced.
7. Lackof regulation
According to Gartner, some blockchain vendors have indicated issues because of limited regulations
during certain parts of the process. Regardless, lack of clarity about the regulatory requirements
creates significant risk for blockchain providers and consumers.
SCANDALS AND PUBLIC PERCEPTION
SCANDALS
The Bitfinex Exchange Hack
The Hong Kong based crypto-currency trading platform Bitfinex is said to be the largest Bitcoin
exchange platform, with over 10 % of the exchanges. On 2nd August 2016 the company announced
that almost 120,000 BTC had been stolen from its platform, the equivalent of $72 million at the time.
PUBLIC PERCEPTION
The biggest drawback in the way of the success of Blockchain is the perception it holds in the eyes of
people. Firstly, people don’t see it be a part of mainstream functioning. Secondly, most of the people

Unit - V Page 3
 believe that this technology will not last long. The feature like the lack of governance, easy access to
become a member of public Blockchain and lack of regulation further deteriorates the image of
Blockchain in the eyes of people. All these factors contribute as challenges for the growth of this
Technology.
Privacy Limitations- Pseudonymity is one of the critical features of Blockchain Technology, and when
it talks about anonymity, then it means that we know that the transactions or trading is happening
from someplace, but there’s no real-world identity attached to the same. It raises the concern, what
if there is a fraud, and how will we track the person, whom to catch in case of fraud or hacking.
In case of the public Blockchain, the details of smart contracts entered by the users in the Ethereum
network become open to the public. Under such circumstances, uploading data like health records,
personal information, medical documents and identity verification, financial reports become
vulnerable to hackers attack.
Lack of Regulations And Governance
The critical feature of Blockchain Technology is that it lacks regulation. It allows peer-to- peer
transaction which means there is no intermediary. Moreover, there it also requires governance from
authorised bodies. You cannot hold anyone responsible for maintaining the network standard thus
making the entire system dicey and sceptical.
Cost to setup
The cost to setup-the developers might be preaching a lot about Blockchain Technology, but we
cannot ignore the fact that to set up the entire system of Blockchain Technology is expensive
especially if you wish to set up the whole operation in-house. Moreover, you may also need to buy
specialised hardware for use this software. Apart from the software and hardware cost find a person
to work on this system efficiently is yet another area of cost in terms of time. Since the technology is
entirely new and there are frequent changes in the same, the organisations need to spend a lot of
money in training, setting up the infrastructure and other areas of cost, thus making it a costly affair..
Huge consumption of energy
One of the important areas of concerns while using Blockchain Technology for crypto-currency
exchange is the energy it consumes. Whether it is Bitcoin or Ethereum network, to validate the
transactions they follow Proof-Of-Work mechanism which consumes a lot of energy while solving
complex mathematical problems. As per the whitepaper published in June 2017, the energy
consumers in Bitcoin network can be used by 700 average American houses. With such a large
consumption of energy, it becomes mandatory to come up with an alternative consensus mechanism
that could consume less power.
GOVERNMENT REGULATIONS
Crypto currency regulation
In the current legal landscape, VDAs in India are not expressly regulated nor prohibited. Individuals
and entities are allowed to hold, invest in, and transact VDAs, as long as they abide by existing laws.
Who regulates blockchain technology?
The Securities Exchange Board of India ("SEBI") regulates the use of blockchain technologyin capital
markets, while the Reserve Bank of India("RBI") regulates cryptocurrency, and the Insurance
Regulatory and Development Authority of India regulates insurance-related applications ("IRDAI").

Unit - V Page 4
Why there is a need to setup government regulations on blockchain and bitcoin?
One cyber-attack could result in losses for investors who have put their savings in cryptocurrencies.
Through regulations, the authorities can implement measures to help cryptocurrency investors
protect their assets. Also, investors can address concerns or reclaim their investments in case they
lose them.
These events have led to regulators scrutinising the digital asset market and its participants more
closely. Although crypto is likely to remain speculative and volatile, proper regulation could help
prevent manipulation and fraudulent activity, and offer some level of accountability and investor
protection.
What are the laws rules and regulations relating in blockchain in India?
India has not enacted any special legislation for the regulation of virtual currencies (“VCs”). However,
it has contemporised various statutes like the Companies Act, 2013, necessitating the reporting of
virtual digital assets (“VDAs”) in an effort to reflect the emerging dynamics of the financial landscape.
Taxes on Cryptocurrency:
 The Indian government has not yet created ones specific laws governing the taxation of Crypto-
cyrrency. However, crypto-currencies are generally treated the capital assets and are subject to
capital gain taxes.
 This means that any gains from the sale of crypto currency must be declared for tax purposes.
 Cryptocurrencies transitions may be subject to other taxes such as income tax and good and
services tax (GST)
 The income tax department of India has issued a statement in march 2018 that the income from
cryptocurrencies would be treated as capital gains therefore the applicable tax rate would be
depend on the holding period of the asset. For exampleif the cryptocurrencies is held for less
than 35 months the applicable rate of taxwould be 20% while if the holding period is more than
36 months it would be 10%.
Regulations Of Cryptocurrency
Crypto currency is not a lega tender in india. A legal tender is a form of payment recognized by law
that must be accepted in the settlement of a debt. Legal tender is usually a form of coin or currency
that is issued by a Government.
Sales Regulation trip to currencies are currently not regulated in India the reserve Bank of India RBI has
received warning to the public regarding potential discuss associated with cryptocurrencies and the
government has proposed a draft bill the too good ban all cryptocurrencies accept those used in
research and development additionally the supreme court of India has asked the government to
conserve regulating cryptocurrencies.
It is important to not that cryptocurrency are not recognized as a legal tender in India under subject to
capital against tax. This also means that cryptocurrency is can be used for investment and virtual
trading but it cannot be used to pay of debts are be used in banks.
Ownership and mining of cryptocurrency
The status of cryptocurrency in India is still uncertain in 2018 the reserve Bank of India(RBI) issued a
circular prohibiting banks from providing services to cryptocurrency exchange making it difficult for a
people to buy, sell or trade digital currencies. This ban was a letter over turned by the supreme court

Unit - V Page 5
of India in March 2020. This could potentially lead to the legalization of cryptocurrency India in the
near future. Although the ban has been lifted the legal status of cryptocurrencies in India remains
unclear and it is still not considered legal tender. However there is no ban owning cryptography in
India and it is not illegal to buy seller trade digital currencies.
What is Blockchain Technology?
A blockchain is a type of digital ledger technology (DLT) used to protect digital records. It is a series of
blocks or data records that record transactions grouped in a chain. Every block contains a single
transaction and they are never overwritten or deleted each one builds upon other.
The blockchain is distributed across a peer to peer network with each computer node containing it’s
own copy of the block chain. When someone makes a change to the data with a hash a unique code
that tells each block apart. Before that block is added to the chain, it’s validated by all nodes in the
network following defined algorithms.
USES OF BLOCK CHAIN IN E-GOVERNANCE
A blockchain based digital government can protect data, streamline processes, and reduce fraud,
waste, and abuse while simultaneously increasing trust and accountability. On a blockchain based
government model, individuals, businesses and governments share resources over a distributed ledger
secured using cryptography. This structure eliminates a single point of failure and inherently protects
sensitive citizen and government data.
A blockchain-based government has the potential to solve legacy pain points and enable the following
advantages:
 Secure storage of government, citizen, and business data.
 Reduction of labor-intensive processes.
 Reduction of excessive costs associated with managing accountability.
 Reduced potential for corruption and abuse.
 Increased trust in government and online civil systems.
The distributed ledger format can be leveraged to support an array of government and public sector
applications, including digital currency/payments, land registration, identity management, supply
chain traceability, health care, corporate registration, taxation, voting (elections and proxy), and legal
entities management.
LAND REGISTRATION
Challenges in the existing land registry process is The Involvement of middlemen and brokers
Middlemen and brokers are an integral part of every big business as they know more about market
offerings. Buyers and Sellers usually prefer to call them to build a full support team.As a result, buyers
acquire a deeper understanding of the market and identify lower/higher prices for the transaction.
Middlemen gather required information from traders, identify errors, interpret and facilitate the
implementation of real estate transactions. Since real estate is big business, it involves a huge number
of players, including brokers, lenders, intermediaries and local governments. It leads to additional
costs, making the entire ecosystem expensive.
The increasing number of fraud cases
There has been several cases of imposters posing as the seller of a property. If an imposter
successfully pretends as a property owner, they may receive the full amount of after completion and
escape with the funds.In many of the cases, both sellers and buyers were unaware of the fraud until
discovered by the land registry as part of a spot check exercise.

Unit - V Page 6
Time Delays
Land Registry takes a considerably long time to complete title registrations. There could be a gap of
several months between completion and registration. Many legal problems can also arise during this
long gap. For example, what if you have to serve the landlord’s notice to break a lease where
property has been sold. Such issues can make the entire process delayed and buyers have to wait for
a long time.
Human error/intervention
Currently, updates to the land registry records are made manually and the accuracy of those changes
depends on a particular individual. It means that the land registry is more vulnerable to human
errors. Human intervention can increase the chances of errors in the land registry system
Why is Blockchain Land Registry Platform a right solution?
Accelerating the Process
Middlemen involved in the land registry process hold information that we cannot access, or you
might not have the license required to operate in a property transaction ecosystem. But the
blockchain land registry platform can offer you a distributed database where any one can record and
access information without the involvement of any centralized authority. At present, the title to a
property/land is just a piece of paper. However, creating a digital title with blockchain land registry
platform can improve the process. With the blockchain’s potential to prove authenticity,
homeowners can transfer the land ownership legitimately to the buyer without needing third-party
verification.
Reducing Fraud Cases
In today’s digital world, it is now possible for imposters to forge the documents and fake the title
ownership with the editing software. Blockchain land registry platform will allow you to upload the
title documentation to the blockchain network where signers can sign the document and other users
can verify it when needed. By keeping an immutable record of transactions, blockchain can prove
that you are the owner of the land title and prevent from forgery of documents. Therefore, it can be
said that the blockchain land registry platform could serve as proof of ownership, existence, exchange
and transaction.
Bringing Transparency with Smart Contracts
There are only a few people who buy property directly. The process of loan or mortgage is
comparatively slower due to administrative issues. But smart contracts can make the process simpler
by automating verified transactions. With the blockchain land registry platform, you can create a
digital, decentralized ID as a seller and buyer. Doing so would make ownership transfer seamless and
quicker than the traditional method .As soon as the registrar confirms the transfer of land title, smart
contracts trigger to update ownership for a new buyer and transaction corresponding to it gets stored
on the blockchain. In this way, it is always possible to trace back the history of ownership records.

Unit - V Page 7
How could Blockchain Land Registry Platform work? Stake holders involved in the Blockchain Land
Registry Platform:
Buyer: A person who buys the land and uses the platform to search the property, requestaccess and
interact with the seller and get the land title ownership.
Seller: A person whosells theland and uses theplatform to manageproperties and transfer land title to
buyers.
Land inspector: A person who uses the platform to manage property requests, view reports, confirm
and initiate the transfer.
Step1: Users register to the platform
Users who either want to sell or buy properties register to the blockchain land registry platform.
They can create the profile on the platform with details like name, government-issued ID proofs and
designation. A hash for the identity information submitted by the users gets stored on the blockchain.
Step2: Sellers upload the property specifications on the platform
Sellers can upload properties’ images and documents on the platform and pin the land’s location on
the map. The transaction corresponding to the seller’s action of listing the property details is
recorded on the blockchain.
Once the property’s details are uploaded to the platform, it is made available to all users who have
signed up as a buyer
Step3: Buyers request access to the listed property
A buyer interested in any specific property can send a request to access its specification to the seller.
Sellers receive notification for property access requests. They can either deny or accept it by looking
at the buyer’s profile.
Buyers can view the previous ownership records of the property and send a request to purchase it
and initiate the transfer.
Transactions corresponding to the requests made by both sellers and buyers are recorded on the
blockchain to ensure authenticity and traceability.
Step4: Sellers approve the transfer request and land inspector gets the notification
If the seller approves the land ownership transfer request, the land inspector gets the notification to
initiate the transfer of property. Smart contracts trigger to provide land documents’ access to the
land inspector.
After the land inspector verifies the documents, they schedule the meeting for ownership transfer
with buyer and seller.
The meeting record is also added to the blockchain to solve property related disputes if occur in the
future.
Step5: Land Inspector verifies the transaction and initiates the transfer
Land inspector verifies the documents submitted by buyers and sellers and adds the authenticated
records to the blockchain land registry platform.
Sellers and buyers sign the property ownership transfer document in front of the land inspector on
the land registry platform.

Unit - V Page 8
 The signed document gets saved in the database and transaction corresponding to it is recorded on
the blockchain.
The transfer is initiated and smart contracts trigger to send funds to the seller and title’s ownership to
a new buyer
Step6: Land Registry Document Validation and Authenticity
In case of any disputes, any authorized party can upload the signed land registry document on the
platform to check its authenticity and validate it.
If hash generated after uploading the document is the same as that of the hash created at the time of
signing the document, then the document is authenticated and no modifications have been made to
the document.
LeewayHertz’s portfolio for Land Registry
LeewayHertz has successfully developed Blockchain Land Registry Platform, an application to buy and
sell properties, on the top of Hyperledger Sawtooth.

Developed on the Hyperledger Sawtooth, Land Registry is a scalable decentralized application that
enables buyers and sellers to deal directly without the involvement of intermediaries.
MEDICAL INFORMATION SYSTEMS
A Blockchain network is used in the healthcare system to preserve and exchange patient data
through hospitals, diagnostic laboratories, pharmacy firms, and physicians. Blockchain applications
can accurately identify severe mistakes and even dangerous ones in the medical field.
How Can Blockchain Be Used in Healthcare?
Blockchain's distributed ledger technology facilitates the secure transfer of patient medical records,
strengthens healthcare data defenses, manages the medicine supply chain and helps healthcare
researchers unlock genetic code.
Blockchain and Health care Data Security
Keeping medical data safe and secure is the most popular blockchain healthcare application at the
moment, which isn’t surprising. Security is a major issue in the healthcare industry. There were 692
large healthcare data breaches reported between July 2021 and June 2022. The perpetrators stole
credit card and banking information, as well as health and genomic testing records.

Unit - V Page 9
 Blockchain’s ability to keep an incorruptible and decentralized and transparent log of all patient data
makes it a technology ideal for security applications. Additionally, while blockchain is a transparent, it
is also private counseling the identify of any individual with complex and secure codes that can
protect the sensitivity of medical data. Thedecentralized nature of the technology allows page.
Doctors and healthcare providers to share the same information quickly and safely.
Ways blockchain can secure health data:
➢ Decentralized data logs that are Incorruptible and transparent.
➢ Complex codes that protect individuals identities and data.
➢ Quick transfers that reduce the window in which data is vulnerable
1. AKIRI
Location: FosterCity, California
Akiri operates in a network-as-a-service optimized specifically for a healthcare industry helping
protect transportation of patient health data. The Akira system does not store data of any kind. It
operates as a both network and a protocol to set policies and configure data layers while verifying the
sources and destinations of data in real time.
2. BURSTIQ
Location: Denver,Colorado
BurstIQ’s platform healthcare company safely and securely managed massive amount of patient data.
It’s blockchain technology enables the safe keeping, sale, sharing or licensing of data while
maintaining strict compliance with HIPAA rules.
3. MEDICALCHAIN
Location: London,England
Medical change blocks in maintenance the integrity of health records while establishing a single point
of truth.Doctors hospitals and liabilities can all request patient information that has a record of origin
and protects the patient’s identity from outside sources.
4. GUARDTIME
Location: Lausanne, Switzerland
God time is helping healthcare companies and governments implement blockchain in their cyber-
security methods. The company was vital in helping implement blockchain in Estonia’s healthcare
systems, And eat signed a deal with a private healthcare provider in the United Arab Emirates to
bring blocks on to its data privacy systems.
5. PATIENTORY
Location: Atlanta,Georgia
Patientory’s end-to-end encryption ensures that patient data is shared safely and efficiently. The
company’s platform enables patients, healthcare providers and clinicians to access and store all
transfer all important information via blockchain. Patientory helps the healthcare industry move
more quickly by housing all patient information under 1 roof.

Unit - V Page 10