Blockchain Technology: Architecture, Features, Challenges, and Applications

This report discusses the architecture, features, and challenges of blockchain technology, as well as its applications in currency and smart contracts. It also analyzes the social and technical aspects of blockchain technology.

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Table of Contents
Introduction....................................................................................................................................2
Discussion.......................................................................................................................................2
Block chain.................................................................................................................................2
Architecture...........................................................................................................................2
Feature...................................................................................................................................2
Challenges..............................................................................................................................2
Application of block chain..........................................................................................................2
Currency.................................................................................................................................2
Smart contracts......................................................................................................................2
Social technical aspects..............................................................................................................2
Conclusion......................................................................................................................................2
References......................................................................................................................................2

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Introduction
Blockchain can be defined as digital, decentralization of various kinds of transaction related to
cryptocurrency [10]. In this technology different kinds of records are added in chronological order. It
helps markets participants to keep a track of transaction related to digital currency without the need of
any kind of recordkeeping in a central way [3]. In it each node gets a copy of blockchain which can be
downloaded automatically. Blockchain is also known as distributed ledger technology (DLT) which is
being used in variety of commercial applications. At present this technology is used for verifying
transactions with in digital currencies. It is also possible understanding transaction with digital
currencies as much as possible.
In the coming pages of the report various aspects of blockchain like architecture, features and
challenges has been discussed. After that application of blockchain in two domains like currency and
internet of things has been discussed. The last part of the report focus on social technical aspects of
blockchain technology.
Discussion
Block chain
Architecture
The architecture of blockchain has list of parameter like
 Platform of blockchain
 Role of Nodes in Blockchain.
 Various transaction will help in creation of blocks needed for running nodes.
 Implementation of security which generates blocks.
 It focuses on the process of adding new number of blocks.
Block chain itself is considered to be an application which runs on network of various distributed
servers [11]. The main application is considered to be a transaction database which can be achieved by
sharing of all the available nodes. So it can be concluded that it is 100% decentralized transaction
system.
Block chain is nothing but a network for peer to peer communication which works like IP
protocol on internet [6]. A P2P is considered to be flat topology which no kind of centralized node.
Implementation of blockchain consists of two kinds of records namely blocks and transaction.

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Transaction can be easily made by making use of mobile wallet or any other kind of client application
[7]. Blocks are mainly associated with recording of sequence of transaction which mainly takes place in
block chain.
Feature
Bitcoin is considered to be mother of blockchain technology [4]. There are large number of
features of blockchain like increased capacity, immutability, better security and lastly settlement at
much faster rate.
Increase Capacity: One of the key features of peer to peer technology is that they can easily
increase the total capacity of network [5]. Folding is considered to be a good example of increasing
network security by making use of various computers.
Better security: Blockchain can easily provide better security as there is no issue of failure of
shut down of whole network. Blockchain are mainly secured by various computers which run nodes and
provide conformation on various networks [8]. Public blockchain makes use of their own currency like
incentive mechanism which can be used for securing transaction based on ledger.
Faster settlement: Traditional kind of banking services can be considered to slow and it also
larger amount of time for settlement [2]. This can be considered as a vital factor behind the need of
upgradation of the system. Blockchain can be considered to be best method which can be used for
transferring money at much faster speed. This can ultimately save time and money for an entire
organization.
Immutability: Creation of immutable ledgers can ultimately result in proposition of value for
blockchain [9]. Any kind of centralized database can be corrected and generally depends on third party
for keeping the information secured.
Challenges
Irrespective of benefits of blockchain technology there are large number of challenges
associated with blockchain like initial cost, adding up with legacy system, amount of energy
consumption, perception or idea of public and lastly privacy and security.
Initial cost: Implementation of blockchain technology can easily productivity, efficiency and
lastly reduction of expenditure [6]. The software which is needed for running blockchain technology is
organization is developed specifically for an organization. So it can be considered to be expensive for

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purchasing and developing it on in-house. Along with software cost organization needs qualified person
for managing this technology.
Integration with system: For moving into blockchain based system an organization must have
remove the previous system or it should find a way for integrating existing system with blockchain [4]. In
many cases it is seen that blockchain may be difficult for handling the function which is needed by an
organization.
Consumption of Energy: Bitcoin makes use of proof of network for making transaction which
are made on blockchain [7]. This whole process needs computation of mathematical problem which are
complex in nature. It can be again used for verifying process and transaction for securing of network.
Perception of public: The major public makes use of existence and use of this particular
technology [9]. Technology can be considered to be revolutionary in various industries but still
knowledge and benefits of distributed technology is limited.
Privacy and Security: Blockchain was initially designed for providing visibility to public. Bitcoin
blockchain is designed in such a way that it can provide access to large number of people who have
made transaction on the network [5]. A blockchain is generally customized for needing the needs and
specification of task.
Application of block chain
Currency
A blockchain is known to be cryptocurrency which is also known as protected distributed ledger.
Bitcoin is perfect example of blockchain technology. It was placed in front of public in the form of digital
money [8]. It takes up consideration of its successors and competitors present in the market. Bitcoin can
be considered to be traditional form of currency by which they can easily add certain number of ways
which can be used for trading. But it cannot be used for playing the basic role of currency due to some
medium number of exchange which can be used like a medium of exchange [11]. In bitcoin each kind of
transaction takes major amount of energy and comprises of many kinds of risk.
Smart contracts
Distributed ledgers are able to code of simple contracts which will execute when specific
condition is provided. Ethereum is known to be an open source project on blockchian which was built
for understanding the possibility. Ethereum comes up with potential to provide usefulness of blockchain
on changing world [5]. At technology development of technology smart contract can be used for

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performing simple kinds of function. A certain amount of derivative will be paid when various financial
instrument hits the target provided. It focuses on the use of blockchain technology and bitcoin enabling
the whole process of payment to be automated in nature.
Smart contracts are considered to be complex in nature and it comes up with potential of simple
transfer of assets which has the power to execute in large fields which can range from legal process to
insurance premium [8]. A smart contract can easily perform similar action like crowdfunding like sharing
of projects, collection of donation and setting up of goals. It mainly works with the help of third party.
An individual can make use of smart contract for receiving funding until a goal has been reached.
Social technical aspects
Any kind of transaction in blockchain technology is considered to be faster and much cheaper
when proceeded through it. Social impacts of block chain technology are considered to be direct. It
mainly takes blockchain for running blockchain and it depends on size and way it works. In some cases, it
can be quite intensive in nature also [3]. It is also said blockchain technology was high responsible for
large amount of energy consumption in different regions of the world. The best effect of block chain is
its contribution for changes in social values and large number of structure which are associated with it
[10]. Blockchain technology is not considered to be solution to large number of problems.
Conclusion
From the above discussion it can be concluded that is report is all about Blockchain technology.
In the discussion portion of the report three important aspects of blockchain technology that is
architecture, features and challenges has been discussed in details. After that an analysis has been
provided regarding blockchain technology in two domains that is currency and internet of things. In the
last part of the report social technical aspects of blockchain technology has been discussed and
analyzed. Blockchain is used in variety of application like system for recording of digital identity and
tokenization. It also creates a platform for smart contracting and automated governance. The
architecture of blockchain consists of various parameter like platform, nodes of blockchain, security
measures has been discussed in details. Various kinds of features of blockchain technology like
increasing capacity, improvised security, settlement at faster rate and lastly immutability has been
discussed in the above pages of report. Different kind of challenges involved in blockchain technology
like initial cost, integration with system, energy consumption, privacy and security issues has been
discussed in details.

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References
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