Issues in Regulating Blockchain Tranactions †MyAssignmenthelp.com

Question: Discuss about the Issues in Regulating Blockchain Tranactions. Answer: Introduction A blockchain is defined as a record or list used to keep track of transactions between two particular parties. It is such a record that cannot be changed after the record is complete (Heilman, Baldimtsi and Goldberg 2016). Generally after completion of recording a data, a blockchain is encrypted in order to maintain its security. On the other hand, bitcoin is an online crypto currency that is used to make secure and worldwide payment through the digital medium without keeping any track or traces. Bitcoins are very secure modes of payment that keeps no trace of its origin or the destination and one user can store it in the form an online wallet (Fauzi, Nasutio and Paryasto 2017). The basic difference between the two is that bitcoin is the currency and blockchain is the ledger record for the transaction of bitcoins. The history of blockchain dates back to 1991 when two researchers W. Scott Stornetta and Stuart Haber started developing cryptographic chain of blocks. Some other researchers also improved on the design but it was not until 2008 that it was actually made useful by Satoshi Nakamoto for using as a ledger for bitcoin transactions. The term bitcoin was first registered in 2008 when Satoshi Nakamoto registered the domain name bitcoin.org (Cachin, Sorniotti and Weigold 2016). The first bitcoin network was started when the founder Nakamoto mined the first block on the genesis block. Also it has been revealed that in the initial period, Nakamoto mined at least 1 million bitcoins. Real Life Application of Blockchain and Bitcoin Blockchain currently finds widespread use around the world due to its vast number of benefits over common currency exchange systems. One of the most popular real life applications of blockchain is international payment system. In the existing system, the international payment requires at least 2 business days due to long verification process through Automated Clearing House (ACH) (Dunphy and Petitcolas 2018). In addition, such transfers involve huge amount of additional fees (generally in the region of $50). As a result, some of the users may not be able to afford to make such payments. On the other hand, using blockchain technology, such payments can be done within a period of a mere 10 minutes and also at a very low transfer cost (25-50 US cents). Hence, it is much easier as well as cheap and hence, it can be used by anyone. Although bitcoin is a secure crypto currency, it is yet to find real world applications extensively. This is mainly because of the dark web associated with bitcoins. Bitcoins are known to be a popular payment method in the dark web where criminals, drug dealers and other unethical users make or take payments through bitcoins in order to prevent any trace of origin or destination of the payment (Eyal et al. 2016). Hence most of the people as well as business organizations associate bitcoin with criminal transactions. As a result, the real life use of bitcoin is restricted. However, with increasing value of bitcoins as well as interest of people in investing in bitcoins, many banks and other business organizations now accept payments in the form of bitcoins. Impact of Blockchain on Supply Chain of the Future Blockchain can have massive impact on the supply chain of the future if more transparency and security is allowed. If blockchain is used supply chain, it can be used to create a permanent transaction record once a product is sent from one entity to another. In this case, the permanent history will be created automatically without the need for human interference (Daulay, Nasution and Paryasto 2017). As a result, the process will significantly reduce delay time of processing and transaction recording and moreover, human errors will be completely removed. Furthermore, it will be very much convenient for end users to track a particular product once they are dispatched from manufacturer and are moving between different supply chain blocks. Overall, the blockchain technology will significantly improve the transparency of the entire supply chain system and scalability will also be significantly improved. Conclusion Finally, the discussion can be concluded by the overall review of blockchain technology and bitcoin. It can be said that blockchain technology has massive potential in revolutionizing the entire supply chain management due to its projected number of benefits. However, in order to reap such benefits, a large number of modifications on the technology are necessary. Firstly, the overall transparency of the technology must be increased without just restricting it to the dark web. In addition, the security of the technology must also be enhanced before it is applied to supply chain management on a global scale. The transparency of bitcoin exchange should also be further increased in order to increase its applicability on a much wider scale. References Ainsworth, R.T. and Alwohaibi, M., 2017. Blockchain, Bitcoin, and VAT in the GCC: The Missing Trader Example. Cachin, C., Sorniotti, M.V. and Weigold, T., 2016. Blockchain, cryptography, and consensus. Crosby, M., Pattanayak, P., Verma, S. and Kalyanaraman, V., 2016. Blockchain technology: Beyond bitcoin.Applied Innovation,2, pp.6-10. Daulay, R.S.A., Nasution, S.M. and Paryasto, M.W., 2017, November. Realization and Addressing Analysis In Blockchain Bitcoin. InIOP Conference Series: Materials Science and Engineering(Vol. 260, No. 1, p. 012002). IOP Publishing. Dunphy, P. and Petitcolas, F.A., 2018. A First Look at Identity Management Schemes on the Blockchain.arXiv preprint arXiv:1801.03294. Eyal, I., Gencer, A.E., Sirer, E.G. and Van Renesse, R., 2016, March. Bitcoin-NG: A Scalable Blockchain Protocol. InNSDI(pp. 45-59). Fauzi, M.R.R., Nasution, S.M. and Paryasto, M.W., 2017, November. Implementation and Analysis of the use of the Blockchain Transactions on the Workings of the Bitcoin. InIOP Conference Series: Materials Science and Engineering(Vol. 260, No. 1, p. 012003). IOP Publishing. Heilman, E., Baldimtsi, F. and Goldberg, S., 2016, February. Blindly signed contracts: Anonymous on-blockchain and off-blockchain bitcoin transactions. InInternational Conference on Financial Cryptography and Data Security(pp. 43-60). Springer, Berlin, Heidelberg. Howell, S.T., 2017. Applications in Entrepreneurial Finance. Kiviat, T.I., 2015. Beyond bitcoin: Issues in regulating blockchain tranactions.Duke LJ,65, p.569.