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Analysis of Blockchain technology: pros, cons and SWOT

M. Niranjanamurthy1 • B. N. Nithya1 • S. Jagannatha1

Received: 30 January 2018 / Revised: 24 February 2018 / Accepted: 6 March 2018 / Published online: 19 March 2018 � Springer Science+Business Media, LLC, part of Springer Nature 2018

Abstract Any online transaction that involves digital money is a bit of a challenge these days with the rising threats of hackers trying

to steal bank details posted online. This leads to the invention of various kinds of crypto-currency, Bitcoin being one of

them. The technology behind using the Bitcoin is popularly called as Blockchain. Blockchain is a digitized, de-centralized,

public ledger of all crypto-currency transaction/s. Blockchain tries to create and share all the online transactions, stored in a

distributed ledger, as a data structure on a network of computers. It validates the transactions using peer-to-peer network of

computers. It allows users to make and verify transactions immediately without a central authority. Blockchain is a

transaction database which contains information about all the transactions ever executed in the past and works on Bitcoin

protocol. In this analysis paper we discussed what is Blockchain?, SWOT analysis of BC, Types of BC and how

Blockchain works along with its advantages and disadvantages.

Keywords Blockchain � Structure of Blockchain � Types of Blockchain � SWOT analysis � Pros and cons of Blockchain

1 Introduction

Any crypto currency transaction that takes place in these

days has to be transparent. There is a lot of private data in

these transactions that can cause huge damage if fallen in

the wrong hands. The technology both the hardware and

software that is associated with these transactions also have

to be taken care of as failure of any one of these compo-

nents would lead to the failure of a transaction that involves

money. A Blockchain can be considered as a digitalized

public ledger that would record all the digital transactions

in a chronological order or as ‘‘Completed Transaction

Blocks’’ as a data structure and stores this in a distributed

manner across a network. This ledger would be available

for anyone to download who can connect with this net-

work. The Blockchains are implemented using three major

technologies: (1) Private Key Cryptography, (2) Peer to

Peer Network (3) Program (the Blockchains protocol). The

major advantage of a Blockchain is its usage to distributed

computing technology that helps it overcome problems of

load sharing. Distributed computing technology also sup-

ports graceful degradation that makes Blockchain tech-

nology very reliable to store sensitive information like

medical records, management activities, transaction pro-

cessing, documenting derivation, food traceability or

voting.

Blockchain technologies contains Cryptography, math-

ematics, Algorithm and economic model, combining peer-

to-peer networks and using distributed consensus algorithm

to solve traditional distributed database synchronize prob-

lem, it’s an integrated multi- field infrastructure construc-

tion. The Blockchain technologies are generally composed

of six key elements.

(1) Decentralized

(2) Transparent

(3) Open Source

(4) Autonomy

(5) Immutable

(6) Anonymity

(1) Decentralized the basic feature of Blockchain, which

means that Blockchain doesn’t have to rely on

centralized node anymore, the data can be recorded,

stored and updated on multiple systems.

(2) Transparent the data’s record by Blockchain system

is transparent to each node, each of these nodes can

& M. Niranjanamurthy

niruhsd@gmail.com; mniruhsd@gmail.com

1 Department of Computer Applications, M S Ramaiah

Institute of Technology, Bangalore, Karnataka 560054, India

123

Cluster Computing (2019) 22:S14743–S14757 https://doi.org/10.1007/s10586-018-2387-5(0123456789().,-volV)(0123456789().,-volV)

further update the data as well which makes it

transparent and trustworthy.

(3) Open source most Blockchain system is open to

everyone, record can be check publicly and people

can also use Blockchain technologies to create any

applications they want.

(4) Autonomy because of the base of consensus, every

node on the Blockchain system can transfer or

update data safely, the idea is to trust form single

person to the whole system, and no one can intervene

it.

(5) Immutable: Any records will be reserved forever,

and can’t be changed unless someone who has

control more than 51% node in the same time.

(6) Secrecy Blockchain technologies solved the trust

problem between node to node, so data transfer or

even transaction can be anonymous, we only need to

know the person’s Blockchain address to do so [1].

The Structure of Blockchain: a block consists of the

block header and the block body as shown in Fig. 1. In

particular, the block header includes:

Fig. 1 Structure of Blockchain.

a Blockchain which consists of

a continuous sequence of blocks

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(i) Block version indicates which set of block vali-

dation rules to follow.

(ii) Merkle- tree root hash the hash value of all the

transactions in the block.

(iii) Timestamp current time as seconds in universal

time since January 1, 1970.

(iv) nBits target threshold of a valid block hash.

(v) Nonce a 4-byte field, which usually starts with 0

and increases for every hash calculation.

(vi) Parent block hash a 256-bit hash values that point

to the previous block.

The block body is composed of a transaction counter

and transactions. The maximum number of transactions

that a block can contain depends on the block size and the

size of each transaction. Blockchain uses an asymmetric

cryptography mechanism to validate and authenticate

transactions. Digital signature based on asymmetric cryp-

tography is used in an untrustworthy environment [2].

2 Related work

The Blockchain, originally implemented for the virtual

crypto currency, Bitcoin, is a novel peer-to-peer approach

which links a sequence of transactions or events together in

a way that makes them immutable [3].

Blockchain is a transaction database which contains

information about all the transactions ever executed in the

past and works on Bitcoin protocol. It creates a digital

ledger of transactions and allows all the participants on

network to edit the ledger in a secured way which is shared

over distributed network of the computers [4].

The amount of data in our world is rapidly increasing.

According to a recent report, it is estimated that 20% of the

world’s data has been collected in past couple of years.

Facebook, the largest online social network, collected 300

peta bytes of personal data since its inception. MIT Media

Lab provided a mechanism called ‘‘Decentralizing Pri-

vacy’’ which could protect personal data. A Blockchain is

something like a ledger in which all transactions have been

recorded, and it is shared by the participants of a Bitcoin

network [5].

Trust is the most important issue of the Blockchain. The

interactions between the nodes within the network ensure

that trust is achieved. The participants of Blockchain net-

work rely on the Blockchain network itself rather than

relying on trusted third-party organizations to facilitate

transactions. These five properties (immutability, non-re-

pudiation, integrity, transparency, and equal rights) are the

main properties supported in existing Blockchains [6].

Research Questions (A) How to categorize the bugs that

appear in Blockchain system? The answer to this question

can help us understand the loopholes in the Blockchain

systems. The categorization of the bugs should be done in

such a way that the most frequent bugs should be put under

one category so that more work and effort could be put in

addressing that category. (B) How frequently are similar

bugs coming up in different Blockchain projects? The

various Blockchain projects are developed as solutions to

different problems that work under different environments.

Are there any bugs that come up under the different

environments and technologies? If there is some frequent

occurrence of the bugs and they show similar trends across

projects then the categorization of these bugs becomes easy

based on their characteristics [7].

Security and reliability ‘‘Software Security Guidelines

span every phase of the software development lifecycle’’

and ‘‘Software Reliability Engineered Testing is a testing

method encompassing the whole development process’’.

A Blockchain must guarantee data integrity and uniqueness

to ensure Blockchain based systems are trustworthy which,

in the case of BOS, is that of security-critical systems. In

particular, there is a need for testing suites for BOS. These

suites should include: Smart Contract Testing (SCT),

namely specific tests for checking that smart contracts

(i) satisfy the contractors’ specifications, (ii) comply with

the laws of the legal systems involved, and (iii) do not

include unfair contract terms. Blockchain Transaction

Testing (BTT), such as tests against double spending and to

ensure status integrity [8].

A Blockchain is simply a cryptographically verifiable

list of data. One of the reasons for the enthusiasm around

the Blockchain is that databases do not have any crypto-

graphic guarantees of integrity, guarantees that are neces-

sary for any database operating in an adversarial

environment [9].

Information technology has become a critical innovation

in almost every industry. Those institutions or teams that

can use technology correctly and effectively play a major

role in disrupting the status quo in a leadership position.

Those that don’t keep up with technology generally do not

survive. The authors of this paper have identified the

Blockchain technology as a catalyst for emerging use cases

in the financial and nonfinancial industries such as indus-

trial manufacturing, supply chain, and healthcare [10].

The architecture as shown in Fig. 2 contains two major

parts: ULE (sensors and network) and the cloud platform

based on BC. The system is composed of connected

devices and sensors, and the collector that collect data.

These elements are connected to the internet to transfer

data securely to the Ubiquitous-IoT platform for analysis,

and processing. It allows the groups of students to access

securely to the services via integrated cloud platform based

on BC. In a BC network, students use a consensus protocol

to approve the ledger content. The cryptographic hashes are

Cluster Computing (2019) 22:S14743–S14757 S14745

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used to confirm the reliability of transactions. The con-

sensus protocol verifies that the shared ledgers are dupli-

cated, and eliminates the risk of unsecured transactions.

Obviously, collected data from devices are integrated with

the private BC ledgers and ensures shared transactions

efficiently. The distributed architecture eliminates the

requirement to centrally store data, and allows the decen-

tralization way.

In the Fig. 2 The combination of ubiquitous computing,

IoT and BC that can be effective. BC provides a resilient

distributed P2P system considering the possibility to

interact with peers in an effective manner. The connected

devices in ULE ecosystem are the elements of contact with

students and teacher. Indeed, we believe that the continu-

ation of BC integration using ubiquitous computing and

IoT will present a substantial transformation of current

ecosystems. It enhances the next generation of IoT appli-

cations regarding the features of cryptographic, security,

and decentralized model that can completely change the

organization of our economic and scientific activities [11].

Transaction data should not be trusted in the hands of

third-parties, where they are susceptible to steals and

misuse. Instead, users should own and control their data

without compromising security or limiting companies’ and

authorities’ ability to provide encrypted transactions. Our

platform enables this by combining a Blockchain with a

holomorphic encryption solution. Users are not required to

trust any third-party and are always aware of the data that is

being collected about them and how it is used. In addition,

the Blockchain recognizes the users as the owners of their

encrypted data. Companies, in turn, can focus on utilizing

data without being overly concerned about properly

securing and compartmentalizing issues [12].

Author illustrated a novel approach of personal docu-

ment management using Blockchain technology

PASS-Personal Archive Service System. Personal

Archive Service System is exploiting the features from the

Blockchain well. Whenever a subject would like to make a

trace of achievement or new characteristics, the subject can

archive it right away rather than waiting for an inquisitor

later on. The opportunity for such application is pervasive.

It can be used in online applications as well as other

applications like employment and promotion. It eliminates

a third party completely yet keeps its anonymity and

accountability [13].

Fig. 2 ULE based on Blockchain technology

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Blockchain technology, as introduced with Bitcoin,

offers an open, secure and distributed transaction ledger

(ODL). As realizations of the technology focus on imple-

menting currency systems and are based on cryptographic

primitives, they are known as crypto-currencies. The basic

idea behind the design is facilitating decentralized con-

sensus, that is, making it possible for a network of

unknown participants to jointly decide on a global view

and ordering of transactions. Transactions are grouped in

blocks and in each round, a participant is elected to propose

a valid block [14].

The difficulties of adopting BC Technology to electronic

government in China: The Cost of Establishing a New

Blockchain-based Platform, The Long-term Preservation of

Blockchain Platform Records, The Information Security of

Blockchain Technology, Management Responsibility of

the Blockchain Platform, The solution is: Standardization,

Collaboration, Management System, and Security [15].

Blockchains have risen to prominence in recent years

with the introduction of crypto currencies. As a technology,

however, they support a wider range of use cases.

A Blockchain system can be thought of as an append-only,

public ledger that keeps track of transactions made by

participants. In most cases, these transactions relate to

some (virtual) asset, and often involve moving quantities of

the asset from one account to another. Every participant in

the Blockchain system holds a local copy of the ledger and

runs a network client that relays transactions to the entire

network. The client can also inject new transactions into

the network [16].

A Blockchain is essentially a distributed database of

records, or public ledger of all transactions or digital events

that have been executed and shared among participating

parties. Each transaction in the public ledger is verified by

consensus of a majority of the participants in the system.

Once entered, information can never be erased. The

Blockchain contains a certain and verifiable record of every

single transaction ever made. Beyond currency, the

Blockchain can be used in smart contracts, record keeping,

ID systems, cloud storage and many other areas [17].

The Blockchain technology is an enabler that makes

many processes and transactions services more transparent,

decentralized, secure and democratic without the need of a

third-party organization in the middle. There is no doubt

that the role that Blockchain plays to be implemented as a

Digital Identity method, is crucial in the near future to

authenticate citizens and prove their identities for the

bunch of digital services that currently exist in this inter-

connected world. Blockchain in this area could help to

improve the way that society views identity privacy and

security. It will positively impact in different domains that

a smart city environment interacts, such as; banking and

payment, population growth forecasting, healthcare medi-

cal records, voting, digital services of governmental oper-

ations, financial services and many other scenarios [18].

In Fig. 3 it is clear that day by day in the market people

moving towards Blockchain technology in 2016 Block-

chain Revenue by Region below $5000 and in the expected

year 2025 it will be $20,000.

The rise of big data age in the Internet has led to the

explosive growth of data size. However, trust issue has

become the biggest problem of big data, leading to the

difficulty in data safe circulation and industry development.

The Blockchain technology provides a new solution to this

Fig. 3 Blockchain revenue by

region, world markets:

2016–2025

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problem by combining non-tampering, traceable features

with smart contracts that automatically execute default

instructions [19].

Bitcoin applies many technologies, they can be roughly

divided into four blocks of the wallet address generation.

These four blocks are Bitcoin transaction signature/broad-

cast, Blockchain technology and decentralized ledgers

respectively. Bitcoin is one of the most typical applications

applying Blockchain technology [20].

Many activities have been performed to improve the

trust aspect in supply chains. The technologies used still

have issues. The quality scandals recently reveal the

importance of quality from a supply chain ideology. The

traditional trust mechanism runs on three challenges

because of which these trust issues occur. The challenges

being self-interests of supply chain members, information

asymmetry in production processes, costs and limitations

of quality inspections. Blockchain is a promising technol-

ogy to address these problems [21].

Potential benefits to South African public mHealth in

implementing Blockchain: For Bitcoin implementers,

Blockchain technology has provided technology that

allows service providers to deliver: Secure peer to peer

transactions with no need for a trusted third party. Digital

signatures to safeguard content and thus the integrity of the

data, Transactional chains that store history of ownership

providing auditability, Blockchain that hold transactional

order to prove authenticity of transactions [22].

Blockchain promises a secure distributed framework to

facilitate sharing, exchanging, and the integration of

information across all users and third parties, it is important

for the planners and decision makers to analyze it in depth

for its suitability in their industry and business applications.

The blockchain should be deployed only if it is applicable

and provides security with better opportunities for obtain-

ing increased revenue and reductions in cost [23].

2.1 Blockchain applications

Finance

Services:

Asset Management, Insurance Claims,

Processing, Cross-Border Payments

Smart

Property:

Money Lending, Smart Car, Smartphone

Smart

Government:

Electronic Passport, Birth, … Wedding

Certificates, Personal Identification, Smart

Community

IoT Smart Appliances, Supply- Chain Sensors

Smart Health

Care:

Personal Health Record Keeping, Access

Control, Health-Care Management,

Insurance Processing

2.2 Blockchain characteristics

Decentralized, Distributed, Transparent and Verifiable,

Cryptographically Secured, Immutable and Non-repudia-

ble, Reduces Dependencies on Third Parties, ‘‘Trustless’’

Operation (Based on Consensus), Irrevocable and Audi-

table, Chronological and Time Stamped, Digital Ledger

[24].

Specially, in the transaction authentication, the Block-

chain technology is based on the elliptic curve digital

signature algorithm (ECDSA), which cannot cope with the

quantum attack in the actual network which will appear in

the future. If anyone uses the Shor algorithm to derive a

user’s private key from a public key to sign a variety of

unauthorized transactions, or an attacker forged a user

signature, it means that the legitimate users will lose all

their assets and privacy. In terms of resisting quantum

attacks, the research of lattice cryptography is fruitful,

which lays the foundation for the design of anti-quantum

attack signature scheme which is suitable for blockchain

[25].

2.3 Transactions not data

It is important to understand that in blockchain, you are out

hundreds or even thousands of copies of the transaction

records but not thousands of copies of the transaction data.

It is like the difference between working in Microsoft

Word and Google documents. When you collaborate on

Microsoft Word, you typically create a document, make

changes, and then send a full copy of the document to your

colleague for editing. If you chose to make those changes

without revisions turned on, it would be very difficult to

tell exactly what changed from one version of the docu-

ment to the other. And because you are sending out a full

copy of the data, it would be pretty easy for somebody to

intercept your email attachment and make a copy of it and

steal your work. Additionally, you and your colleague must

work one at a time. If you both work on the document at

the same time, you may create conflicts that are difficult to

resolve.(As per Jeanette DePatie)

Growing government regulatory requirements: The use

of Blockchain technology to achieve multifaceted man-

agement of the food market is the government’s demand,

through the system of regulatory records of the food market

transaction information. This can effectively solve the

problem of food regulatory process. According to the

understanding of the relevant government departments,

there are some requirements of government regulatory

authorities on the food supply chain:

(a) Precisely collect the information on all aspects of the

food supply chain.

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(b) Information gathering and storage of the food supply

chain from planting (breeding) to the whole process

of consumption.

(c) Can be transferred to the government regulatory

platform through the block chain technology.

These requirements match with the technological char-

acteristics of the blockchain which stores information on

each transaction. Though each private key is produced and

released by Information department of the Chinese

Government, Ministry of Agriculture is given the access to

the record of the data. This information would provide the

basis for supervision, food recall and prior warning.

Therefore, we can see that the application of Blockchain

technology meets with the government’s demand for food

supply chain system [26, 27].

Electronic Health Records (EHRs) are entirely con-

trolled by hospitals instead of patients, which complicates

seeking medical advices from different hospitals. Patients

face a critical need to focus on the details of their own

healthcare and restore management of their own medical

data. The rapid development of Blockchain technology

promotes population healthcare, including medical records

as well as patient-related data. This technology provides

patients with comprehensive, immutable records and

access to EHRs free from service providers and treatment

websites [28, 29].

As an emerging technology, blockchains definitely will

keep evolving, because of its disruptive capability across

various industries and domains. The technology is expected

to validate itself with more proof-of-concept implementa-

tions. In the field of intrusion detection, Blockchain tech-

nology can make positive impacts, but its major

applications are more focused on the following aspects, in

terms of a trade-off between benefit and cost.

• Data sharing by design nature, blockchains are suit-

able for handling the recording of events, medical

records, and transaction processing. As data manage-

ment is a big issue for a large distributed detection

system or network, blockchains have a great potential

to improve the performance through enforcing trust and

data privacy among collaborating parties.

• Alert exchange Alexopoulos et al. already introduced

how to use blockchains to secure the alerts generated by

various nodes and ensure only truthful alerts would be

exchanged. Due to the lack of real system applications,

it is an interesting and important direction for future

research studies.

• Trust computation as mentioned above, some collabo-

rative detection approaches (e.g., challenge-based

CIDN) utilize alerts to evaluate the trustiness of others,

blockchains can thus provide a solution to enhance the

process of trust computation. For instance, designing

blockchain-based approaches to verify whether the

received alert-information is unaltered or not.

As Blockchains were originally designed for crypto-

currencies, we have to avoid the situation that ‘‘Blockchain

is a solution looking for a problem’’. Indeed, we have to

still focus on our traditional solutions to some issues and

challenges, but keep an eye on such emerging technologies.

It means that a balance should always be made in a case-

by-case scenario [30].

One of the challenges in P2P design is a fair scheduling

and a general protection of the whole cluster against abu-

sive or malfunctioning nodes. Algorithms used in a single-

master or multi-master clusters do not work anymore. We

have designed a multi-level system based on one of the

main principles of crypto-currencies to achieve. Block-

chain is a key component of contemporary crypto-curren-

cies such as Bitcoin, Lite-coin and Ethereum. Blockchain

solves the main problem of digital assets—the double-

spend problem. Each digital asset such as file, email or an

array can be copied and a spectator can not determinate the

origin and the copy without a 3rd party. In P2P networks

there is no such authority. The ownership of an asset is

recorded in a public ledger. This ledger is confirmed by the

whole community of the system, so the trust is not needed

between two parties, but between one party and the whole

system. The basic principle is based on asymmetric cryp-

tographic functions. Each transaction is signed by its

owner. In order to be a valid transaction of the public

ledger, the transaction must be hashed and the hash must be

included in the next transaction [30].

Bitcoin is digital assets infrastructure powering the first

worldwide decentralized cryptocurrency of the same name.

All history of Bitcoins owning and transferring (addresses

and Transactions) is available as a public ledger called

Blockchain. But real-world owners of addresses are not

known in general. That’s why Bitcoin is called pseudo-

anonymous. However, some addresses can be grouped by

their ownership using behavior patterns and publicly

available information from off-chain sources. Blockchain-

based common behavior pattern analysis (common spend-

ing and one-time change heuristics) is widely used for

Bitcoin clustering as votes for addresses association, while

offchain information (tags) is mostly used to verify results.

Here Represent’s the use off-chain information as votes for

address separation and to consider it together with Block-

chain information during the clustering model construction

step. Both Blockchain and off-chain information are not

reliable, and our approach aims to filter out errors in input

data. A new Bitcoin address clustering algorithm is pro-

posed. Its difference from the existing ones is two-fold.

Firstly, it uses for clustering not only Blockchain infor-

mation but also off-chain information from the Internet.

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Secondly, we treat certain off-chain data types as votes

against address union in clustering process. Such approach

allows avoiding significant part of erroneous cluster merges

suggested by Blockchain based heuristics. Numerical

experiments show that the proposed approach provides

reasonable clustering results outperforming approaches

based solely on Blockchain data in terms of cluster

homogeneity [31].

3 Swot analysis of blockchain

SWOT analysis (or SWOTM matrix) is a short form for

strengths, weaknesses, opportunities, and threats and is a

structured planning method that evaluates those four ele-

ments of an association, project or commerce endeavor etc.

(a) Strengths

• 100% transparency

• Able to skip the intermediary

• Auditable trail

• Business process efficiency and productivity

• Decentralized approach

• High quality and fool proof data

• Higher efficiency

• Lower cost

• Lower risk

• More secure

• No reliance on third party

• Robustness (no SPOF)

• Speed

• Transparency

• Trust in trustless networks

• Unharmed privacy

(b) Weaknesses

• Access challenge

• Change Management

• Integration With Legacy Systems

• Lack Of Standards

• Low capacity and processing speed

• Ownership challenge

• Recent technology (not 100% developed)

• Scalability

• Security against cyber criminals

• Storage

• Technology Maturity

(c) Opportunities

• Automations

• Business Process Optimisation

• Elimination of trust necessity

• Faster (international) payment transfers

• Improved customer experience

• Increased quality of products and services

• Innovation In Almost Every Industry Especially

Banking

• Instantaneous settlements

• KYC database

• New Intermediaries

• No reliance on rating agencies

• Opportunities In IoT

• Programmable control mechanisms

• Smart contracts in insurance

• Speedup bank processes

(d) Threats

• A lot of research needs to be done

• Disappearance of existing bank jobs

• Govt. willingness to adopt

• High investments for implementations

• Huge regulatory impact

• Hype

• Legal/regulatory and compliance

• Privacy and security

• Time—consuming negotiations

• Uncertainty about the impact

4 How Blockchain works?

Someone requests a transaction

(1) The requested transaction is broadcasted to P2P

network consisted of computers known as nodes.

(2) Validation: the network of nodes validates the

transaction and user’s status using known

algorithms.

(3) A verified transaction can include crypto currency,

contracts, records or other information.

(4) Once verified, the transaction is linked to other

transactions to create a new block of data for the

ledger.

(5) The new block is then appended to the existing

Blockchain, in a way that is permanent and

unalterable.

(6) The transaction is finally complete.

Transactions are not valid until added to chain. Tam-

pering is immediately evident. The Blockchain is regarded

as safe as everyone in the network has a copy. The sources

of any discrepancies are usually evident immediately

(Fig. 4).

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1

Jagannatha wants to send money to Niranjan

2

The first block is created online and represents the transaction [Transaction is broadcasted to a Public peer-to-peer (P2P) Network consisting of multiple nodes]

3 4

Participants in the network

Block is broadcast to all participants [The network of nodes validates the transaction using known algorithms]

should approve the transaction and validate [Once verified, the transaction is combined with other transactions to create a new block of data for the ledger ]

5

Block is added to the chain [The new block is added to the existing Blockchain in a form of permanently unchangeable]

6

Niranjan receives money from Jagannatha

Fig. 4 Working nature of

Blockchain

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5 Types of Blockchain

Blockchain technologies can be divided into three types.

(1) Public Blockchain

(2) Consortium Blockchains

(3) Private Blockchain

(1) Public Blockchain everyone can check the transac-

tion and verify it, and can also participate the process

of getting consensus. Like Bitcoin and Ethereum are

both Public Blockchain. Figure 5 shows public

Blockchain.

(2) Consortium Blockchains it means the node that had

authority can be choose in advance, usually has

partnerships like business to business, the data in

Blockchain can be open or private, can be seen as

Partly Decentralized. Like Hyperledger and R3CEV

are both consortium Blockchains. Figure 6 shows

consortium Blockchains.

(3) Private Blockchain node will be restricted, not every

node can participate this Blockchain, has strict

authority management on data access. Figure 7

shows private Blockchain. No matter what types of

Blockchain are, it both has advantage. Sometimes

we need public Blockchain because its convenience,

but sometimes we maybe need private control like

consortium Blockchains or private Blockchain,

depending on what service we offer or what place

we use it [1].

6 Pros and cons of Blockchain

(1) Pros of Blockchain technology (advantages of

Blockchain technology):

(a) Disintermediation the core value of a Block-

chain is that it enables a database to be

directly shared without a central administrator.

Rather than having some centralized applica-

tion logic, Blockchain transactions have their

own proof of validity and authorization to

enforce the constraints. Hence, with the

Blockchain acting as a consensus mechanism

to ensure the nodes stay in sync, transactions

can be verified and processed independently.

But why is disintermediation good for us?

Because a database is still a tangible thing

even though is just bits and bytes. If the

contents of a database are stored in the

memory and disk of a particular computer

system run by a third party even if it is a

trusted organization like banks and govern-

ments, anyone who somehow got access to

that system can easily corrupt the data within.

Thus the third-party organizations especially

those who control important databases need to

hire many people and design many processes

to prevent that database being tampered with.

Unavoidably, all this takes a great amount of

time and money.

b) Empowered users users are in control of all

their information and transactions.

(c) High quality data Blockchain data is com-

plete, consistent, timely, accurate, and widely

available

(d) Durability reliability and longevity due to the

decentralized networks, Blockchain does not

have a centralized point of failure and is better

able to withstand malicious attacks.

(e) Process integrity users can trust that transac-

tions will be executed exactly as per the

protocol commands removing the need for a

trusted third party

(f) Transparency and immutability changes to

public Blockchains are publically viewable by

all parties creating transparency, and all

transactions are immutable, meaning they

cannot be altered or deleted.

(g) Ecosystem simplification with all transactions

being added to a single public ledger, it

reduces the clutter and complications of

multiple ledgers.

Fig. 5 Public Blockchain

Fig. 6 Consortium Blockchain

S14752 Cluster Computing (2019) 22:S14743–S14757

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(h) Faster transactions inter bank transactions can

potentially take days for clearing and final

settlement, especially outside of working

hours. Blockchain transactions can reduce

transaction times to minutes and are processed

24/7

(i) Lower transaction costs by eliminating third

party, intermediaries and overhead costs for

exchanging assets, Blockchains have the

potential to greatly reduce transaction fees.

(j) Blockchains can be used to

• Reduce total cost of ownership Blockchain

stacks offer a robust and verifiable alter-

native to traditional proprietary stacks at a

fraction of the cost.

• Manage system-of-record sharing Block-

chain technology makes it possible to give

various parties (e.g., clients, custodians

and regulators) access to their own live

copies of a shared system of record.

• Clear and settle transactions faster Block-

chain technology can facilitate the transi-

tion from overnight batch processing to

intra-day clearing and settlement.

• Create self-describing electronic transac-

tions smart contracts can use Blockchain’s

programming language to create context-

aware transactions for complex arbitration.

For example, a credit default swap could

pay out automatically according to pre-

agreed logic that watches market data

feeds.

(k) Business benefits many businesses can actu-

ally utilize the Blockchain technology into the

new trading platform and get benefited. There

are numerous benefits of adopting this tech-

nology into business. The major six benefits

are given below:

• Efficiency as in Blockchain technology,

transactions are done directly in between

the two parties without any involvement of

the third party, so transactions take place

quickly. In addition, the technology has

the ability to manage smart contracts and

commercial actions automatically. There-

fore, this directly streamlines every pro-

cess and remove the cost and time from the

transaction. For more information about

the same, you can read articles and blogs

on reliable sites that how this technology is

getting utilized in different industries.

• Auditability on the Blockchain network,

each transaction detail is recorded subse-

quently and it provides an audibility for

the asset in between two parties. It is

especially beneficial for the businesses in

which data source is needed in order to

authenticate the assets. At present, the

company Every ledger realized the benefit

of Blockchain technology and used it to

track the diamonds.

• Traceability in the Blockchain, tracking

goods in a supply chain is pretty easy and

advantageous too. The information related

to component can communicated to and

from the new owner required for the

possible action.

• Transparency transparency is one of the

major benefits of Blockchain to small,

medium as well as large businesses. As

lack of financial and commercial trans-

parency might result in bad business

relations and commerce delays. So, in

order to provide transaction details against

commercial construct, trust and trans-

parency need to be maintained in the

process for a stable relationship instead of

negotiation.

• Security on the Blockchain technology,

each transaction is recorded and verified in

the network through complex crypto-

graphic problems. The information

Fig. 7 Private Blockchain

Cluster Computing (2019) 22:S14743–S14757 S14753

123

authenticity is assured through complex

mathematical algorithms. The benefits of

IoT—Internet of Things is assured infor-

mation of the keys. This has already been

used in the Defense industry for IP

protection and verification of instructions.

• Feedback another benefit to businesses of

Blockchain technology is feedback. As the

technology has full traceability throughout

the asset lifecycle, the manufacturers and

designers of asset can easily track the

assets and accommodate the asset man-

agement in products in order to make it

more effective. Feedback allows informa-

tion regarding installation, maintenance,

shipping returns, and decommissioning.

• The bottom line while Blockchain has been

designed to serve the digital currency;

however, it can also help the businesses in

serving their needs. Therefore, business

owners should use this technology in their

business and make a boom in the industry.

In Fig. 8 it is clearly representing the main

benefits of BC: Reduce operational costs

73%, Shorten settlement time is 69%,

Reduce risk is 57%, Create revenue oppor-

tunities is 51%, Reduce cost of capital

46%, others is 10%, none is 2%.

(2) Cons of Blockchain technology (disadvantages of

Blockchain technology):

(a) Performance because of the nature of

Blockchains, it will always be slower than

centralized databases. When a transaction is

being processed, a Blockchain has to do all

the same things just like a regular database

does, but it carries three additional burdens

as well:

(i) Signature verification every Blockchain

transaction must be digitally signed using

a public–private cryptography scheme. This

is necessary because transactions propagate

between nodes in a peer-to-peer fashion, so

their source cannot otherwise be proven.

The generation and verification of these

signatures is computationally complex, and

constitutes the primary bottleneck in prod-

ucts like ours. By contrast, in centralized

databases, once a connection has been

established, there is no need to individually

verify every request that comes over it.

(ii) Consensus mechanisms in a distributed

database such as a Blockchain, effort must

be expended in ensuring that nodes in the

network reach consensus. Depending on the

consensus mechanism used, this might

involve significant back-and-forth commu-

nication and/or dealing with forks and their

consequent rollbacks. While it’s true that

centralized databases must also contend

with conflicting and aborted transactions,

these are far less likely where transactions

Fig. 8 Main benefits of BC

S14754 Cluster Computing (2019) 22:S14743–S14757

123

are queued and processed in a single

location.

(iii) Redundancy this isn’t about the perfor-

mance of an individual node, but the total

amount of computation that a Blockchain

requires. Whereas centralized databases

process transactions once (or twice), in a

Blockchain they must be processed inde-

pendently by every node in the network. So

lots more work is being done for the same

end result.

(b) Nascent technology resolving challenges

such as transaction speed, the verification

process, and data limits will be crucial in

making Blockchain widely applicable

(c) Uncertain regulatory status because mod-

ern currencies have been created and reg-

ulated by national governments, Blockchain

and Bitcoin face a hurdle in widespread

adoption by pre—existing financial institu-

tions if its government regulation status

remains unsettled.

(d) Large energy consumption the Bitcoin

Blockchain network’s miners are attempt-

ing 450 thousand trillion solutions per

second in efforts to validate transactions,

using substantial amounts of computer

power.

(e) Control, security and privacy while solu-

tions exist, including private or permis-

sioned Blockchains and strong encryption,

there are still cyber security concerns that

need to be addressed before the general

public will entrust their personal data to a

Blockchain solution.

(f) Integration concerns Blockchain applica-

tions offer solutions that require significant

changes to, or complete replacements of,

existing systems. In order to make the

switch, companies must strategize the

transaction.

(g) Cultural adoption Blockchain represents a

complete shift to a decentralized network

which requires the buy—in of its users and

operators.

(h) Cost Blockchain offers tremendous savings

in transaction costs and time but the high

initial capital cost could be limit.

(3) BC attacks could be accomplished-through:

• User identify theft

• Fraudulent sender and receiver

• Asset/node theft or impersonation

• Targeting of Bitcoin miners

• Availability of distributed nodes

• Injection of malicious code into a distributed

ledger

• Reputational risk

• Target reconnaissance

• Bypassing the onboarding and off boarding of

nodes

• Fictitious Blockchain applications will appear to

steal transaction details/personal information/be-

havior from nodes/individuals.

7 Conclusion

Blockchain is a data structure to create and share dis-

tributed ledger of transactions among a network of com-

puters. It allows users to make and verify transactions

immediately without a central authority. Blockchain is a

transaction database which contains information about all

the transactions ever executed in the past and works on

Bitcoin protocol. Blockchain technologies is contains

Cryptography, mathematics, Algorithm and economic

model, combining peer-to-peer networks and using dis-

tributed consensus algorithm to solve traditional distributed

database synchronize problem, it’s an integrated multi-

field infrastructure construction. The Blockchain tech-

nologies composed of six key elements. - Decentralized,

Transparent, Open Source, Autonomy, Immutable, Anon-

ymity. Blockchain technologies can be divided into three

types. Public Blockchain, Consortium Blockchains, Private

Blockchain. Advantages of Blockchain Technology-Dis-

intermediation, Empowered users, High quality data,

Durability, reliability and longevity, Process integrity,

Transparency and immutability, Ecosystem simplification,

Efficiency, Auditability, Traceability, Transparency, Faster

transactions, Lower transaction costs.

Acknowledgments I thank Dr. T. V. Suresh Kumar, Registrar (Aca-

demic), Prof. and Head, Dept. of Computer Applications, RIT, Ban-

galore-54. He has provided his continuous support for the completion

of this paper and my sincere gratitude to RIT management.

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M. Niranjanamurthy received

Ph.D. Computer Science degree

from JJT University, Rajasthan,

INDIA in the year 2016,

M.Phil-Computer Science

degree from VM University,

Tamil Nadu in the year 2009.

MCA degree from VT Univer-

sity, Karnataka in the year 2007

and BCA Degree from

Kuvempu University in the year

2004. He is a Assistant Profes-

sor in the department of Com-

puter Applications, M S

Ramaiah Institute of Technol-

ogy, Bangalore. His areas of interests are software testing, e-com-

merce and m-commerce, software engineering, web technologies,

Cloud Computing, Big data analytics. He has been participating in

National and International workshops/Conferences on different

aspects related to Computer Applications. Guiding Research Scholars,

Recognized Ph.D. research examiner National and International.

Published many research Articles related to Computer Science.

S14756 Cluster Computing (2019) 22:S14743–S14757

123

B. N. Nithya received MCA

degree from SPMVV Univer-

sity, Tirupati, Andhra Pradesh

in the year 2005 and BCA SV

University, Tirupati, Andhra

Pradesh in the year 2002. She is

a Assistant Professor in the

department of Computer Appli-

cations, M S Ramaiah Institute

of Technology, Bangalore. She

is currently doing a Ph.D.

degree in VT University, Kar-

nataka INDIA. Her areas of

interests are Cloud Computing,

Social Network Analysis, Data

Analytics using Python. She also has the experience of being a Life

Skills Trainer.

S. Jagannatha Ph.D. Computer

Applications degree from VT

University, Karnataka INDIA in

the year 2014, Mhil-Computer

Science degree from M S

University, Tirunelveli, Tamil

Nadu in the year 2013. MCA

degree from Bangalore Univer-

sity in the year 1993 and BSc

Degree from Bangalore

University in the year 1990. He

is a Associate Professor in the

department of Computer Appli-

cation, M S Ramaiah Institute of

Technology, Bangalore. He has

been participating in national and international workshops/

Conferences on different aspects related to Computer Applications.

Guiding Research Scholars, His areas of interests are distributed

database, object technology, and software engineering.

Cluster Computing (2019) 22:S14743–S14757 S14757

123

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