Mini Project Report

On

Blockchain technology in banking sector

Submitted in the Partial fulfillment of the requirement for the Two-Year Full-Time Master of Business
Administration

Student Name : RASHI BANSAL Faculty Mentor Name :

MR SURENDRA TIWARI

Roll no:

MBA 1st Semester MBA (2020-22)

I.T.S Mohan Nagar, Ghaziabad

Institute of Technology and Science

Mohan Nagar, Ghaziabad

SESSION 2020-21
 ACKNOWLEDGEMENT

I would like to express gratitude to all those who gave me the possibility
to complete this project. I am deeply indebted to my mentor Mr Surendra
Tiwari from Institute of Technology and Science, Mohan Nagar whose
stimulating suggestions and encouragement helped me in all the time in
writing and completing this mini project report.
The learning was immense and valuable.
S NO. TABLE OF CONTENTS PAGE
NO.
1 Title Page

2 Acknowledgements

3 Executive Summary

4 Introduction

5 Industry Profile

6 Evolution of use of technology in the industry.

7 Upcoming technological advancement in the

industry.

8 Conclusion

9 References

10 Annexture
EXECUTIVE SUMMARY
EXECUTIVE SUMMARY
What is Blockchain Technology and How Does It
Work?
Over the past few years, you have consistently heard the term ‘Blockchain technology,’ probably regarding
cryptocurrencies like Bitcoin. It seems like Blockchain is a platitude but in a hypothetical sense, as there is no
real meaning that the layman can understand easily. It is imperative to understand what is Blockchain, the
technology used, how it works, and how it’s becoming vital in the digital world.

According to Global Data’s Thematic research report, the demand for cryptocurrencies has receded by 20%
during 2018 when compared to the previous years. The reason being businesses are preferring to deploy
traditional approaches for their earlier stage projects rather than going with Blockchain technology.

People have higher expectations based on weaker perceptions based on the report findings, and, in a couple of
years, the truth about the Blockchain will be demystified. It has real value, and, over time, the scope of it will
become wider and more user-friendly.

So, the onus is on you to learn this evolving technology to prepare for the future. If you are new to Blockchain,
then this is the right platform to gain solid foundational knowledge. In this article, you will learn what Blockchain
technology is, how Blockchain works, why it’s important, and how you can use this field to advance your career.

What is Blockchain Technology?

Blockchain technology is a structure that stores transactional records, also known as the block, of the public in
several databases, known as the “chain,” in a network connected through peer-to-peer nodes. Typically, this
storage is referred to as a ‘digital ledger.’

Every transaction in this ledger is authorized by the digital signature of the owner, which authenticates the
transaction and safeguards it from tampering. Hence, the information the digital ledger contains is highly secure.

In simpler words, the digital ledger is like a Google spreadsheet shared among numerous computers in a network,
in which, the transactional records are stored based on actual purchases. The fascinating angle is that anybody
can see the data, but they can’t corrupt it.

Why is Blockchain Popular?

Suppose you are transferring money to your family or friends from your bank account. You would log in to online
banking and transfer the amount to the other person using their account number. When the transaction is done,
 your bank updates the transaction records. It seems simple enough, right? There is a potential issue which most
of us neglect.

These types of transactions can be tampered with very quickly. People who are familiar with this truth are often
wary of using these types of transactions, hence the evolution of third-party payment applications in recent
years. But this vulnerability is essentially why Blockchain technology was created.

Technologically, Blockchain is a digital ledger that is gaining a lot of attention and traction recently. But why has
it become so popular? Well, let’s dig into it to fathom the whole concept.

Record keeping of data and transactions are a crucial part of the business. Often, this information is handled in
house or passed through a third party like brokers, bankers, or lawyers increasing time, cost, or both on the
business. Fortunately, Blockchain avoids this long process and facilitates the faster movement of the transaction,
thereby saving both time and money.

Most people assume Blockchain and Bitcoin can be used interchangeably, but in reality, that’s not the case.
Blockchain is the technology capable of supporting various applications related to multiple industries like finance,
supply chain, manufacturing, etc., but Bitcoin is a currency that relies on Blockchain technology to be secure.

Blockchain is an emerging technology with many advantages in an increasingly digital world:

• Highly Secure
It uses a digital signature feature to conduct fraud-free transactions making it impossible to corrupt or change
the data of an individual by the other users without a specific digital signature.

• Decentralized System
Conventionally, you need the approval of regulatory authorities like a government or bank for transactions;
however, with Blockchain, transactions are done with the mutual consensus of users resulting in smoother,
safer, and faster transactions.

• Automation Capability
It is programmable and can generate systematic actions, events, and payments automatically when the criteria
of the trigger are met.

How Does Blockchain Technology Work?

In recent years, you may have noticed many businesses around the world integrating Blockchain technology. But
how exactly does Blockchain technology work? Is this a significant change or a simple addition? The
advancements of Blockchain are still young and have the potential to be revolutionary in the future; so, let’s begin
demystifying this technology.

Blockchain is a combination of three leading technologies:

1. Cryptographic keys

2. A peer-to-peer network containing a shared ledger

3. A means of computing, to store the transactions and records of the network

Cryptography keys consist of two keys – Private key and Public key. These keys help in performing successful
transactions between two parties. Each individual has these two keys, which they use to produce a secure digital
identity reference. This secured identity is the most important aspect of Blockchain technology. In the world of
cryptocurrency, this identity is referred to as ‘digital signature’ and is used for authorizing and controlling
transactions.

The digital signature is merged with the peer-to-peer network; a large number of individuals who act as authorities
use the digital signature in order to reach a consensus on transactions, among other issues. When they authorize
a deal, it is certified by a mathematical verification, which results in a successful secured transaction between
the two network-connected parties. So to sum it up, Blockchain users employ cryptography keys to perform
different types of digital interactions over the peer-to-peer network.

The Process of Transaction

One of Blockchain technology’s cardinal features is the way it confirms and authorizes transactions. For example,
if two individuals wish to perform a transaction with a private and public key, respectively, the first person party
would attach the transaction information to the public key of the second party. This total information is gathered
together into a block.

The block contains a digital signature, a timestamp, and other important, relevant information. It should be noted
that the block doesn’t include the identities of the individuals involved in the transaction. This block is then
transmitted across all of the network's nodes, and when the right individual uses his private key and matches it
with the block, the transaction gets completed successfully.

In addition to conducting financial transactions, the Blockchain can also hold transactional details of properties,
vehicles, etc.

Here’s a use case that illustrates how Blockchain works:

• Hash Encryptions
Blockchain technology uses hash encryption to secure the data, relying mainly on the SHA256 algorithm to
secure the information. The address of the sender (public key), the receiver’s address, the transaction, and
his/her private key details are transmitted via the SHA256 algorithm. The encrypted information, called hash
encryption, is transmitted across the world and added to the Blockchain after verification. The SHA256
algorithm makes it almost impossible to hack the hash encryption, which in turn simplifies the sender and
receiver’s authentication.

• Proof of Work
In a Blockchain, each block consists of 4 main headers.

• Previous Hash: This hash address locates the previous block.

 • Transaction Details: Details of all the transactions that need to occur.

• Nonce: An arbitrary number given in cryptography to differentiate the block’s hash address.

• Hash Address of the Block: All of the above (i.e., preceding hash, transaction details, and nonce) are
transmitted through a hashing algorithm. This gives an output containing a 256-bit, 64 character length
value, which is called the unique ‘hash address.’ Consequently, it is referred to as the hash of the block.

• Numerous people around the world try to figure out the right hash value to meet a pre-determined condition
using computational algorithms. The transaction completes when the predetermined condition is met. To
put it more plainly, Blockchain miners attempt to solve a mathematical puzzle, which is referred to as a
proof of work problem. Whoever solves it first gets a reward.

• Mining
In Blockchain technology, the process of adding transactional details to the present digital/public ledger is
called ‘mining.’ Though the term is associated with Bitcoin, it is used to refer to other Blockchain technologies
as well. Mining involves generating the hash of a block transaction, which is tough to forge, thereby ensuring
the safety of the entire Blockchain without needing a central system.

What Are the Implications of Blockchain Technology?

Blockchain technology has made a great impact on society, including:

• Bitcoin, Blockchain’s prime application and the whole reason the technology was developed in the first place,
has helped many people through financial services such as digital wallets. It has provided microloans and
allowed micropayments to people in less than ideal economic circumstances, thereby introducing new life in
the world economy.

• The next major impact is in the concept of TRUST, especially within the sphere of international transactions.
Previously, lawyers were hired to bridge the trust gap between two different parties, but it consumed extra
time and money. But the introduction of Cryptocurrency has radically changed the trust equation. Many
organizations are located in areas where resources are scarce, and corruption is widespread. In such cases,
Blockchain renders a significant advantage to these affected people and organizations, allowing them to
escape the tricks of unreliable third-party intermediaries.

• In the area of politics, Blockchain is being looked at by an organization called Follow My Vote, which is trying
to combat election fraud at the ballot box.

• The advent of the Internet of Things (IoT) has unleashed a plethora of smart machines that transfer data over
the Internet without any human interaction needed. Likewise, technology is even used for public services such
as rubbish collection, transportation, and traffic management. So, in the world of IoT, you can make Smart
Contracts and allow smart objects to perform the listed tasks, which in turn negates the need for human
involvement.

• Blockchain technology can create a decentralized peer-to-peer network for organizations or apps like Airbnb
and Uber. It allows people to pay for things like toll fees, parking, etc.

• Blockchain technology can be used as a secure platform for the healthcare industry for the purposes of storing
sensitive patient data. Health-related organizations can create a centralized database with the technology and
share the information with only the appropriately authorized people.
• In the private consumer world, Blockchain technology can be employed by two parties who wish to conduct a
private transaction. However, these kinds of transactions have details that need to be hammered out before
both parties can proceed:

1. What is the T&C of the exchange?

2. Are all the terms clear?

3. When does the exchange start?

4. When will it finish?

5. When is it unfair to halt the exchange?

Fortunately, since Blockchain technology employs a shared ledger, distributed ledger, or any other decentralized
network, the parties can quickly gain answers to these exchange relation queries.

Also, transactions or information on a Blockchain platform can be tracked from departure to the destination point
by all of the users in the supply chain.
INTRODUCTION
Introduction
One of the most hyped it buzzwords to have emerged in the last couple of years.
Blockchain has found its way into major headlines on a near daily basis , but a year
and a half ago , it was a word used by a relatively small number of people to describe
peer to peer ledger technology.

The blockchain is an undeniably ingenious invention – the brainchild of a person or

group of people known by the pseudonym , satoshi nakamoto. But since then , it has
evolved into something greater, and the main question every single person is asking
is : what is block chain?

Before we explore the technology of blockchain and how it works , it is first worth
exporing the concept of behind blockchain and its uses in different sectors.

It is to no surprise thatt blockchain technology being a buzzword of the day has

attracted the attention of entrepreneurs , governent , banks and many more people
across the globe see the advent of the blockchain technology to ‘ the internet’. Also
, they forsee the shift of power balance from centralized bodies in the
communications and business sectors.
Some Facts about Cryptocurrency :
• Cryptocurrencies are not issued by any central banks or central authority,
thereby making them immune to government interferences or even inflations.
As a result, it can also make them almost totally shielded and potential global
currency.
• Cryptocurrencies can be bought and sold in the exchanges specifically meant
for this purpose. There are a lot of exchanges in the international market and a
good number of exchanges that are home-grown within India in the last decade.
• Cryptocurrencies are secured through private and public keys, it is nearly
impossible to counterfeit.
• The first cryptocurrency – Bitcoin, came into existence in the year 2009. Since
then, more than 5000 cryptocurrencies popularly called ‘altcoins‘ have
emerged. Though every altcoin has a unique name in which it is issued and
traded.
• The most popular cryptocurrencies worldwide as of 2020 are Bitcoin (BTC),
Bitcoin Cash (BCH), Litecoin (LTC), Ethereum (ETH), to name a few.
Objectives of study:
• To study the different aspects of blockchain.
• To study the impact of blockchain on banking and financial sector.
INDUSTRY PROFILE
INDUSTRY PROFILE
Blockchain has the potential to grow to be a bedrock of the worldwide record-
keeping systems, but was launched just 10 years ago. It was created by the unknown
persons behind the online cash currency bitcoin, under the pseudonym of Satoshi
Nakamoto.

A brief history of blockchain:

1991

A cryptographically secured chain of blocks is described for the first time by Stuart
Haber and W Scott Stornetta

1998

Computer scientist Nick Szabo works on ‘bit gold’, a decentralised digital currency

2000

Stefan Konst publishes his theory of cryptographic secured chains, plus ideas for
implementation

2008

Developer(s) working under the pseudonym Satoshi Nakamoto release a white paper
establishing the model for a blockchain

2009

Nakamoto implements the first blockchain as the public ledger for transactions made
using bitcoin

2014

Blockchain technology is separated from the currency and its potential for other
financial, interorganisational transactions is explored. Blockchain 2.0 is born,
referring to applications beyond currency
The Ethereum blockchain system introduces computer programs into the blocks,
representing financial instruments such as bonds. These become known as smart
contracts.
EVOLUTION OF TECHNOLOGY

IN

THE INDUSTRY
 EVOLUTION OF TECHNOLOGY IN THE INDUSTRY

Bitcoin’s role :

Posting their seminal whitepaper in 2008 and launching the initial code in 2009,
Nakamoto created bitcoin to be a form of cash that could be sent peer-to-peer without
the need for a central bank or other authority to operate and maintain the ledger,
much as how physical cash can be.

While it wasn’t the first online currency to be proposed, the bitcoin proposal solved
several problems in the field and has been by far the most successful version.

The engine that runs the bitcoin ledger that Nakamoto designed is called the
blockchain; the original and largest blockchain is the one that still orchestrates
bitcoin transactions today.

The second generation

Other blockchains include those that run the several hundred “altcoins” – other
similar currency projects with different rules – as well as truly different applications,
such as:

• Ethereum: the second largest blockchain implementation after bitcoin. Ethereum

distributes a currency called ether, but also allows for the storage and operation of
computer code, allowing for smart contracts.

• Ripple: a real-time gross settlement system, currency exchange and remittance

network, based on a public ledger.

Blockchain defined:

Blockchain is a shared, immutable ledger that facilitates the process of recording

transactions and tracking assets in a business network. An asset can be tangible
(a house, car, cash, land) or intangible (intellectual property, patents, copyrights,
branding). Virtually anything of value can be tracked and traded on a blockchain
network, reducing risk and cutting costs for all involved.
 Why blockchain is important:

Business runs on information. The faster it’s received and the more accurate
it is, the better. Blockchain is ideal for delivering that information because it
provides immediate, shared and completely transparent information stored on
an immutable ledger that can be accessed only by permissioned network
members. A blockchain network can track orders, payments, accounts,
production and much more. And because members share a single view of the
truth, you can see all details of a transaction end-to-end, giving you greater
confidence, as well as new efficiencies and opportunities.

What needs to change:

Operations often waste effort on duplicate record keeping and third-party

validations. Record-keeping systems can be vulnerable to fraud and cyberattacks.
Limited transparency can slow data verification. And with the arrival of IoT,
transaction volumes have exploded. All of this slows business, drains the bottom
line — and means we need a better way.

BENEFITS :
Greater trust
With blockchain, as a member of a members-only network, you can rest assured that
you are receiving accurate and timely data, and that your confidential blockchain
records will be shared only with network members to whom you have specifically
granted access.

Greater security
Consensus on data accuracy is required from all network members, and all validated
transactions are immutable because they are recorded permanently. No one, not even
a system administrator, can delete a transaction.

More efficiencies
With a distributed ledger that is shared among members of a network, time-wasting
record reconciliations are eliminated. And to speed transactions, a set of rules —
called a smart contract — can be stored on the blockchain and executed
automatically.
How blockchain works:

As each transaction occurs, it is recorded as a “block” of data

Those transactions show the movement of an asset that can be tangible (a product)
or intangible (intellectual). The data block can record the information of your choice:
who, what, when, where, how much and even the condition — such as the
temperature of a food shipment.

Each block is connected to the ones before and after it

These blocks form a chain of data as an asset moves from place to place or ownership
changes hands. The blocks confirm the exact time and sequence of transactions, and
the blocks link securely together to prevent any block from being altered or a block
being inserted between two existing blocks.

Transactions are blocked together in an irreversible chain: a blockchain

Each additional block strengthens the verification of the previous block and hence
the entire blockchain. This renders the blockchain tamper-evident, delivering the key
strength of immutability. This removes the possibility of tampering by a malicious
actor — and builds a ledger of transactions you and other network members can
trust.
UPCOMING TECHNOLOGICAL ADVANCEMENT
IN
BANKING INDUSTRY
How blockchain impacts on the banking sector
Although blockchain has been around since 2009, nobody envisaged its use in the banking industry. Today, it
has become the technology to beat in almost in the financial industry. Here are a few ways it can impact on the
banking industry.

1. Fast-paced financial transactions

Majority of third-party financial transactions in the banking industry consume lots of time. This time could range
from few days to even weeks. These transactions take place via payment gateways can be replaced with
blockchain technology. Thus, this offers the opportunity for a widespread real-time payment solution. With this,
transactions via blockchain will only take few seconds to complete between the parties involved. Hence, this
eliminates third-party payment gateways and results in fast-paced financial transactions.

2. Lower cost of financial transactions

The use of blockchain technology in the banking sector will lower the cost of financial transactions. The truth
is; the long time required to complete financial transactions results in high monetary cost. Fast-paced transaction
and eliminating payment gateways will result in low financial transaction cost. More so, this will end third-party
charges from all financial transaction in the banking industry. This will benefit businesses as well as individuals
who perform fina
ncial transactions daily.

3. Reduction of fraud

The use of blockchain in the banking sector can help reduce fraud. Blockchain offers hope because 45% of
financial intermediaries are prone to economic crime. Across the globe, banking systems are designed to function
via a centralized database. Hence, they are vulnerable to serious cyber attacks due to its many points of failure.
The truth is; all a hacker needs to gain access to the system to breach it. Once this happens, fraud is eminent if
such breach is not noticed on time.

Hence, blockchain companies can help design blockchain systems to mitigate financial fraud. The truth is;
blockchain can cut down on the massive fraud in the banking sector. This is true because it is a distributed ledger
system where each transaction block has its timestamp. More so, it is a technology that links each block of
transactions to past transactions. Thus, it can checkmate and at the same time cut down crimes in online financial
transactions. Hence, it offers better opportunities that can help reduce fraud in the banking industry.

4. Establish smart contract

Blockchain technology has the ability to store enormous digital information. Thus, it establishes a smart contract
in a given transaction once parties involved insert their unique keys. Hence, banks and blockchain companies
can collaborate to create contracts for any completed transaction. This becomes possible if those involved fulfill
certain set criteria for such transactions. Hence, meeting these criteria establishes a smart contract for all
completed financial transaction.

5. Helps financial institution to Know your customer (KYC)

Across the globe, banks spend a maximum of $500 million yearly for know your customer campaigns. More so,
the due diligence regulations cost financial institutions a fortune to maintain. These regulations checkmate
against terrorism and money laundering but cost a fortune. Blockchain technology offers transparency and
verifiable financial transaction with ease. With blockchain in the financial industry, individuals and banks can
access their transactions. No one can delete or tamper with transactions done via blockchain technology. The
truth is; financial institutions and individuals can have every transaction history with ease. This is so because
this technology locks each transaction with a timestamp. As such, one can verify each transaction over the
internet with ease. This helps the financial institution to know their customers via transparent and verifiable
transactions.

6. Helps eliminate fraud in trading platforms

Trading platforms of financial institutions are prone to operational errors as well as issues of fraud. Top
blockchain development companies have developed unique technology that can disrupt these occurrences.
blockchain technology can drastically reduce operational errors and fraud on these platforms. Thus, makes
trading on these platforms safe and secure for exchangers. More so, the use of blockchain on these platforms
will reduce cost and improve the system’s efficiency.

Conclusion

This unique technology offers the banking industry many unique opportunities. But certain challenges must be
overcome for noticeable impacts to occur in the banking sector. To deploy this technology in the banking sector,
it must conform and follow recent privacy laws. This is necessary to protect individual and organizational data
as well as the safety of such data.

More so, the need for regulatory functions and oversight needs to be addressed by relevant authorities. The
financial sector is synonymous with huge data. Hence, data scalability must be sorted out prior to deploying
blockchain in the financial sector.
 In summary, blockchain can impact and revolutionize the banking sector. The only thing needed is its right
application and use.

Blockchain in banking industry :

Blockchain, also known as distributed ledger technology, was originally developed in 2009 as a tracking
database for Bitcoin transactions. According to IBM, 66 per cent of banks are expected to have blockchain
in commercial production and at scale in four years. Here are 4 of the key advantages of implementing
blockchain for banks.

1. Decentralised Trust
The primary advantage of blockchain is its method of verifying and tracking transactions—it enables
individuals and organisations to process transactions without the need for a third party or a central bank.
Several banks have begun using the technology to provide a reliable alternative to systems that depend on
intermediaries and third-party validation of transactions. Instead of everything being controlled by a single
central authority, blockchain produces a shared infrastructure by distributing control among all the peers in
the transaction chain. This reduces or even eliminates counterparty risk. Users can be assured that
transactions will be implemented as per the protocol, eliminating the need for a trusted third party.

2. Enhanced Security
 Once data is recorded in a block, it cannot be altered retroactively—this makes blockchain inherently
secure. Since it is shared among a large number of users, it is difficult to shut down or hack, and can be
viewed by anyone using the system, ensuring transparency. The decentralised nature of the networks
ensures that blockchain does not have a central point of failure, and is consequently able to withstand attacks
more effectively. Exchange of transactional value in blockchain involves the use of unique digital signatures
that rely on public as well as private decryption codes; it is therefore governed by strict cryptographic rules.
This reduces the risk of fraud.

3. Decreased Costs
By leveraging the distributed ledger approach to form a system that decentralises trust, banks are able to
decrease transaction fees significantly by eliminating third party intermediaries and overhead costs for
exchanging assets. The elimination of the middle man has made it possible for processes such as cross-
border payments, trading and settlement to become quicker, more reliable and less expensive. Additionally,
blockchain reduces material costs by removing the need for expensive proprietary infrastructure. It reduces
risks due to enhanced data integrity, thereby cutting the costs associated with regulatory compliance in
areas such as Know Your Customer (KYC) initiatives.

4. Increased Efficiency
Blockchain eliminates the risk of errors and duplication, and is consequently ideal for refurbishing a range
of digital processes. The removal of intermediaries reduces the settlement time to mere seconds and the
transaction time to minutes. It also enables transactions to be processed 24/7. As blockchain helps banks to
store data in blocks using a tamper-proof format, it lets them improve the mobility of data and decrease the
time taken for KYC efforts. It also allows transactional processes—from payment to settlement—to be fully
automated, and removes any delays in documentation caused by duplication. Blockchain data is complete,
accurate, and reliable. Additionally, adding all transactions to a single, publically available ledger
eliminates the disorder and complexity associated with multiple ledgers.
Challenges :

Scalability:

Blockchain Tech is now the center of attraction in the financial industry. The Blockchain tech
isn’t capable of handling the scale of financial transactions that occur each day. Since multiple
nodes are necessary to validate each transaction. Even the leading blockchain networks have
encountered a decrease in transaction speed and increased fee per transaction. Hence, it remains
crucial to research before the blockchain is adopted on a wide scale.

Security:

As Blockchain has no central authority, it has its security benefits. Nobody can make
modifications to the ledger secretly since the ledger is public. On the event of a change to the
ledger, each node validates the entry into the record. Although security issues might occur in
case of a 51 percent attack. According to Satoshi Nakamoto when an individual or a group has
more than 50% of the mining power, it is 51 percent attack. This attack prevents other miners
from creating blocks or making any transactions altogether.

To avoid this, the mining pool needs monitoring at all times.

Culture:

Blockchain tech is a nontraditional concept of asset transaction. It is a ‘new world’ experience

one can have. Anybody is bound to have culture shock when introduced to a whole new world.
It isn’t as easy to adapt even for the institutes that are now digitized.

It takes time, effort and outstanding knowledge transfer to accomplish it.

Regulations and Governance:

Governance relies on a set of policies and regulations. But blockchain doesn’t have standard
rules and regulations. The regulations vary with country.

• The European union strictly believes in data privacy. The GDPR which is in effect since
May 25th, 2018; it allows the European citizens to have ‘right to be forgotten’ online.

• Japan was first of all countries to use Bitcoin as a currency and to issue cryptocurrency
transaction licenses to businesses. The Japanese strictly stuck to using only the Bitcoin and
no other cryptocurrency.

• But the U.S. government agencies believe in “regulation first, business later” approach.

Cost and efficiency:

The Blockchain tech is quite competent in cost reduction. But it still faces specific challenges
while implementing the legacy systems. Setting up the initial blockchain infrastructure is
expensive. Small financial companies or Banks wouldn’t prefer investing in something that
doesn’t hold a promising future. As we discussed, like scalability, many other factors contribute
to high maintenance cost.

These will need to be addressed to assure any company to make the future proceedings.

Though the Blockchain future holds significant potential, very little can happen if challenges
mentioned above aren’t improved. With an uncertain future ahead, a united front among all the
countries and a standard set of regulations will be crucial to implementing these technologies
to their most capacity.
Future of Cryptocurrency in India :

Post ban of old currency notes in 2018 by the Indian Government, the Indian central
bank banned the trading of cryptocurrencies since a string of frauds were reported.
But the cryptocurrency exchanges filed a lawsuit in the Supreme Court of India
asking to revoke the ban. Finally, after almost two years, the ban was lifted in March
2020, bringing cryptocurrency trading back in India.

As per estimates, there are at least 10 exchanges in India as of 2020 that allow
investors to trade cryptocurrency. Experts believe that with proper law and more
regulations to maintain the autonomy and making sure the cryptocurrency exchanges
follow some basic KYC verifications of the owners, it will give way for widespread
adoption of cryptocurrencies for a myriad of applications.

Though cryptocurrencies, when used to their full potential, are expected to disrupt
many existing financial systems, there are many technological challenges in creating
a complete ecosystem that embraces cryptocurrencies. Financial institutions are
taking baby steps in including cryptocurrency in their portfolio of offerings.

Some of India’s bigger technology firms also started showing interest in creating a
platform to trade cryptocurrencies. As more and more financial institutions show
interest in adopting blockchain technology and cryptocurrencies, with support
from the governments and regulators, cryptocurrencies are only expected to become
more prominent.

As of now, blockchain technology and cryptocurrencies are still considered niche

and the technology cost involved in creating and maintaining is very high. But as
more and more players emerge in the market, newer and cost-effective technologies
are expected to emerge, paving the way for widespread adoption of cryptocurrencies.
CONCLUSION
 Conclusion

Blockchain truly has the potential to become the next big thing in technology space
and when it matures, much like what internet did in the 1990s, it can disrupt several
industries at scale. As we have seen, firms across several industries have already
started adopting and piloting a few internal services on Blockchain. So, how fast the
technology gains mass adoption is now a function of how rapidly innovative
applications can be built on top of Blockchain.
Cryptocurrencies such as Bitcoin, on the other hand, although popular, may take
some time to be adopted as a primary medium of exchange, replacing fiat currencies.
We have already seen how Bitcoin standard is seen in comparison to the Gold
standard, without some of the disadvantages of the latter. To become the future
currency of the world, it needs to get the nod of governments and policy makers. It
also needs to make itself technologically much safer to vulnerable attacks. These are
as much a problem of public perception as they are about the economic soundness.
In the truly exciting times ahead, we only have to wait and watch how Bitcoins and
Blockchain play out and where they live up to their potential and promises.
Blockchains can be set up to operate in a variety of ways, using different mechanisms
to secure a consensus on transactions, seen only by authorized users, and denied to
everyone else. Bitcoin is the most well-known example that shows how huge
Blockchain Technology has become. Blockchain founders are also trying out
numerous other applications to expand Blockchain’s level of technology and
influence. Judging by its success and increased use, it seems that Blockchain is
poised to rule the digital world of the near future.
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