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Blockchain technology emerged in 2008 when it was formally introduced to the world in Satoshi Nakamoto’s whitepaper on Bitcoin[1]. The whitepaper can be accessed at the following link: . Bitcoin is the first known application of a public blockchain, having received significant attention and adoption. Consequently, despite being just one application of the blockchain technology, people frequently mix up the two as the same thing. Another reason for the confusion in terminology is because the cryptographic protocol involved in the blockchain is called the Bitcoin protocol. Further, because the Bitcoin protocol results in a token incentive system, it can be argued that "blockchain and Bitcoin are intimately intertwined" [2]. This viewpoint appreciates that, even with applications that extend beyond payment uses, the blockchain system will require some sort of incentive system (like token rewards) for the nodes to participate in the authentication process.

Wikipedia’s current page on blockchain[3] is lacking in information which is likely due to the uncertainty surrounding the topic, relative infancy of the technology and the overshadowing of Bitcoin. Addressing the double-spending problem is only one of the significant offerings of blockchain technology. As more people learn and understand how the blockchain works and the benefits and solutions it offers from a utilitarian perspective, the more clear it will become how disruptive the technology is and the impact it will have on people globally [4].Those in doubt or questioning the longevity and application of blockchain should observe the interest being drawn from governments and industry-leading businesses as a means of reducing transaction costs and risks associated with fraud [5].


What is Blockchain Technology?

Blockchain technology entails using an (often publicly) shared database which permanently records transactions chronologically. Since the exchanges of value being traded (Bitcoin, Ether, LiteCoin, and other cryptocurrencies) are described as “transactions,” the blockchain database is often referred to as a ledger.

It is important to note that a blockchain can be designed for public and private use. Bitcoin is an example of a public blockchain which allows anyone connected to the network to read and write data. For this Wiki we will focus on public blockchains due to the technologies required to ensure the information and data being exchanged and stored is accurate. Private blockchains do not require the same amount of cryptography because the participants are usually known, approved and trusted [6].

The hype surrounding blockchain extends beyond the financial payment application seen in Bitcoin. The technology has the potential to be applied to several industries. This is becoming increasingly relevant as we see the expansion of web applications enhancing and disrupting industries where assets or information are being traded: finance, education and government sectors [7]. The growth in adoption of Bitcoin, the research efforts and the potential of blockchain technology are all arguments that the blockchain technology still has a lot of uncertainty surrounding its trustworthiness as a true substitute; however, blockchain technology is still in its infancy, continually being explored for its potential uses and ways to implement it.

How the blockchain is changing money and business

The Double-Spending Problem

The need for blockchain technology and the associated encryption arose with the problem that has been coined the term the double-spending problem. This phenomenon became evident with the rise of Internet applications like engaging in trade through online marketplaces. The double-spending problem refers to the importance of ensuring digital assets or currencies cannot be replicated or used more than once [1]. In Don Tapscott's TEDTalk (see left) [2] on the blockchain, he explains how the feature of digital assets being infinitely copyable is an excellent thing in some cases like intentional and permitted knowledge-sharing. However in some scenarios, like virtual currency transfers, in order to uphold the value of that currency, it is vital that the currency exchanged in a transaction can no longer be accessed by the sender after the transaction is complete.

How Does It Work?

Mutual Distrust

A blockchain database is usually open-source like the Internet; anyone can join the public network. All the computers around the world which are connected to a blockchain’s network are called nodes and they all have a copy of the entire blockchain. One of the most important jobs of the nodes is to continuously monitor and validate ongoing transactions to update the ledger in real-time, or as close to as possible. For a transaction to be approved, a majority of nodes must agree on the details, for example the balances of the accounts and the time-stamp associated with the proposed transaction. Once the transaction is approved it becomes permanently part of the ledger and the account details (like balance) are updated so that all nodes reflect the new transaction. Due to the permanence of transactions, it is extremely difficult and increasingly impossible to corrupt or make fraudulent transactions without transferring legitimate virtual assets. In her TEDTalk [3], Bettina Warburg argues the disruptive change blockchain will have on how our economy functions is driven by the mutual distrust our society has in the system: institutions and in general. Some argue that this is why Nakamoto's introduction of the blockchain technology for Bitcoin surfaced in 2008 after the financial collapse, portraying the flaws in our current system and a need for a new solution that eliminates the potential for the human element of corruption and bias.

Proof of Work & Tokenized Incentives: The Backbone of the System

One analogy used to describe the blockchain is a book and it's pages. As seen on the figure to the right, each block on a blockchain has it's unique "fingerprint," like the page number of a book, that references a previous block (or page number). This helps ensure the immutability and permanence of transactions on the blockchain since any attempt to change a historical transaction would raise flags on majority of the computers partaking in the consensus system.

All the nodes that are connected to a network play a vital role not only in verifying transactions and updating the ledger, but also in creating the cryptocurrency being used on the network. To incentivize the nodes (powerful computers) who maintain the legitimacy of a blockchain, the verification process to create a new block on the chain requires the computers to compete – often called mining – to solve increasingly complex algorithms also known as proof of work (POW) [4]. The algorithms used are cryptographic hash functions and the most widely used hash algorithm for blockchain is SHA-256 [5]. For more information on encryption, visit the following link: [6]. The solution to these algorithms results in a number that will hash to the block-being-competed-for's transactions [4]. The node which achieves in hashing to the block is rewarded by receiving the right to add the block to the blockchain and and is rewarded all the fees from the transactions in that block in addition to a reward which is equivalent to the new creation of the cryptocurrency being used on that blockchain (Bitcoin, Ether, Litecoin, Ripple, Dogecoin, etc)[7]. Only once the block has been mined and added to the blockchain are all the transactions on that block authenticated and become part of the blockchain database (ledger).

What Non-Miner Users Need

Unlike conventional bookkeeping processes, each transaction on a blockchain is recorded as one single transaction, with x amount of value being transferred from one address, also known as a virtual wallet, to another. There are several companies offering virtual wallet applications to store virtual currencies and exchange funds with legal tender (ie. USD, CAD) [8]. Status, is a company aiming to make a more user-friendly interface for blockchain users extending beyond financial applications [9]. Although it will only be launching an alpha release in the near future, the Ethereum-based mobile wallet aims to mimic the popular WeChat interface. To learn more about WeChat visit the following Wiki: [10] .

The Growth of Blockchain

As attention shifts beyond Bitcoin, there is an increased focus on how blockchain technology can significantly impact how people work, participate in trade and ultimately live. Blockchain can be divided into three parts: Blockchain 1.0, 2.0 and 3.0 [11]. Blockchain 1.0 refers to the digital cryptocurrencies and payment systems like Bitcoin. Blockchain 2.0 exceeds basic virtual currency transactions using smart contracts that incorporate details to address more complex trade for market, economic and financial applications. Some examples of blockchain 2.0 would be using the technology to integrate transactions involving loans, mortgages, land titles and the Internet of Things (IoT) which would all rely on certain conditions in the contract on how the transaction is executed and enforced [11]. It is predicted that the usage and combination of multiple applications will drastically impact the sharing economy. According to a McKinsey Quarterly article [12], the anticipated growth of the sharing economy is projected to "reach 335 billion globally by 2025. Blockchain is the epitome of the sharing economy. It is difficult to dispute how fine-tuned smart-contract platforms won't experience growth by offering the target market of the sharing economy a superior alternative. Blockchain will further empower users beyond existing sharing platforms like Airbnb and Uber who still act as intermediaries charging transactional costs resulting in high privately-owned corporate profits [2]. Blockchains decentralized structure represents true community and member ownership because by its design it functions on behalf of the majority and cannot be controlled by individual parties.

Key Characteristics and Advantages of Blockchain

Blockchain technology offers several advantages that can disrupt and revolutionize the way our world works.

Decentralized Control & Disintermediation

Blockchain offers a reliable solution to lowering, (in some cases, abolishing) the high transaction costs of trading in today’s world. The cryptographic protocol ensures that the ledger is not managed by any single party or intermediary, but rather mutually maintained by the entire community of users and nodes functioning in a peer-to-peer way. Without intermediaries, transaction costs can be lower or even eliminated. The complications involving multiple ledgers are also removed because a blockchain's strength is in only using a single ledger. Although the data is essentially grouped together in a centralized fashion, it is distributed among all the users, resulting in a group consensus replacing the previous need for an intermediaries to verify and enforce transactions. These transactions can be cleared and settled extremely quickly relative to current interbank transaction times. They would also no longer rely on conventional business constraints like time and business operating hours, allowing transactions to be made and processed at any time.

Reliable & Robust

Branching off the concept of decentralization, the nodes on the network acting as administrators ensures that there is zero influence from governments, corporations, institutions, or anyone else with potential for selfish motive. The proof of work necessary to validate transactions and upload them to the ledger results in an ongoing trustless consensus of the state of the blockchain. The blockchain technology can be very dynamic, with different protocols addressing different needs for a variety of transactions. Vitalik Buterin emphasizes how Ethereum really focused on the effectiveness and cost efficiency of applications [13]; it is very easy to distribute the technology, the necessary updates and changes to a system quickly and affordably since the only cost is developing the code.

Cryptographically Secure: Trusted Computing & Trustless Transactions

Blockchain technology offers a more secure way to store data on the ledger. When new transactions are initiated, all the computers in the network verify all previous transaction to validate that the transaction is indeed in consensus with the rest of the ledger. Therefore, a fraudulent entries of data or attempts to corrupt the system are addressed by the blockchain because without a network consensus, entries on the public ledger are considered invalid. The risks of fraud and tampering are reduced because altering any block of information on the blockchain would mean using a huge amount of computing power to override the entire network’s consensus of that data [4] The distributed nature of the blockchain network maintains data integrity and security. As blockchain has no single point of control, it also has no single point of failure.

Transparent, Permanent & Immutable

Data transparency is a big advantage of blockchain technology. All activities in the blockchain ledger can be monitored in real time by the public, thereby increasing market transparency and helping mitigate fraudulent behaviour. The distributed network of a blockchain ensures that the data is symmetric and immutable: the transactions cannot be deleted or altered [14]. Previously, our approach has been to protect information knowledge and assets by keeping unwanted parties out, however this can prove an issue for corrupted individuals who are trusted or have access to manipulate or take advantage of the system. The decentralized and distributed properties help assure there is no single point of failure that could result in corruption of the system. [15]. Technology and the code behind smart contracts executing code can be verified by users and they can rest assured that no human element or temptation will corrupt transactions or the system. The peer-to-peer and cryptography features in blockchain establish a new trust in computation.

Overall Efficiency

The elements of the blockchain result in faster transaction processing in addition to the lower transaction costs associated with transactions. Uncertainty in a system or procedure results in increased costs in time and energy; all the benefits discussed are appealing to society by making life easier overall.

Drawbacks and Disadvantages of Blockchain

Although blockchain offers a variety of benefits there still exists limitations of using blockchain and barriers to its adoption.

Complexity & Legal Uncertainty

One issue with blockchain is the complexity of the underlying technology and how the system is powered. The uncertainty, a lack of awareness and understanding, of how the technology is used prevents people from integrating it into their everyday lives. People might be resistant to change and not trust blockchain technology. Many industries rely on trusted intermediaries and adapting to this new technology will certainly be time consuming. Historically we have relied on institutions like governments to regulate and control trade and currencies used. The grey area of blockchain's legal implications is a big barrier for large corporations and institutions who are traditionally risk averse. [14].


All records in the blockchain network are immutable. This is can be viewed as a benefit and a drawback. While it increases transparency in transactions it also can raise privacy-related concerns. Although groups are working to address the need to protect privacy and sensitive information with encryption functions, code generated by humans has highlighted that there flaws in cybersecurity still exist. In order to achieve mass adoption, developers must focus on solidifying encryption features for dynamic applications so users can trust storing and sending sensitive information using the blockchain.

Need for Mass Adoption

As a disruptive technology, the adoption of blockchain may prove very difficult and slow. If consumers and society in general do not embrace blockchain technology and utilize it, corporations may not have the incentive to implement it into their business. Transitioning from legacy computer systems and creating new business practices for blockchain driven environments could be expensive and this would further delay the adoption of using blockchain. Additionally, those in power, many of whom enjoy monopolistic power, are likely to lose a degree of power with the adoption of blockchain technology due to its democratic and peer-to-peer attributes. The potential for some business offerings to become obsolete will support the resistance and backlash in appreciating what the technology has to offer.

Approach Going Forward

Tackling all the drawbacks of blockchains current status isn't an easy task. It is imperative that developers continue to find ways to strengthen the system and remind society how the potential use cases will drastically benefit future generations. The notion of innovation and inevitable change are also powerful messages to push those resistant to such disruptive change.

Bitcoin (Blockchain 1.0)

Bitcoin was the widespread introduction of blockchain technology. A reminder to those seeking an in-depth explanation of Bitcoin can visit the whitepaper published by Satoshi Nakamoto [16]. As previously discussed, Bitcoin confusion arises due to the term being applied in three different ways: as a substitute for blockchain (the underlying technology and primary topic in this Wiki), as the protocol (POW) used to execute or authenticate transactions (used in the software system) and as a currency, often represented by the symbol BTC for Bitcoin [11].

Overview of Bitcoin

In brief, Bitcoin is a digital currency which uses the functions encryption techniques found in blockchain technology. The technology is used to verify that transactions are valid prior to updating the validity of transactions, while regulating the creation of the cryptocurrency being used. Bitcoin is also an open network, which means that each transaction is verified collectively before the blocks are created. When a transaction is made it is broadcasted to the network where bitcoin miners work to approve the transaction. Once its verified it gets stored and updated in the blockchain on a block. Bitcoin blocks are created every ten minutes consisting all the transactions that existed during that ten minute interval. Mining bitcoins involves using computer processing power to solve proof-of-work (POW) problems. When the block is validated it links to the previous block and the chain grows in length. The node which completes the POW process first is rewarded with the transaction fees of all the transactions plus a reward, all of which are in the form of Bitcoin for the Bitcoin blockchain. The blocks created by the nodes of a distributed system make up the transaction record of the Bitcoin system which are permanent and cannot be altered. Yes, every transaction that has ever existed and contributed to the state of the system can be accessed on the public database by query searching a specific address (virtual wallet)[17], however specific details of the transaction are likely to require a private key. In essence, transactions can be encrypted with a public key and decrypted with private keys.

Bitcoin Issues

Bitcoin still faces adoption issues which some argue is because it isn't appealing enough to the general public. [18].Despite billions of dollars invested in Bitcoin, the platform is still far away from where it aims to be as a currency replacement. Another problem is that the primary use of Bitcoin is for conducting illicit transactions and financial speculation which do not contribute to the potential value creation the blockchain technology boasts. Another argument for lack of application meeting the hype raised by the technology is that Bitcoin perhaps doesn’t solve enough problems “regular” people face.

Other Cryptocurrencies

Below is just a small sample of other cryptocurrencies who are applying blockchain technology to create new platforms, resulting in generating alternative cryptocurrencies:

Cryptocurrency Symbol
Monero File:monero.png
Ether File:Ether.png
Litecoin File:Litecoin.jpeg
Ripple File:Ripple.jpg
Dogecoin File:Dogecoin.png
Dash File:Dash.png
BlackCoin File:Blackcoin.jpeg
NameCoin File:Namecoin.jpeg
PeerCoin File:Peercoin.jpeg
PrimeCoin File:Primecoin.png

At the moment, among these cryptocurrencies the ones receiving the most attention are Ether (on the Ethereum blockchain) and Monero (on the Monero blockchain).

Monero differentiates itself by focusing on absolute transaction privacy of financial payments [19].

The Ethereum platform is one of the first platforms to address users needs beyond financial applications in the form of smart contracts. More information on Ethereum and its cryptocurrency Ether is explained below.

Ethereum & Smart Contracts (Blockchain 2.0)

What is Ethereum?

Ethereum is a relatively new decentralized platform that is designed to let users write and use decentralized applications, also known as Dapps, by using blockchain technology. Examples of some of the projects (Dapps) being built on the Ethereum platform can be seen at following link: Ethereum recognized that there was a community of developers and users who could benefit from a platform that employed smart contracts to execute applications of blockchain extending beyond the limits of Bitcoin. In 2013, co-founder Vitalik Buterin proposed the concept of an open-source platform that would have a built-in programming language allowing people to develop and use custom applications that take advantage of blockchain technology and its benefits [20]. In short, Ethereum is a blockchain platform with the necessary infrastructure to become the primary universal blockchain development platform by offering all the tools necessary to develop and use custom applications. Further, with increased customization, there is the ability to control specific details of how the contracts operate when they are called upon; for example, how the value are stored, transferred, restrictions and any other custom conditions[21]. The increased customization of applying specific conditions with these smart contracts (versus ordinary transactions of simply transferring value) highlights the huge potential of Ethereum (and smart contracts). For example, when digital cash or assets are transferred per instructions made in the past, like a will, the terms can be executed efficiently and appropriately as the code . As we digitize our information and assets, a platform like Ethereum will be imperative for users to have security and peace-of-mind.

How Does the Ethereum Protocol Work?

After understanding how the Bitcoin protocol worked, developers became interested in further applications of blockchain technology. Vitalik Buterin explained [13] how several groups were researching and studying how to develop decentralized platforms that would include a multitude of features or applications requiring the transferring and storage of digital assets. Hypothetical examples of applications included

  • Asset Issuance
  • Crowd Funding
  • Bets
  • Prediction Markets
  • Identity Registration
  • Title Registration

The consensual approach was to develop a protocol system where a specific piece would address each feature or application. For instance, a platform with a ledger that could process 10 different applications would have 10 different pieces of protocol. And companies were attempting to create these protocols in 2013. However, the problem was when developers wanted to add a new application to the protocol, this proved to be extremely hard and costly [13].


Ether is the cryptocurrency – also known as gas – used to fuel transactions on the Ethereum platform [22]. Ether is necessary for anyone who wants to write or interact with smart contracts (applications) on the Ethereum platform. Like the cryptocurrency Bitcoin, Ether is used to incentivize nodes (computers on the network) to participate in verifying and validating the state of the Ethereum ledger in order to maintain the trustless consensus system. Another similarity to Bitcoin is the way Ether is generated or mined. Computers on the network are rewarded for creating blocks on the Ethereum blockchain. On average, a block is created every 12 seconds by a computer that has generated the necessary proof-of-work. [13]

Problems Facing Ethereum & Hardforks

Because Ethereum is attempting to offer multiple applications using smart contracts as a dynamic platform, the elements in the design and code naturally have more areas for vulnerability. The Ethereum platform is still undergoing an ongoing process of polishing and addressing glitches, issues and weaknesses. The most evident problems Ethereum has dealt with have resulted in hardforks which is a term that describes when the blockchain "splits" and the nodes are no-longer in consensus; this lack of consensus is a result from an update in the protocol being used for whatever reasons the developers find necessary [23]. Since the inception of Ethereum, there have been four significant hardforks and a fifth is underway [24]. Fortunately there is a silver-lining of hardforks; although they cause a lot of disruption and require users update to the newest client, the hardforks result in an improved system to solve prevailing issues. Critics of Ethereum, many of whom are Bitcoin supporters and likely investors, maintain that the attacks on the Ethereum system resulting in hardforks are symbols of weakness.

Ethereum is leading the blockchain applicational use by attempting to address the constraints of platform's like the Bitcoin blockchain, which can only address one application and do not provide the infrastructure to enable users to create applications using code. The technological term which describes this capability is called turing completeness. As the skilled team of developers behind Ethereum strengthen their blockchain to address issues which have led to hardforks, the dynamic and open-source functionalities will prove very powerful.

Current Applications and Implications

Financial and Capital Market Industries

Blockchain is a disruptive technology and is able to offer new financial solutions for businesses:

Business Potential with Blockchain:

  • Finance
  • Healthcare
  • Online Music
  • Real Estate
  • Supply Chain Management

5 Key Components of the Finance & Capital Market Within Blockchain

  • Global Payment (Cross Border Settlement)
  • Insurance Business
  • Lending Business (P2P Lending Model)
  • Capital Raising Business (Crowdfunding)
  • Asset Management

Global Payment Business (Cross Border Settlement)

  • current business model: Business-to-Business
  • current business solution: SWIFT (society for worldwide interbank financial telecommunication)
  • current each transaction fee: 30-40 USD
  • current time each transaction needs: at least 24 hours


Global Payment business process difference (Non intermediation and with intermediation) [25]

How Blockchain Will Benefit the Global Payment Industry (Cross Border Settlement)

Based on current outdated business process of global payment business, more and more companies are trying to find a new business solution for faster and lower cost. Blockchain can offer and satisfy what these companies need.

With blockchain`s technical advantages, global payment business (cross border settlement) has business evolution. Now, cross border settlement process does not need central intermediation to operate transactions. therefore, global payment companies can charge less fee to their customers. Meanwhile, with blockchain`s real-time and immutability, the two features, these companies do have faster transaction process and higher accuracy to transaction information tracking.


Ripple is a global payment company which is developing blockchain technology to improve their performance of business processes. Based on their report [26], they will cut global settlement costs up to 60%, allowing banks to transact directly, instantly and reduce liquidity requirements. File:Internation payment cost.png

How the Blockchain Can Benefit the Insurance Industry

Currently, the insurance industry is facing 3 key challenges, which are growth of insurance fraud, outdated and complicated claims processes, and the inflexible insurance fee calculation process.

A statistic report from FBI claimed: costs of insurance fraud in the USA is about $40 billion per year [27].

Using blockchain technology, insurance businesses can achieve improvements. By employing smart contract functions, insurance businesses and users can take advantage of a transparent, reliable and more accurate way of dealing with customers and insurers by easily and automatically tracking and recording relevant insurance contract details by simply accessing individual's files with transaction details using appropriate access keys. Further, contracts and claim information will be recorded on the blockchain. Permanent, accurate and frequently updated records can help prevent insurance fraud and benefit insurers and users. The application of blockchain technology in the insurance industry will improve process efficiency and save operational cost and time for both parties, ultimately decreasing the overall fees and costs associated with insurance.

How Blockchain Can Improve Accessing and Issuing Loans (P2P Lending Model)

Current lending business process is using traditional methods with interbank. Banks receive money from account holders, and invest accordingly, often through loans, such as mortgages, to borrowers. The bank then charges a higher interest rate from the borrowers, and offers a lesser return to the account holders or investors.

Based on current business process in lending business. the issues is the business process is slow, complicated and strict. Because bank, as a intermediation, they need to charge fee to borrowers and long time loan approval for each lending request. That business process drives up operational costs and lowers efficiency.

Now, lending business with blockchain, there is no bank intermediation in lending business process. lenders and borrowers do not need to pay for bank. both parties have more autonomy in their deal. Meanwhile, lender can get higher interest. Borrowers can save time and cost to get money from lender. Blockchain can simplify lending process and to provide transparent and reliable p2p lending information tracking and higher efficiency.

How Blockchain Will Benefit Crowdfunding

There is arguably exists hesitation surrounding the current crowdfunding models:

  • Crowdfunding uncertainty and fraud
  • No standardized mechanism
  • Low reliability and transparency

Crowdfunding can benefit from blockchain technology in 3 main ways:

  • Based on smart contract of blockchain, blockchain can help establish standardization mechanism for crowdfunding business
  • Based on reliability and transparency of blockchain, blockchain can help build higher level of mutual trust crowdfunding mechanism
  • Based on immutability of blockchain, blockchain can help track crowdfunded assets record efficiently and timely.

How blockchain runs in asset management for business

How Blockchain Will Benefit Asset Management

Asset management is an over-complicated process that has high operational costs and labor costs in daily business operations. Because asset management has a significant amount of information and detail requiring attention, the associated business processes can be very time-consuming and costly.

How blockchain can improve asset management and fix issues of asset management? Based on blockchain`s technical advantages, lower operational cost and labor cost are 2 primary benefits that blockchain can provide to asset management.

Blockchain can create a block for each component of asset management. For example, accounting has its unique block for storing accounting information. And the block is transparent, information within the block is immutable. And accounting information will be automatically recorded on the block. Namely, blockchain can provide efficient process to manage the information, and improve business performance for higher asset return rate. Meanwhile, because of high security function, real-time function and immutability function, blockchain can improve risk management for asset management.

Supply Chain Management

Current State of Supply Chain

The current supply chain is made up of a few different parties such as the supplier, manufacturer, distributor/wholesaler, retailer and the consumer. With the current supply chain, even though it may be efficient in its current state, the different parties that make up the supply chain are still looking for bigger profit margins, lower costs, and overall cutting out the middle man. Furthermore, the different parties that make up the currently supply chain are not happy with how it currently works. The main problem with the current supply chain is that there is not even transparency among each of the different parties. For example, the manufactures does not know whether the supplier is obtaining their raw materials ethically. They also do not know if child labor was used or whether health and safety procedures were followed. While the current supply chain although it is efficient there is always room for improvement, which is where block chain and the supply chain can be combined for increase efficiency. We will touch more upon how block chain will benefit supply chain later on.

Traditional Supply Chain (Consumer Perspective)

The traditional supply chain that we have right now, as we know is not very transparent. This is further emphasized from the consumer standpoint. Let’s take a step back and think about the transaction between a consumer and the retailer. Usually after a transaction is taken place, the consumer is provided a receipt for a conformation of purchase as well as later on a tracking number for the package. However, aside from those two pieces of information the consumer does not know about the origins of his product or how his product was created. With the tracking number provided he might be able to see which warehouse the product is coming from but no other information is provided. With blockchain and the supply chain being combined, anybody who is part of the blockchain which includes the consumer is now able to see the origins and the creation process of the product.

Combining Blockchain and the Traditional Supply Chain

Imagine a system that is all interconnected, where everyone who is part of the system is able to view what everyone else is doing and how they are doing it. The interconnected system that we are describing here is the blockchain that is going to be connected with the supply chain. To illustrate this example lets image that we are consumer who will be leasing a car in the near future. The first party of my supply chain will be the government who are in charge of creating a smart contract with all the other parties in the blockchain on what can and cannot be done to the car. This contract will create our very first block on the blockchain in regards to this car leasing example. The government will create the registration and transfer the registration to the second party in the blockchain, the manufacturer. The manufacturer will still producing the cars and stamp the cars with their vehicle identification numbers which is then uploaded as a block onto the blockchain where it is verified and then permanently part of our ledger. The third party of the blockchain here, the car dealer ship, is able to see what cars the manufacturer is producing and can plan ahead by selling the car lease company the available inventory that the car manufacturer is in the process of creating. The process of selling the car from the manufacturer to the car dealer and from the car dealer ship to the leasing company all create blocks in the blockchain. These blocks are verified transactions that the possession of the car has passed from one party to another. Lastly the consumer can now finally lease the car from the leasing company by agreeing to pay a certain monthly rate and agreeing to return the car after the leasing time is up. This further creates a block in our blockchain which cannot altered. The consumer’s commitment on agreement to pay and returning the car after the leasing period is created as a block on the blockchain. As you can see in a system where everything is interconnected gives all parties more transparency. The end consumer can actually see where the car was created, how it was created, and possible even the specific technician who put it together. Furthermore, he can see which car sales man sold the car and possibly the number of cars that the leasing company bought from the dealer ship as well. We will further touch on the benefits of blockchain and the supply chain.

Internet of Things (IoT) and Blockchain

Most items that travel through the supply chain come in packages but how exactly will we track these packages as they move through the supply chain? This is where the internet of things come into play. In a world where everything is actually interconnected the internet of things is already working. However, the current state of technology is not on that level yet where all things are able to connect to each other on the same platform. Currently IBM is creating their own internet of things platform as well as their own blockchain platform where packages on the supply chain are able to connect with each other. For example, a shipping container might come with a sensor and an internet connect that is able sense the temperature of the shipping container to alert the consumer that the product in their might have gone bad during transport. This is still a future technology that is being worked on right now. However, in theory it is very possible that these futures will be developed in the future, where all packages along the supply chain can be interconnected.

Benefits of Combining Blockchain with Supply Chain

1. Increase in Transparency: An increase in transparency among the supply chain will be the most influential and important benefit. It helps prevent organization silos within existing parts of the supply chain.
2. Better Tracking of Orders of Assets: Blockchain will provide more readily produced detailed information about a product’s life cycle. For example, supplier information, manufacturing details, logistic information
3. Reduction in Errors in Payment Processing: There will be a reduction in over billing and over-payments as there will be a finite trail which connects blocks together so companies will always be able to backtrack payments.
4. Identification of Attempted Fraud: Blocks that are created in the block chain are approved by all parties first before being permanent. Fraud is further dissuaded since it would be much harder to commit.
5. Greater Trust By Consumers: With more transparency comes greater trust by the consumer. Consumers will start developing brand loyalty as consumers can see if companies are being more conscious in their decisions.

The Diamond Industry

The diamond industry is one of the key industries that would benefit from blockchain. In the current state of the diamond industries there are diamonds known as blood diamonds or conflict diamonds. These diamonds are mined in the Middle East under very poor circumstances and are usually used to fund civil war in poor countries. For example, the miners who dig for these diamonds are treated very poorly, They are severely underpaid, undertrained and not equipped with the right equipment to dig for these diamonds. These diamonds are then sold to diamond vendors who process and cut the diamonds into their finished form. They are then certified by the manufactures as legit diamonds which supposedly come from mines where workers were treated ethically and safety procedures were followed correctly. However, in reality these diamonds that are being certified are blood diamonds which were obtained in incredibly poor circumstances. Blockchain can be used in the diamond industry to better help track the origins of diamonds. It can be used to track which country the diamonds came from, how they were mined, and if they were retrieved ethically. No longer can manufactures certify shady blood diamonds that currently plague the diamond industry. Consumers will be able to better track the diamonds that they were buying to dissuade vendors from selling and purchasing blood diamonds.

Music Industry

Current Issues

According to the IFPI in their Global Music Report 2016, the global revenue made by the recording industry was broken down to the following sources. [1]

  • Digital revenue (45%)
  • Physical format sales (39%)
  • Performance rights (14%)
  • Synchronization sales (2%)

This displays a shifting trend of the increase of demand for digital music combined with the decline for physical format music. This is due to millennials preferring the convenience and portability of digital. The report also signals the growth of both music streaming the subscriptions, where they respectively grew over fourfold and eightfold between 2010 to 2015. [1] The popularity of digital music has promoted activities such as piracy, allowing music to be shared between multiple people without paying the owners or creators. There also is the issue of the amount of compensation creators receive, where distributors/retailers can take 15% to 40% cut and labels take a 47% cut for online purchases. [2] While larger names in the industry can negotiate how much they receive, lesser-known creators have very little power to do the same. The payments also are not always timely and by signing with a label they have the label represent them, but the label may not always operate in the creator’s best interests.

How Blockchain Will Benefit the Music Industry

Bitcoin technology may revolutionize the music industry

By adopting blockchain, the music industry hopes to gain the following benefits. [1]

  • Minimum viable data: Enforcing the amount of information to be provided before joining the blockchain. This allows for easier tracking and makes the blockchain become one of the biggest databases to analyze information for the music industry.
  • Fair Trade: As payments can be embedded within the blockchain, creators can be paid almost immediately whenever their work is accessed. Creators would have more power over the allocation of revenue and give more freedom in representing themselves instead of signing with a record label.
  • Decentralized database: There is advanced cryptography to help ensure the security of the system. Also, no entity would be able to manipulate the data for their own gain, as previous entries cannot be changed and new entries music be verified by all the nodes in the network before being added. This also means the database would not be susceptible to attacks such as DDOS attempts, as all the nodes in the network would need to go down.
  • Smart contracts: As a public blockchain would allow anyone to view the entries, programs can be written to pull information from the ledger in order to analyze it quickly. This means less human analysis is needed, which can be prone to errors.
  • Blockchain specific codec: Having media players that can play a special blockchain codec. This will help record usage and ownership of media files for micropayments.

Groups That Will Benefit

While many people could benefit from the implementation of blockchain, they can be sorted into the following groups. [1]

  • Those creating music within the industry: Due to micropayments within the blockchain, compensation is directly given to the creators. Smart contracts allow transparency and tracking of music, as well as making responsibilities of all involved parties clear. This also allows independent musicians to represent themselves more easily.
  • Digital Service Providers (Spotify, iTunes, Hulu): Payments will become quicker and seamless, with smart contracts allowing easy tracking of usage and purchases.
  • Music Platforms: Having widely accepted standards and procedures for both music format and copyright handling means more efficient cross-platform tracking and less copyright disputes.
  • The Public: Blockchain would allow disintermediation to provide faster and more secure service. Also, consumers will know that the creators are receiving fair compensation, as they could look up the blockchain itself.
  • Blockchain: Success would show a very strong case for blockchain usage outside of finance. This could draw the interest of other industries that were speculating the effectiveness of blockchain.

Current Trends

Mycelia logo

As of November 2016, there is a live project for creating an blockchain dedicated to becoming the world’s central database for music. [2] While the project is far from completion and would take a step-by-step approach towards populating the database, this shows clear intent to have blockchain in the music industry. Dot Blockchain Music, the company behind the project is interested in helping the music industry to adopt new media formats and technology architectures, allowing the industry to transition more smoothly towards new technology when it becomes available.

There is a group called Mycelia founded by the singer-songwriter Imogen Heap that is dedicated to creating fairer standards and driving innovation to within the music industry. [3] They are advocates for implementing blockchain in the music industry due to quicker and fairer compensation to music creators by embedded micropayments and to set clearer standards on the distribution of revenue. They try to increase awareness and support of blockchain’s potential in the industry by hosting hackathons and information sessions.


Current Issues

Currently medical records can take a large amount of time to update or transfer, either because they are in paper form or the changes need to go through multiple parties and channels. There are also varying levels of standards in data management between institutions, resulting in possible incompatibilities between systems when doing these transfers. Medical experts may need patients or witnesses to recall events leading up to the check-up or accident, but these are subject to biases and information can easily be left out. This could mean a less accurate diagnosis that may not completely solve the problem. Patients may also not have free access to their own healthcare records, due to security and integrity reasons. Attempts to obtain these records can be time-consuming and unsuccessful. These are only several problems that the industry faces today.

Deloitte has published a report displaying the opportunities for blockchain within healthcare. [4] The following are several issues the industry is currently facing.

  • Establishing a trust network
  • Cost per transaction
  • Master Patient Index
  • Varying data standards
  • Limited population data access
  • Inconsistent rules

However, blockchain has the potential to solve all the issues listed above. There will be an accessible ledger that will verify all new additions with the nodes in its network. Using advanced cryptography, sensitive and private information will be secure. As the blockchain system will replace third-parties that handle data transfers between parties or transactions, this disintermediation will make the process less costly and grant almost real-time processing. Smart contracts will enforce standards in dealing with patient data. All of these aspects allow blockchain to become an ideal solution in replacing the current systems that the industry is using.

Tierion and Philips partnership


Tierion is a blockchain platform provider that offers their services globally. They aim to spread the adoption of blockchain to be applied to things such as medical records and online purchases. In late 2015, Tierion had partnered with Philips Healthcare group to become the first company to have finished a blockchain project within the healthcare industry. [5] Tierion published a report on the usage of blockchain within healthcare that lists several expectations and problems that act as factors that could drive or impede the speed of adoption. [6]

  • Data Integrity & Security: As there is an increasing amount of patient data constantly being created and stored, it is vital to ensure that it remains secure and accurate for when it is needed. As entries cannot be easily changed or destroyed, as well as needing approval from the other nodes in order to add a block, this technology is suitable in these regards.
  • New Standards: The adoption of blockchain may change the procedures of how records and data are stored and analyzed. This could mean a shift in how information will get handled.
  • Disruption: Blockchain allows the disposal of intermediates that have proven to slow down the process, leaving fewer opportunities to intercept the data while it is being transferred between parties.
  • Vendor Lock-in: As blockchain is still an emerging technology within this industry, there is no widely agreed vendor to work with. Competitors will be fighting over market share and will seek to add to their portion while denying others to grow theirs. They will likely put in high switching costs to gain control in order to capitalize on the network effect. If poorly dealt with, this could impede the development of blockchain for the industry.
  • Hyper Overload: Blockchain is still not fully understood and misinformation can be easily shared. Blockchain providers will benefit to increase the hype of their technology and may over-promise and under-deliver. If expectations reach a height that becomes impossible for blockchain to meet, then this may dissuade parties from adoption when the reality of the technology’s capabilities is revealed.
  • Immature Infrastructure: Medical records and patient data are very vital, and the systems handling them can be considered mission critical. There is a huge risk with entrusting blockchain to handle such important data, especially when it has not been fully tested in a real-life environment for this industry. This will make a lot of companies hesitate and wait for offerings from mainstream providers rather than taking the chance.
  • Patient-Controlled Data: Healthcare experts would need consent before accessing patient data, which can be problematic if the patient is unconscious or refusing to share. While implementing a backdoor is possible, it creates a big security vulnerability. Also, it would require intensive training for patients to proper manage this data.

Future of blockchain in healthcare
How it could be used in the future

Ideally, the industry would be able to take an internet of things approach and would use blockchain to seamlessly collect data from multiple sources, such as your alarm clock and smartphone. The data would be stored in a patient’s personal healthcare record blockchain, where it would be accessible for analysis by the right companies but still remain secure. This gives patients more control over their personal medical data. This gives medical experts a more complete understanding of the circumstances leading up to a check-up or an accident, so that they can give more helpful solutions. If allowed, these experts may be able to remotely monitor the status of their patient until the next check-up or a situation has arisen.

Blockchain Auditing

Once blockchain is more widely understood and implemented within multiple industries, we believe that companies that specialize in conducting blockchain audits will start to form. These firms will be able to take on a consulting role in the planning, creation, implementation, and maintenance of blockchain systems as well as performing audits on existing ones to ensure the integrity and structure are functioning properly. This will help ensure that there is consistency between firms in the same industry. However, there needs to be some industry standards for blockchain implementation and usage before these companies become widespread. Currently, most industries would be experimenting with blockchain and would not have agreed on the best blockchain practices. Also, as each industry would have different needs in terms of how the data is distributed and analyzed, it is possible that the blockchains will differ between industries. This could mean that firms may specialize in auditing the blockchains of specific industries. While blockchain may cause job loss due to disintermediation, it can create jobs for blockchain auditing. Deloitte is looking into the technology in hopes of making the auditing process quicker and more transparent, but are considering its usage beyond finance. [7] If Deloitte is able to persuade its clients to adopt blockchain then this could further accelerate the adoption rate due to Deloitte having a large amount of presence in the business world.

Government Stance

With the potential to alleviate any need for a third-party intermediary, most governments are concerned how blockchain will affect the current system. Nonetheless, the interest raised by many nations alludes to the understanding that the application of the technology appears inevitable and incredibly disruptive. Therefore, although unclear on the legality of blockchain applications, most governments are taking a proactive approach to researching and understanding what the technology entails and its future implications.

Canadian Government

Legal Stance

On the Financial Consumer Agency of Canada's website[8], citizens can find how and what the government has to say about virtual currencies. Some of the few key points include:

  • Virtual currencies are not considered legal tender (no regulatory oversight)
  • The numerous risks associated with virtual currencies: potential fraud, privacy concerns, lack of legal recourse options and no deposit insurance from governments
  • Income generated through virtual currencies are not exempt from taxes
  • Tips on ways to go about using virtual currencies: understand the risks and take appropriate precautions: protect your virtual wallet by storing it on a separate hard drive

Ongoing Research

This past summer (June 2016), the Central Bank of Canada announced their research and studies on developing a virtual Canadian dollar that would function using the blockchain technology [9]. The proposal to replace existing currencies with cryptocurrencies can raise concern on how people's existing wealth will be translated or affected by these new technologies. Therefore, this exploration on the Canadian government's behalf is a sound decision as they seek possible ways for citizens to efficiently exchange funds, all while protecting the value of the Canadian dollar so it does not collapse and have international implications. One interesting consideration that hasn't received much attention is how economic policies could be enacted through blockchain, for example, ways of controlling the inflation rate, lending rates, etc. It will be interesting to see how big banks who enjoy oligopolistic power react and attempt to maintain a portion of the pie.

Current Application Example

The Government of Canada has also taken steps towards blockchain 3.0 applications. As explained in Don Tapscott's TEDTalk, one of the significant potential applications and benefits of the blockchain technology will be its functionality for giving access to those who are in poverty and simply do not or have not has access to bank accounts and legal documents. Bitnation is a company which is working with the Canadian government to register incoming refugees, many of whom do not have proper documentation [10]. The goal is to offer these refugees a means of receiving benefits and social assistance by using the registry type blockchain for the verification process.


Mark Ly Tony Zhang N/A N/A N/A
Beedie School of Business
Simon Fraser University
Burnaby, BC, Canada
Beedie School of Business
Simon Fraser University
Burnaby, BC, Canada
Beedie School of Business
Simon Fraser University
Burnaby, BC, Canada
Beedie School of Business
Simon Fraser University
Burnaby, BC, Canada
Beedie School of Business
Simon Fraser University
Burnaby, BC, Canada N/A N/A N/A


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