Blockchain Technology

DAM G2

Blockchain Technology

Revolutionizing Digital Transactions and Beyond

Group Members: Francisco, Guillermo, Pablo, Alfonso, Santiago

INDEX

1. What is blockchain? (Francis)

2. Advantages and disadvantages of blockchain (Alfonso)

3. Blockchain applications (Pablo)

4. Blockchain challenges (Guille)

5. Things that can be done with the blockchain (Santiago)

DISCUSSIONS

How It Works: Transaction Verification – Nodes validate transactions using algorithms. Block Formation – Verified transactions are grouped into blocks. Linking Blocks – Each block contains a unique cryptographic hash. Consensus Mechanisms – Methods like Proof of Work (PoW) or Proof of Stake (PoS) validate transactions. Immutable Record – Once added, blocks cannot be altered or deleted.

What is Blockchain?

Blockchain is a decentralized digital ledger that records transactions securely, transparently, and permanently. Consists of a series of blocks linked together, ensuring security and resistance to fraud.

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Advantages

Advantages & Disadvantages of Blockchain

Decentralization – No central authority.Immutability – Data integrity is guaranteed. Transparency – Public ledger for accountability. Security – Cryptographic protection. Smart Contracts – Automated, self-executing agreements. Traceability – Useful in supply chains and financial records.

Disadvantages

High Energy Consumption – Especially PoW-based blockchains.Scalability Issues – Slow transaction processing. Storage Requirements – Growing blockchain size. Implementation Costs – High development expenses. Irreversibility – No transaction rollbacks. Regulatory Uncertainty – Legal frameworks still evolving.

NFTs & Digital Ownership

Finance & Cryptocurrencies

Blockchain Applications

Smart Contracts

Supply Chain & Logistics

Healthcare & Medical Records

Voting & Digital Governance

Digital Identity & Security

Blockchain Challenges

Major Challenges

Scalability –As blockchain networks grow, transactions become slower and more expensive because every node must verify them. Solutions like Layer 2 protocols (e.g., Lightning Network) and sharding aim to improve efficiency. Energy Consumption –Blockchains using Proof of Work (PoW), like Bitcoin, consume massive amounts of energy. Some networks are switching to Proof of Stake (PoS), which is much more efficient, as seen in Ethereum 2.0. Security Risks – 51% attack vulnerability. Regulatory Uncertainty – Blockchain is secure, but it’s not immune to attacks. A 51% attack happens when a group controls most of the network, allowing them to manipulate transactions. Additionally, smart contract vulnerabilities have led to major hacks, like the DAO attack on Ethereum in 2016. Privacy Concerns – Governments have not fully defined regulations for blockchain and cryptocurrencies. Some countries ban them, while others struggle to create laws that protect consumers without limiting innovation. Legacy System Integration –Blockchain transparency is great for trust, but it can expose sensitive data. Solutions like privacy-focused blockchains (e.g., Monero, Zcash) help hide transaction details. Smart Contract Vulnerabilities – Many industries still rely on traditional systems, making blockchain adoption slow and expensive. Companies like IBM and Microsoft are developing hybrid solutions to ease integration.

Decentralized Finance (DeFi) Growth – Reshaping traditional banking. Metaverse & Web3 – Secure, blockchain-based digital interactions. Tokenization of Assets – Real estate, stocks, and intellectual property on blockchain. Improved Sustainability – Development of eco-friendly consensus mechanisms. Cross-Border Payments – Faster and cheaper transactions worldwide.

Future of Blockchain

What Can Blockchain Achieve?

Discussion Topics

Cryptocurrencies: Future or Fad?

Discussion Topics

Regulation vs. Decentralization

Discussion Topics

Ethics and Privacy

Bibliography

Blockchain powers Bitcoin, Ethereum, and Decentralized Finance (DeFi), enabling secure transactions without intermediaries. Stablecoins offer price stability for global trade.

Non-Fungible Tokens (NFTs) authenticate digital assets, such as artwork, music, and collectibles, enabling creators to monetize their work directly.

Conclusion: Disadvantages of Blockchain

Despite its transformative potential, blockchain technology faces several significant challenges that hinder its widespread adoption. High energy consumption, particularly in Proof of Work (PoW) systems, raises environmental concerns and limits sustainability. Additionally, scalability issues result in slow transaction processing, making it difficult to handle large volumes of data efficiently. The cost of implementation and maintenance can be prohibitive, especially for smaller businesses that lack the technical expertise and resources to develop blockchain solutions. Moreover, the irreversibility of transactions poses risks, as errors or fraudulent activities cannot be undone. Regulatory uncertainty further complicates blockchain adoption, as governments and institutions struggle to establish clear policies. While these disadvantages present obstacles, ongoing innovations in blockchain technology—such as energy-efficient consensus mechanisms and improved scalability solutions—offer promising avenues for overcoming these challenges. As the technology continues to evolve, addressing these limitations will be crucial for its broader acceptance and integration into mainstream industries.

Blockchain-based voting systems provide transparency and security, reducing election fraud and increasing trust in democratic processes (e.g., Estonia's blockchain initiatives).

Conclusion: Advantages of Blockchain

Blockchain technology offers numerous benefits that make it a transformative innovation across various industries. Its decentralized nature eliminates the need for intermediaries, reducing costs and enhancing efficiency in transactions. The immutability of data ensures integrity, preventing fraud and unauthorized alterations. Additionally, transparency fosters trust, especially in sectors like finance and supply chain management, where accountability is crucial. Security is another major advantage, as cryptographic algorithms make data nearly impossible to tamper with. The introduction of smart contracts automates processes, increasing efficiency and reliability. With these advantages, blockchain has the potential to revolutionize digital transactions, supply chain operations, governance, and many other fields. As the technology matures, its impact will continue to grow, shaping the future of secure and decentralized systems.

Companies like Walmart and IBM use blockchain to improve product traceability, prevent fraud, and ensure quality control in the supply chain.

Blockchain-based identity solutions enhance privacy and security, reducing identity theft and giving users control over their personal data.

Automated self-executing contracts remove intermediaries in agreements, ensuring trustless transactions (e.g., blockchain-based insurance claims and legal contracts).

Secure and immutable storage of medical data, allowing better patient care and preventing counterfeit drugs in pharmaceuticals.