BLOCKCHAIN TECHNOLOGY

BY

AMAECHI EMMANUEL NNAEMEKA

2017/111937/REGULAR

A SEMINAR WORK SUBMITED TO THE DEPARTMENT OF

COMPUTER ENGINEERING
FACULTY OF ENGINEERING
ABIA STATE UNIVERSITY, UTURU

IN PARTIAL FULFILLMENT OF THE AWARD OF BACHELOR’S DEGREE IN ENGINEERING (B.Eng.)

April, 2023.
 DEDICATION

I dedicate this work to God almighty my creator, my strong pilar, my source of inspiration, wisdom, knowledge
and understanding. He has been the source of my strength throughout this program and on his wings only have I
soared.
I also dedicate this to my parents and my lovely sister who encouraged me all the way and whose encouragement
have made sure that I give it all it takes to be go this far in what I have started. May the blessings of the almighty
God be with them now and always “Amen”
 ACKNOWLEDGEMENT

First and foremost, my deepest acknowledgement goes to God Almighty, for his overwhelming love upon
my life, without his guidance, love and support, I would not be alive.

I vigorously express my appreciation to Engr. Umebali my seminar supervisor, Engr. Duruoha, Engr
Onuoha, Engr. Francis, and to all the lecturers of Computer Engineering in Abia State University Uturu, I
say an utmost well done for the good discipline and knowledge they have impacted in me.

I appreciate my parents, Mr. and Mrs. Ogbunaude, John Amaechi, my in-Law, Dr. Christopher
Ibebuike .C, my best friend Francis, Charles Uchenna and my cousin brother Engr. Nwachukwu,
Daberechi Matthew for their constant advice and support, especially my Boss, Mr. Chuks Offor, C. who
took my placement overly personal to make sure I got placed at an Institution I would benefit a lot from.
 ABSTRACT

A blockchain is essentially a distributed database of records or public ledger of all transactions or digital
events that have been executed and shared among participating parties. Each transaction in the public
ledger is verified by consensus of a majority of the participants in the system. And, once entered,
information can never be erased. The blockchain contains a certain and verifiable record of every single
transaction ever made. Bitcoin, the decentralized peer­to­peer digital currency, is the most popular example
that uses blockchain technology. The digital currency bitcoin itself is highly controversial but the
underlying blockchain technology has worked flawlessly and found wide range of applications in both
financial and non­financial world.
 CHAPTER ONE
INTRODUCTION

A blockchain is essentially a distributed database of records or public ledger of all

transactions or digital events that have been executed and shared among participating
parties. Each transaction in the public ledger is verified by consensus of a majority of
the participants in the system. And, once entered, information can never be erased. The
blockchain contains a certain and verifiable record of every single transaction ever
made. To use a basic analogy, it is easy to steal a cookie from a cookie jar, kept in a
secluded place than stealing the cookie from a cookie jar kept in a market place, being
 TWO
LITRATURE REVIEW
Blockchain is a new technology with strong implications for the future of how we exchange information
and currency as a globally networked society. It is so new that there is relatively little academic work
done on it, but this is changing quickly. For this literature review, we have begun by collecting a sample
of primarily peer-reviewed sources, as well as an informative overview of articles from various other
channels.
2.1 BlockChain Technology
2.1.1 Short History of Bitcoin
In year 2008, an individual or group writing under the name of Satoshi Nakamoto published a paper entitled
“Bitcoin: A Peer-To-Peer Electronic Cash System”. This paper described a peer-to-peer version of the electronic cash
that would allow online payments to be sent directly from one party to another without going through a financial
institution. Bitcoin was the first realization of this concept. Now word cryptocurrencies are the label that is used to
describe all networks and mediums of exchange that uses cryptography to secure transactions-as against those
 2.1.2Blockchain Technology: How does it work?
We explain the concept of the blockchain by explaining
how Bitcoin works since it is intrinsically linked to the
Bitcoin. However, the blockchain technology is
applicable to any digital asset transaction exchanged
online.
 CHAPTER THREE

Existing Market

Blockchain technology is finding applications in both financial and non-financial areas that traditionally
relied on a third trusted online entity to validate and safeguard online transactions of digital assets. There
was another application “Smart Contracts” that was invented in year 1994 by Nick Szabo. It was a great
idea to automatically execute contracts between participating parties. However, it did not find usage until
the notion of crypto currencies or programmable payments came into existence. Now two programs
blockchain and smart contract can work together to trigger payments when a pre-programmed condition
of a contractual agreement is triggered. Smart Contracts are really the killer application of the
cryptocurrency world.
Currently there are three approaches in Industry to support other applications
and also to overcome perceived limitations of Bitcoin blockchain:

Alternative Blockchains is a system of using the blockchain algorithm to

achieve distributed​consensus on a particular digital asset.

Colored Coins is an open-source protocol that describes class of methods

for developers to create digital assets on top of Bitcoin blockchain by using
its functionalities beyond digital currency.

Sidechains are alternative blockchains which are backed by Bitcoins via

Bitcoin contract--just as​dollars and pounds used to be backed by Gold. One
can possibly have a thousand of sidechains “pegged” to Bitcoin, all with
different characteristics and purposes--all of them taking advantage of
scarcity and resilience guaranteed by the Bitcoin blockchain
 CHAPTER FOUR

Applications of Technology Compelling Use Cases in both Financial and

Nonfinancial Areas

4.1 Financial Applications:

Private Securities
It is very expensive to take a company public. A syndicate of banks must work to underwrite the deal and attract
investors. The stock exchanges list company shares for secondary market to function securely with trades settling and
clearing in a timely manner. It is now theoretically possible for companies to directly issue the shares via the
blockchain

NASDAQ Private Equity: NASDAQ launched its Private Equity Exchange in 2014​6. This is meant to provide the key
functionalities like Cap table and investor relationship management for the pre-IPO or private companies

Medici is being developed as a securities exchange that uses the Counterparty​ implementations of Bitcoin 2.0. The
goal here is to create a cutting-edge stock market
 4.2 Nonfinancial Applications:

Notary Public
Verifying authenticity of the document can be done using blockchain and eliminates
the need for centralized authority
Stampery​is a company which can stamp email or any files using blockchain. It simplifies certifying of
emails by just emailing them to an email specifically created for each customer.

Block Notary​ is an iOS app which helps you to create proof of existence of any
content (photo, files, any media) using TestNet3 or Bitcoin network.
4.3 APPLICATIONS OF BLOCKCHAIN IN THE MUSIC INDUSTRY
The music industry has gone a big change in last decade due to the growth of Internet
and availability of a number of streaming services over the Internet
 FIVE

Risks for Adoption

BlockChain is a promising breakthrough technology. As we described before, there are vast array of
applications or problems that can be solved using BlockChain based technology. That spans from
Financial (remittance to investment banking) to non-financial applications like Notary services. Most of
these are radical innovations. As it happens with adoption with radical innovations, there are significant
risks of adoption.
Behaviour Change: Change is constant, but there is resistance to change. In the world of a non-tangible
trusted third party, that BlockChain presents, customers need to get used to the fact that their electronic
transactions are safe, secured and complete. The present-day intermediaries like Visa or Mastercard (in
case of a credit cards) will also go through change roles and responsibility
 Scaling: Scaling of the current nascent services based on BlockChain presents a challenge. Imagine
yourself executing a BlockChain transaction for the first time.
Bootstrapping: Moving the existing contracts or business documents/frameworks to the new BlockChain
based methodology presents a significant set of migration tasks that need to be executed.
Government Regulations: In the new world of BlockChain-based transactions, Government agencies like
FTC, SEC, etc may slow down the adoption by introducing new laws to monitor and regulate the industry
for compliance.
Fraudulent Activities: Given the pseudonymous nature of BlockChain transactions, coupled with ease of
moving valuables, the bad guys may misuse this for fraudulent activities like money trafficking
Quantum Computing: The basis of BlockChain technology relies on the very fact that it is
mathematically impossible for a single party to game the system due to lack of needed compute power.
 SIX

Corporate Funding & Interest

In 2015, the bitcoin currency has reached yearly highs in both volume and price over the course of
September-October. The digital currency is gaining traction both in the consumer marketplace, as a
tradeable security, and with regulators. It isn't just digital-currency enthusiasts that are bullish. Equity
research firm Wedbush expects it to rise to $600 because of the growing adoption.

This enthusiasm may be because of the large quantities of capital being injected into the digital infrastructure.
Excitement grows as Bitcoin and blockchain firms have received a record US$1 Billion in investments as the year
comes to an end. American
Express, Bain Capital, Deloitte, Goldman Sachs, MasterCard, the New York Life Insurance Company, the New York
Stock Exchange -- all of them have poured millions of dollars into Bitcoin firms recently.
 SEVEN

Conclusions

To conclude, Blockchain is the technology backbone of Bitcoin. The distributed ledger functionality coupled with
security of BlockChain, makes it very attractive technology to solve the current Financial as well as non-financial
business problems.

As far as the technology is concerned, the cryptocurrency-based tech is either in the downward slope of inflated
expectations or in trough of disillusionment as shown in Figure 9 below