Evaluating Blockchain's Negative Effects on Socio-Economic Life

This report examines the negative impacts of blockchain technology on the socio-economic lifecycle, challenging the often-celebrated benefits of this innovation. It explores how blockchain, particularly through cryptocurrencies, affects global economic stability by potentially undermining the dominance of currencies like the U.S. dollar. The research highlights the disintermediation of traditional financial institutions and the implications for regulatory oversight, tax collection, and the prevention of illicit activities such as money laundering and terrorism financing. Furthermore, the report delves into the social consequences, including the facilitation of illegal activities like drug trafficking due to the anonymity offered by blockchain platforms. The study also touches upon the rise of crowdfunding and its potential to bypass governmental regulations, leading to unregistered and untaxed innovations. Ultimately, this report provides a critical perspective on the drawbacks of blockchain technology, urging a balanced consideration of its socio-economic implications.

Running head: INFLUENCE OF BLOCKCHAIN 1
The Negative Influence of Blockchain Technology on Socio-economic Lifecycle
Student’s Name
Institution Affiliation

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Table of Contents
INTRODUCTION…………………………………………………………………….4
1.1 Background of the study……………………………………………………………4
1.2 Statement of the problem…………………………………………………………..4
1.3 Purpose of the study …………………………………………………………….....6
1.4 Justification of the study……………………………………………………………6
1.5 Research questions………………………………………………………………….6
1.6 Aims and Objectives of the stud…………………………………………………....7
1.7 Scope of the study…………………………………………………………….........7
LITERATURE REVIEW……………………………………………………………8
2.1Overview of the Blockchain…………………………………………………………8
2.2 Negative impacts of Blockchain to economy in lifecycle………………………......9
2.3 Negative influence of Blockchain on socially lifecycle…………………………....10
2.4Theoretical Framework……………………………………………………………..11
2.4.1 Economic Theory and Cryptocurrency…………………………………..11
METHODOLOGY……………………………………………………………………12
3.1 Philosophical Solution……………………………………………………………...13

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3.2 Research Design…………………………………………………………………...14
3.3 Research Strategy…………………………………………………………………..14
3.4 Data Collection Techniques………………………………………………………...14
3.5 Qualitative and Quantitative Data Collection……………………………………….15
3.6 Limitation of the study………………………………………………………………15
3.7 Ethical Issues………………………………………………………………………..16
3.8 Timeline…………………………………………………………………………......16
References…….…………………………………………………………………………19

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1. INTRODUCTION
1.1 Background and Rationale of the Study
According to Alavi et al. (2018) blockchain technology is an immutable ledger,
indisputably and an inventive technological innovation in the world. It deals with currencies
which were invented and which are being developed into a greater invention since they were
improvement. Blockchain technology has pursued the attention of world’s financial departments
including United Kingdom and United States Treasury due to its influence in the economy of
various countries in the globe. However, it has introduced an innovative forms of
cyptocurrencies in the world of market currency business via the internet that has authorized
circulation of the digital statistics or data. Additionally, the technological invention does not
permit copping or editing of businesses’ transaction data. Example of blockchain innovation
foundation on cyptocurrencies include Litecion, Namecoin, Swiftcoin, Bitcoin, Mezancoin and
Bytecoin. The cyptocurrencies allow individuals to transact business online without intervention
of the third party, thus, the transaction rate of the business involved is lower contrasted to other
forms transaction involving real currency such as US dollar or Euro. Allen, Berg and Novak
(2018) stated that blockchain technological advancement and invention has the aptitude of not
recording and storing information from financial statements but also not keeping data from any
action which has value. The technology has relieved investors from wasting time in financial
institutions queue up waiting to be served but it has an interface where two individuals can work
on one document at the same time. The document is be termed has the Google Docs app. In
addition, blockchain the Google Docs app permits two individuals the right to access the
documents at the same time and all of them are able to see what is taking place, consequently,
decreasing the corruption cases (Yermack, 2015).

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As observed by Avital et al. (2016) is that blockchain technological transaction cannot be
operated by any specific body and the blockchain system does not fail at any moment has its
durability and reliability. Conversely, various studies have failed to look at the destruction being
cause by blockchain to the socio-economic lifecycle has it cannot be sketched or traced. This
increase chances and capability of fanatics and felons using it to conduct criminal activities has
Bal (2015) suggested. The research project proposal hereby will bridge the gap by determining
the negative impact of blockchain technology on the socio-economic lifecycle. The research
project also look into how the innovation has negatively influenced the coinages, and determine
the reliability and validity of how the social lives of the people has been influenced by the
innovation of blockchain foundation (Blundell-Wignall, 2014). Some authorities does not
identify the blockchain innovation because they do not generate revenue from the individuals
operating their businesses using blockchain. According to article written by Chen et al. (2018)
“Smart Learning Environments” is that most researchers’ only emphases on the reimbursements
of the system but forgoes the drawbacks of the innovation. Consequently, this study will bridge
the gap by determining the negative impacts of blockchain innovation.
1.2 Problem of the Study
This study will aim at understanding the negative impact of blockchian innovation in
socio-economic lifecycle. However, blockchain technological has conveyed several debates
concerning economic of the world and its current trend. Also, it is expected that the blockchain
cyptocurrencies will escalates the economy because of the astringent method it have o the
economy of different countries in the globe.
1.3 Purpose of the study

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The key purpose of the research project study will be to investigate the negative impact
of blockchain innovation on the socio-economic lifecycle.
1.4 Justification of the Study
The study will be relevant has it is going to find out the delinquent about blockchain in
socio-economic lifecycle that most of the researchers’ have not emphases on. However, most
scholars only concentrates on the positive impacts of cyptocurrencies but not the negative
impacts. The study will therefore, focuses on bridging the gap on the negative impacts of
blockchain innovation rather than its positive influence. In addition, the will help individuals and
regime in making decision on how to grip blockchain technological advancement.
1.5 Research Questions
The research proposal questions will include the following;
I. Do people who transact business through blockchain pay taxes to their governments?
II. What are the negative effects of blockchain on the global economy?
III. How does cyptocurrencies affect communal life negatively?
1.6 Aims and Objectives of the Study
Aims and objectives of the study will comprise the following;
I. To determine if those individuals who carry out transaction through blockchain pay revenues
to regimes.

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II. To find out the negative impact of blockchain innovation on the economics of various
countries.
III. To establish if cyptocurrencies impact communal lifecycle.
1.7 Scope of the study
The primary targets of the study will be the regimes and investors who want to engage in
blockchain investment. The study will also assist governments to make decision and
entrepreneurs’ on whether to validate blockchain or not authenticate it.

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2. LITERATURE REVIEW
2.1 Overview of the Blockchain Foundation
According to Murphy et al. (2018) is that blockchain innovation can be termed has
technological approach of reorganizing business activities, that results to solving of problem with
trust which makes it good for economic purposes. The innovation provides methods in which
transaction data can be recorded and get secured by a ledger system that is public. The publicity
of the ledger systems provides transparency and accountability therefore, reducing the cases of
corruption in the cryptocurrency business. The data secured by the system cannot be edited,
furthermore, the blockchain system is not owned by anybody or any firm, it is a public system
run by the public. The system has impacted the financial market by introducing its first app “the
bitcoin” which is digital money where a person can send or received unlimited quantity of cash
without the help of the third party. Supplementary applications created as a result of blockchain
innovation are Power Ledger, Car Vertical Dash and Wabi.
Shapiro (2018) had observed that blockchain has changed how business are done from
traditional systems where a business person could waste too much time to queue for transactions
services to digital system where transactions are done faster in a secure method. Blundell-
Wignall (2014) suggested thatto Research done by suggest that the blockchain usage will
increase at a higher rate in the future in that it will be used for many purposes in many trade
activities including stores and shops. Conversely, researchers have concentrated in the positive
sides of the system and forget to study its disadvantages and negative impacts on the economy
and social lifecycle (Blundell-Wignall, 2014). The exploration hereby will try to bridge the gap

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obtainable by studying the negative special effects of blockchain on both economy and society
respectively.
2.2 Negative special effects of Blockchain on the Economy Lifecycle
The blockchain innovation technology has been described by economic experts as the
major contributor of the business process internationally. Blockchain through its cryptocurrency
applications like bitcoins is challenging the standard of dollar in the stock exchange market.
According to the world economy statistics is that the stability of the dollar standard have been
lowered because of the cryptocurrency. Almost all the international traders and businesses use
United States dollar for financial activities. Therefore, if the dollar standard is lowered then the
global economy is affected badly. Shelton, Haynes and Creghan (2018) suggested that the
cyptocurrencies transactions do not benefit the United States dollar in any way hence reducing its
value in the market. The introduction of over 1000 bitcoin cryptocions has affected the U.S.
dollar standard has deduced by (Turner, Cardinal and Burton, 2017).
The second impact of blockchain is where it has cut the middleperson from business.
The financial businesses globally need the services of bodies like banks, SWIFT, and clearing
houses who take some fees in turn for providing such services (Shelton, Haynes & Creghan,
2018). But, the blockchain protocols like Bitcoin and Dash have cut the use of middlemen to
process and authenticate transactions. The action has disrupted the normal global money transfer
protocol where the middle firms check and authenticate the payments to reduce money laundry
and terrorisms funding. The main reason why governments have allowed middlepersons to
authenticate and oversee transactions is to prevent transactions for illegal ammunition activities,
drug trade and other criminal activities. Middlepersons also ensure that anybody who involve in

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business transactions pays the taxes to his or her government but the blockchain does check the
person conducting transactions. It also becomes too hard for law enforcement agencies to trace
any illegal transactions from the cryptocurrency data because the system protects the
participants. Whicher, Philbin and Aronson (2018) that the cyptocurrencies will disrupt the
functions of central banks because the firms have no control over the applications.
The consequence of blockchain technological innovation on the economy is being termed
has the crowdfunding as stated by (Yermack, 2015). The blockchain technology has brought the
process of crowdfunding. Also, Whicher, Philbin and Aronson (2018) describes has
crowdfunding the process of finding capital for discoveries, thoughts and any other innovation
through the internet. Crowdfunding has been made by blockchain to be easier in that the
blockchain application are used as the platform of linking the inventor and the sponsors. Hence,
tycoons have fundamentally ignored the government interventions on how to register their
register innovations, consequently, the inventions are not being taxed because they are not
registered. The inventors pursue for sponsor or funders in the internet via the blockchain
applications and fund their merchandises could have not seen the light because of poor quantity
and quality. As a consequence, crowdfunding does not symbolize the equality in economy of the
world has suggested by (Shelton, Haynes & Creghan, 2018).
2.3 The negative influence of Blockchain in Social Lifecycle
On the other hand, Whicher, Philbin and Aronson (2018) is that actions different actions
by blockchain have subsidized to some activities that impact mankind social lifecycle. The
blockchain application has improved the drug marketing within the internet impact the health of
individuals in one ways or another. The drug lobbies do their financial business transactions

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through blockchain podia because of its confidentiality and anonymity that enable the facilitation
of crime activities. The law enforcements are given hard task to track the criminals who use the
blockchain applications. In addition the system supports drug trade in, terrorism and money
laundry has stated by (Yermack, 2015). For instance, criminals and terrorists can buy fire arms
via the platform has it is inconspicuousness and solitude from law enforcement, thus in turn
affects the humankind ways of living or social life.
2.4 Theoretical Framework.
2.4.1 Economic Theory and Cryptocurrency
As observed by Yermack (2015) is that in a rational marketplace there are normally
common principles that applies to the pricing of the available commodities in the marketplace.
Also, Whicher, Philbin and Aronson (2018) added that correspondingly, there are force that
impact the value of the currency in the market, and the currency in commodity is the value of the
stored item in the bazaar. However, has globe moves from gold standards the Keynesian
economics models became of more interest to most experts in the globe. The Keynesian model
was first introduced by John Maynard Keynes who is British economic theorist in the seminal
depression has explained by (Whicher, Philbin & Aronson, 2018). The model or theory states
that the ability to impact external economics by modifying taxes and government expenditure or
spending.
Currently, the cryptocurrency has overturn the economic model of Keynesian has it have
introduced a virtual currencies (Yermack, 2015). According to Shelton, Haynes and Creghan
(2018) is that Bitcoin is the most, known and widely used, but other cyptocurrencies also exist in
the world of blockchain innovation technology. To link the economic theory and the

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cryptocurrency it clearly come out has most of the chain stores have embraced the used of the
currencies. The various store that uses cryptocurrency are online store that sales electronics and
textile trending fashion cloths has mentioned by (Shelton Haynes & Creghan, 2018).
3. METHODOLOGY
Katz (2017) has described methodology as the procedure that facilitates the examination
on a given research problem to provide an appropriate solutin concerning the problem. Katz
(2017) also added that it helps in operational process in which academic study is being carry out
to properly extract research in a particular field of study. Conversely, a comprehensive technique
of research goals, scheme and method will be undertaken in the section of the research project
proposal. The study methodology part will be divided into various section including
philosophical position, research design, research strategies, primary Approach, data analysis,
limitaions of the study and timeline.
3.1 Philosophical Approach
In the perspective of different authors, research approach can be categorized into
epistemology and ontology has deduced by (Holub & Johnson, 2018). Generally, fieldwork will
be done by a researcher to find out an issue in one approach known as epistemology whereas the
metaphysic philosophy will not be appendicle (Gans & Halaburda, 2015). The researcher
determination will be significant to resolve the problem in stipulations of the approaches
research theory (Gans & Halaburda, 2015). Thus, epistemology and ontology of the research
approach will be about the negative impacts of blockchain in the socio-econmic life.
3.2 Research Design