BLOCKCHAIN USE CASES

I. Trade Finance Use Case

I. OVERVIEW
Trade finance, or procure to pay (P2P), is the name given to the activity by which businesses and organisations in the
private and public sectors source, order, invoice, purchase, pay for and reconcile the delivery of raw materials,
commodities, machinery and goods in their supply chain.
⮚ Trade Finance Software
Trade finance is usually configured and administered via integrated software systems and a dedicated operating
model managed by trained staff or specialist external partners.
⮚ Trade Finance Policy
Every organisation will have varying policies over control of its trade finance data, security and access that will
also play a large part in determining where and how a trade finance system is deployed.

II. KEY TRADE FINANCE CONCEPTS

Legal Entities
● Buyer - In trade finance a buyer should be able to demonstrate the financial means to pay its liabilities as and
when they fall due.
● Supplier - A supplier is a legal entity, often (but not always) ‘external’ to the buyer. Suppliers must be solvent and
have the capacity to execute the buyer’s purchase orders.
● Bank or Finance Provider - ‘Bank’ means any qualifying deposit- taking, payment processing, credit broking or
finance provider in a trade finance value chain.
● Receiver - A receiver is the legal entity responsible for overseeing the movement of goods and materials in the
trade finance value chain. A receiver may be neither a buyer nor a supplier (nor even a bank).

Actors in Trade Finance Stack

● Project Manager - A project manager is a professional actor in the trade finance value chain with responsibility
for ensuring the smooth day-to-day running of the ordering, delivery and receipt of goods and materials.
● Auditor - After the facts of delivery and payment, an auditor will act on behalf of both or either of the buyer and
supplier, ensuring that the supplier supplied the correct goods and materials and that payment, reconciliation and
accounts have been maintained to the required standards.
● Bookkeeper - Keeping accurate records of all aspects of trade finance is key to the smooth running of any trade
finance operating model. Bookkeepers may be both human employees and enterprise- level software systems
and databases.
Types
● Payment on Delivery (also known as ‘Payment versus Delivery’)
In this type of trade finance, the buyer will settle, via cash, a supplier’s invoice immediately following delivery to
the buyer or the receiver.
● Payment by Rolling Line of Credit
This type of trade finance relies on the bank to settle all the buyer’s liabilities to suppliers (based on POs) on behalf
of the buyer.
● Payment on Account
This type of trade finance involves a revolving credit account between buyer and supplier.

Models
● Internal Trade Finance - This model is where an organisation establishes, sets up and manages its own trade
finance process, software system and operating model.
● Externally Outsourced Trade Finance - This model reflects the desire of some buyers to outsource their
procurement.

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 ● Ad Hoc or Project- related Trade Finance - As it implies, this model looks at trade finance solutions as project
driven.
● End- User Computing Trade Finance - This is an area of trade finance which is focused on the enterprise.

III. TRADE FINANCE CYCLE

Figure 7.1 shows the main, high- level stages of a typical trade finance process
Request - The trade finance process begins with a request made within an organisation for materials or goods to be
bought.
Request for Quotation - The next step is for the organisation to process the internal request and publish it as an external-
facing ‘Request for Quotation’, RFQ. The RFQ is usually in the form of a detailed written statement in template form.
Quotation - Following further internal processes, and subject to potentially complex rules within the organisation
concerning price, quality and other attributes of each individual supplier’s offer, the winning supplier quotation will be
selected by the organisation.
PO - A PO sets out the details of the organisation’s confirmed procurement plus price, delivery dates and other
information. Acceptance of a PO by the parties constitutes a legally binding agreement between them.
Goods Receipt - Once the PO has been agreed and executed (i.e. signed), the supplier will – at the specified time and
location – deliver the requested goods and materials to the organisation. This is a critical stage in the trade finance cycle.
Supplier Invoice - Immediately after delivery/ receipt the supplier will issue its invoice and present it for payment by the
organisation, as is its right.
Release Payment - So, following a process of checking and validation of the invoice vs. delivery, the organisation, either
acting alone or via a bank or finance provider, makes cash payment of the invoice to the supplier.
CN/ DN Adjustment - There is then a final stage, if necessary, of credit note (CN) and/ or delivery note (DN, related to
the receipt) adjustment by the organisation and potentially the supplier where there may be final changes made
following reconciliation etc. of the actual delivery vs. PO. At this point the standard trade finance process ends.

IV. BLOCKCHAINS IN TRADE FINANCE

There are two key reasons why trade finance has been promoted as a prime, early candidate for migration to blockchain:
risk and money.

The following stresses are among the known issues within typical trade finance models:
● Credit Note/ Delivery Note
● Fraud in Delivery and Payment
● Change of Supplier/ Third Party

Blockchains are already in use in some trade finance solutions as they are perceived to fix existing problems and reduce
risk. Using blockchain technology in trade finance also reduces stack size and means that indirect benefits, such as cash
flow optimisation and faster invoice payments, may be realised.

V. TRADE FINANCE DEMONSTRATION PROBLEMS AND USE CASE

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 CASELET: ‘Improved Credit Management, Lower Risks and Costs’

Current state: How credit is assessed, calculated and repaid using non-blockchain data and systems.

Buyer issues an RFQ for the next major phase in the Kent bridge building/ civil engineering project to
several suppliers with whom it has worked successfully previously. RFQ responses from suppliers are
received and validated; one winning quotation is selected by the buyer. Buyer and bank agree a line of
credit to cover all the expected POs for the RFQ and deliveries, including a tolerance of x% for contingency.
The bank sets aside the required liquidity and awaits the flow of delivery notes etc. from supplier and
receiver. Each delivery note, once approved, is paid by the bank on behalf of the buyer and, at the end of
the process and following reconciliation; the whole credit facility is repaid to the bank by the buyer.

Future state: How the same would work in a blockchain environment.

Buyer issues an RFQ for the next major phase in the Kent bridge/ civil engineering project to several
suppliers with whom it has worked successfully previously. RFQ responses are received and validated; one
winning quotation is selected by the buyer.
Because the bank is a node on the blockchain along with the buyer, each delivery note is paid on a case-
by- case basis and settled by the buyer at the same time, lowering the size of the credit facility, cutting
the total cost of the credit, accelerating the speed of payment for the supplier and reducing the total
liabilities and risk for the bank.

Table 7.3 shows a comparison of example trade finance problem statements and the benefits provided by future- state
blockchains versus current- state technology

In addition, there are other benefits that pertain to the future- state (blockchain- powered) trade finance solution as
follows:
Bank benefits: With a more streamlined ledger offering immutability and transparency, banks benefit from blockchains in
trade finance.
Buyer benefits: Solutions on DLT in general (compared to current- state stacks) offer buyers greater control and
transparency over the whole procurement cycle.
Supplier benefits: DLT trade finance offers the prospect of faster invoice payments, quality assurance, managing the
supplier’s own supply chain and workforce, and better relationships for good suppliers with their customers.

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Project management benefits: Blockchains provide potential trade finance benefits in respect of the risks facing project
managers in delivery, potential errors in reconciliation and the task of reporting back to both buyer and supplier. DLT
offers potential solutions with accuracy, transparency, immutability and portability.

II. Healthcare Software and Data use case

Healthcare – the provision of scarce personal medical services and support to people and communities – is a vital,
worldwide global industry. It is primarily a human-to-human service.
Medical data is different to other data: it’s strictly confidential, highly personal, varied and critical in the sense that
getting medical data wrong – or worse, losing it – could constitute a potentially life-threatening outcome for vulnerable
or very ill patients.

HEALTHCARE SOFTWARE AND DATA POLICY, PAST AND PRESENT.

In the paper era – the provision and keeping of healthcare records was cumbersome and time (and space) consuming. If
a patient moved residence, for example, the paper records would ultimately need to follow them.
In digital/modern era, legacy paper medical records are often required to be scanned and digitized creating a burden or
barrier to adoption of a digital-only solution.
Blockchain brings key benefits to healthcare data, adding the attributes of trust, equitable access and immutability to
the data already deployed as medical and research records.

DIFFERENT ROLES IN HEALTHCARE SOFTWARE

The Role of Physicians and Nurses in Healthcare Software
Physicians and nurses are front-line staff in healthcare. They are the most important constituency of healthcare
software users, even more so than patients.

The Role of Patients in Healthcare Software

Patients are the principal subjects and objects of healthcare software and data. They are also recipients of care, who
may be testbeds for treatment and drug analysis.

The Role of Hospitals and Surgeries in Healthcare Software

Hospitals, clinics and doctor’s general practice/surgeries also users of healthcare software. Not just as buildings, but
also as nodes of care provision, stores of drugs, resources, centres of excellence and so on.
For healthcare software and data, the hospital is a node of users, records and integrations.

The Role of Pharmaceutical, Diagnosis and Testing and Records in Healthcare Software
Clinical research, diagnosis, testing and records. The role played by this group is that of non-primary care and
engagement: making sure that the data and outcomes for patients, as managed by physicians and nurses, is progressed,
audited and accessed in the right way at the right time and can be used for clinical research to design and develop new
and better drugs, for example.

BLOCKCHAINS IN HEALTHCARE SOFTWARE

Healthtech is defined as the forward-looking group of software applications and services designed and built for specific
use by physicians/ doctors, nurses, patients, hospitals, surgeries and pharmaceutical, diagnosis, testing and record-
keeping companies.

KEY HEALTHCARE SOFTWARE AND DATA CONCEPTS

Healthcare Software
Healthcare software is no different from the software languages and operating systems found anywhere else .
· Software Used - Healthcare software doesn’t have a type or standard; as with other industries, each individual
healthcare software design and deployment is considered on a case-by-case basis.

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· Applications - Applications (not phone apps) are service and functional layers in the healthcare stack and are
deployed on a case-by-case basis.
· Operating Systems - A single operating system would create a common platform for support and enterprise cost
control but, equally, a single point of failure from a commercial, security and control risk standpoint.
Healthcare Data
Healthcare data isn’t only medical records. There is a huge range of static, dynamic and transactional data that is
exchanged between parties, data for archive and data for clinical analysis.
· Privacy - Privacy of data is often cited (by patients) as the most important requirement of any healthcare system.
· Security - Security of data, alongside the issue of privacy, is a key requirement of all primary care users regarding
healthcare data.
· Trust - The question of trust is connected to security and privacy. If these two attributes are present, it is likely
that trust in the healthcare system will be earned by the software provider and granted ‘on licence’ from the users.
· Access- Equitable access to data is a cornerstone of user satisfaction.

Healthcare Software and Data Transactions

Healthcare is not, at face value, a transactional industry, but in software and data terms it is, because every time in action
or activity occurs within a system the data moves between actors and parties and is updated as a transaction accordingly.
Physician Updates. Physicians/doctors are daily users of healthcare systems. Writing notes of appointment, diagnoses,
prescriptions, further appointments and sourcing consultant reviews of patients are typical examples of physician
transactions in the system.
Prescriptions. Each diagnosis, if required, has a prescription that is written for the patient.
Treatments. Healthcare treatments range from physiotherapy, a course of drugs, in-or-out patient care, and cover a
plethora of complex, customisable and flexible requirements.

Healthcare Software and Data Outcomes

After patients get ill they also get better. Understanding and tracking that journey and the outcomes it creates is a critical
role played by healthcare software and data.
Hospital Discharge. Leaving hospital (moving from being an in-patient to out-patient) is a physical change for the patient
and also a healthcare software and data outcome.
Long-term Health. Value for money for healthcare providers, especially in a world of scarce (i.e. expensive) medical
resources, requires a careful balance of investments, and a focus on the long-term health of patients.
Clinical Research. A secondary outcome of primary care is the availability of data on patient illness and disease, diagnoses,
treatment and long-term health outcomes. Taken together, this information is exactly what’s required by the clinical
research professionals in pharmaceutical companies.
Specializations. Healthcare software and data are commonly encountered at the general practice and/or emergency
room ‘point of delivery’. However, much healthcare software and data is clustered around medical specialization as
follows:
⮚ Surgical
Surgical software is on the rise. Robotic keyhole surgery, virtual reality simulations, remote surgery and ‘augmented’
surgery are specialist software and data-powered solutions.
⮚ Pediatrics
Our children will enter their adult lives (as patients) having been ‘born digital’. This means that, from early childhood,
their medical records, possibly even their personal diet and exercise regime, will be system based.
⮚ Gerontics
The ‘Baby Boomer’ generation (those born between 1944 and 1964) are the largest and wealthiest cohort that the
human race has ever witnessed. Healthcare software and data have a natural and compelling use case for gerontic
applications.

Breaks in the Healthcare Software and Data Model

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Wrong Diagnosis. It is rare, but serious misdiagnosis is potentially a significant error in primary care environments. Second
opinions are vital. Their use is manifestly obvious and in this regard healthcare software and data are ready (and non-
judgmental) allies in the cause.

Lost Data. ‘Lost’ data is a seemingly innocuous phrase that can, in healthcare terms, have serious consequences for
patients and sometimes for primary caregivers too. Having made a diagnosis and prescription, for example, a physician
needs continuing access to that information in order to help the patient reach their good outcome.

Wrong Prescription. It’s hard to measure the impact of a wrong or inaccurate prescription on patients: much depends on
the severity or otherwise of their disease.
Healthcare Software Demonstration Problems and Use Case

Caselet 1: ‘Accident & Emergency’

Current state: Distributed software and data solutions make effective and rapid emergency treatment more costly, slower
and error-prone than the potential alternatives.
A patient, Harry, is taken ill at a restaurant. Harry is treated at the scene by the emergency ambulance paramedics. Harry
responds well treatment under the supervision of the expert staff at UCH A&E and eventually he is moved to the recovery
ward, where he is kept under close medical supervision. Harry’s family arrive several hours later (from out of London) and
are reassured by the A&E primary care staff (physicians/doctors and nurses) that Harry has suffered a cardiac arrest but,
given his treatment and the speed with which he was brought to A&E, he has a fair chance of recovery.
Future state (using blockchains): A decentralised blockchain means better access to data and a rapid sharing for key
information, especially in an emergency situation. A patient, Holly, is taken ill at a theater in the Convent Garden area of
London, UK. Holly is treated at the scene by the emergency ambulance paramedics. The paramedics forward all of Holly’s
data to the University College Hospital (UCH), London, A&E team plus their current GPS location. There is no requirement
for a further case write-up as the paramedics’ diagnosis and treatment of Holly while driving her to the hospital are already
saved on all participating users’ NHS app, so the paramedics are free to race to their new callout. Holly is treated and when
she feels better, has her case history shared to her GP’s surgery and the out-patient clinic nodes on the blockchain,
following which her long-term recovery will be managed. But the decentralized medical records and case management
system embedded within the patient’s NHS app (and the ‘super user’ versions of the app used by paramedics and hospital
staff that integrate data for that) mean that not only does Holly get faster, more personalized and accurate treatment on
arrival at the hospital but also her family, GP and long-term recovery support team are also fully updated and more
efficient in their primary and secondary care roles.

Caselet 2: ‘Exercise Saves Lives?’

Current state: Patients get the best outcomes when their lifestyles are improved ‘pre-medicine’. But how to keep track of
that?
A busy doctor’s surgery is running a campaign of better preventative health with patients. A pattern of long-term
healthcare improvement (compared to the previous year) is detected within the first six months of the campaign, but then
tails off.
Future state: How the same would work in a blockchain environment.
A busy doctor’s surgery is running a campaign of better preventative health with patients. A cohort of local patients are
signed up to join the new campaign and are asked to download a new NHS-provided app and to take home a small,
electronic blood pressure monitor. Over a period of time, the local patients participating use the app daily to record their
diet, exercise, heart rate and blood pressure on a blockchain.
The caselets give a specific, practical example of the benefits of enterprise-level blockchain in medicine and healthcare
software and data:

Physician/doctor benefits: Blockchains assist with trust, meaning that the doctor–patient relationship, based on trust, is
enhanced.

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Patient benefits: Blockchains provide a decentralised store of immutable, trustworthy and transparent data for better
outcomes.

Supplier benefits: Blockchains provide hospitals, clinics, pharmaceutical companies, clinical researchers and suppliers with
reliable, decentralised data that can be used equitably for better non-primary care outcomes.

Healthcare industry benefits: Blockchains provide planning accuracy, transparency and security of data.

III. Retail Investment Use Case

Retail investments is the activity of buying and selling financial instruments, for example, mutual funds, equities/ shares
and fixed income bonds. Investments are usually held in an electronic portfolio and the investor usually has access to
advice and an ongoing portfolio management. service.
How Retail Investments Work in the Real World
Retail investments, in the real world, operates in a mixture of mechanical and human processes. Advice and professional
support for investors.
The following activities are typical (but not exhaustive) of a professional retail investments service:
■ Investor onboarding
■ Portfolio construction
■ Portfolio maintenance
■ Investor maintenance

ACTORS IN RETAIL INVESTMENT STACK

1. Investor- the direct (or indirect) owner of the underlying investments and cash.
2. Adviser- a professionally qualified human being in support of human fact finding and decision making.
3. Portfolio Manager- an adviser but is usually not client- facing and is often highly technical in nature.
4. Investment Manager - focused on the specific requirements and issues relating to the underlying investments

Key Retail Investments Concepts

1. Retail Investments Software- in practice is that all retail investments currently sit on, and are operated by, some
form of software application and database.
a. Software Used-often referred to as ‘platforms’ but also include either their own customizable ‘user
experience’ layer and/ or an API- style access point.
b. Applications-run on standard, third- party or open- source applications and these are configured within
each platform accordingly.
c. Operating Systems (OS)
2. Retail Investments Data- both ‘static’ and ‘individual’ in nature.
a. Privacy- fundamental principle of the industry, subject to regulatory and tax reporting and for which
most investor data is anonymized.
b. Security - there is an assumed requirement for ‘bank level’ security and encryption at all stages of the
retail investments lifecycle.
c. Trust- a contractual, ethical and practical concern, as without even a basic level of trust, all investors
would simply withdraw their cash and investments immediately.
d. Access- without the right level of data access, therefore, a retail investments system that was absent this
functionality would fail.
3. The Retail Investments Stack- a stack is an abstract data type that serves as a collection of elements, with two
principal operations: push, which adds an element to the collection, and pop, which removes the most recently
added element that was not yet removed.
a. The UX Layer
b. The Account and Advice Layer
c. The Portfolio Administration Layer
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 d. Depository Layer
e. Nominee Layer
f. Custody Layer
g. Cash Layer
h. Transaction/ Counterparty Layer
4. Specialisations
a. Algorithmic Trading- process by which the trading of instruments and securities is managed by highly
efficient computers that rely on nanoseconds of price information access to their advantage.
b. Predictive Analysis and AI

Breaks in the Retail Investments Model

a. Cash Break- occurs when the cash (client money) in a retail investments system no longer reconciles.
b. Stock Break- an unreconciled instrument or security position.
c. Reverse Transaction

How Retail Investments Would be Different Using Blockchains

a. Decentralization – removing needs for intermediaries
b. Fractional Ownership – allowing investors to purchase small fractions of assets.
c. Transparency- tamper proof record of all investment.
d. Global accessibility – Increases access to investment opportunities across borders.

IV. Real Estate and Land Registry Use Case

Land Registry: is a public institution that maintains, securely and equitably, the paper and digital records of local real
estate and as much as possible of the legal, taxation and ownership data attributes that pertain to each plot or parcel of
land.
Cadastre: (land registry’s sister word) is normally a parcel-based and up-to-date land information system containing a
record of interests in land (rights, restrictions and responsibilities). It usually includes a geometric description of land
parcels linked to other records describing the nature of the interests, the ownership or control of those interests, and
often the value of the parcel and its improvements.
Land registries and cadastres perform very similar functions, they both provide a secure and validated store of property
and ownership data for use by buyers, sellers, lawyers, surveyors and governments in the administration and management
of real estate.

Core Land Registry Functions and Features:

● The Paper Register: All land registries contain a significant paper element. It’s the prima facie source material
for most land.
● The Plots: also called the land, it is the core object of reference of land registry. Each individual land entity
will vary in size, shape and position.
● The Survey: It’s an ongoing, ‘never-ending’ process. This applies not just to new builds, but also to older pieces
of land that may contain new or updated data.
● The Land Registry: Independent, trusted, and authoritative; reliable and with public access: a land registry
must be accountable. Usually overseen by local government and form part of a national network of
government agencies that ensure consistency.
● Access to the Land Registry: Land registry access must be secure, equitable and transparent to all users. A
land registry must be read-only because an editable land registry would not work.

Legal Entities:
1. Land Registry: The key legal entity in the land registry is the land registry itself. The land registry entity
has an agency that has the power and capacity to act on its own behalf and is usually operating under
charter or instruction from the local democratic institution that established it and oversees it.
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 2. Owner/Seller/Landlord and Buyer/Tenant: These entities may be human/natural persons, as in you and
me; or they may equally be legal persons (companies, governments, investors, trustees etc.).
3. Realtor/Real Estate Agent: Help sellers and buyers, landlords and tenants agree terms over buying and
selling property and in renting.
4. Bank or Finance Provider: The legal entity in the context of a land registry and one of its main
users/consumers. They are often the legal ‘owner’ of the title of a piece of real estate.
5. Surveyor: The surveyor, as an independent quality assurance entity, operates as a neutral and expert
actor in the land registry.
6. Local Government: The ultimate owner of the land registry. Without local government involvement, most
land registries would not work properly.

Actors In Land Registry Stack:

1. Land Registry Administrator: Manages and maintains the land registry itself. This ranges from ‘standard’
updates (such as purchase and sale transactions, boundary changes, tenancy and mortgage information)
to more major edits, for example, new-build developments, planning application notices and outcomes,
and critical infrastructure work such as new roads or railway development.
With blockchains, some of the day-to-day work of a land registry administrator would be carried out
by smart contracts.
2. Auditor: The role of the auditor is that of independent auditing of the land registry’s accounts, books and
records, and cash handling. Whatever the technology used to underpin the land registry, it is assumed the
role of auditor remains constant.

Types of Common or Frequent Real Estate, Land/Property Scenarios that are found in Land Registry:
● Scenario 1: Administering Existing Plots of Land
The majority of land registry scenarios/cases relate to the administration of existing plots of land, property or
real estate. Existing plots of land come with legacy documentation on paper, a potentially detailed transaction,
debt, tenancy and tax history, and a requirement for expert oversight for the resolution of complex updates
and contentious matters.
● Scenario 2: Setting Up and Administering New Builds
Property developers work with land registries for new-build development. Whatever the designs are put
forward, and regardless of the granting of permission by the local authorities and/or the success of the project,
the land registry will keep careful records of the plans proposed in its database for future reference. Should
the new-build project go forward to completion, then the new plots of land will also need to be fully
established in the land registry and maintained.
● Scenario 3: Large-scale Infrastructure Projects
New roads, railways, bridges, airports and urban developments require intensive use of a land registry, not
only for mandatory purchase, clearance and demolition. Major infrastructure work includes redevelopment
of sites, the design and approval of plots of land and (often) disputes.

Models:
1. Land Registry Model
The example here is the United Kingdom’s ‘HM Land Registry’ agency:
HM Land Registry registers the ownership of property. It guarantees title to registered estates and
interests in land. It records the ownership rights of freehold properties, and leasehold properties where the
lease has been granted for a term exceeding seven years.
The definition of land can include the buildings situated upon the land, particularly where parts of
buildings at different levels are in different ownership. It is also possible to register the ownership of the mines
and minerals which lie within the ground, as well as airspace above property where this is in separate
ownership.
2. Federal Cadastre Model
The example here is the German cadastral system:
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 This land registration system contains all rights of ownership and other rights on land and buildings. By
establishing this system, the importance of a good working cadastral system grew very fast. The description
of the land parcels became the official and legal register of parcels as a part of the land register. Cadastre
developed from a system for taxation of land to a register that gives guarantee to the right of land tenure.

Land Registry Significant Challenges:

1. Taxation
The role of the land registry is directly related to land taxation and the exercise of tax-charging and tax-
collecting rights by the government on real estate and landowners.
Tax reform itself isn’t a compelling use case for converting land registries to blockchain but will appeal to
governments and tax authorities.
2. Paper
Paper, the legacy standard of almost all land registries, is a major challenge to the ongoing development and
adoption of land registry technology.
Paper retains some advantages: it can be legally verified, accurate and acceptable, and is readily used in
property litigation and notarized real estate transactions.
However, ingesting paper into a new land registry blockchain (via scanning, tagging and categorization) is
not a technological challenge, but will cost the land registry in terms of time and resource.
3. Tokenization
Land registries, through blockchain technology, will enable land and real estate owners to ‘tokenize’ their
property.
What does this mean? One challenge is that ‘tokenization’ means different things to different audiences.
In our case, we are referring to tokenization as a form of fractional or unitized securitization of real estate and
property.
Using a reliable, secure, immutable and equitably accessed land registry as a base, property owners and
investors may decide, legally, to securitize their newly tokenized land.
The benefits are greater liquidity; fractional ownership options; tenancies that might be shared in nature;
and collectivization of land, real estate and property.

Benefits of Enterprise-level Blockchain in Land Registries:

● Property development and planning. Better land registry records imply a more efficient, fairer and
transparent land development planning applications process, with options for neighbors to engage, as well as
validated new valuations and contingent planning capacity.
● Simpler and fairer taxation. Property sale, inheritance/probate, estate management and access to future
planning for taxation purposes are all potentially enhanced with a fully digitized land registry. When the tax
authority is a node on a cadastral blockchain, there is less contention and fewer surprises for estate planners,
for example.
● Population analysis is easier and simpler to access where there is a land registry of significant coverage in
both rural and urban areas. Immigration, the provision of local infrastructure such as education and
healthcare, for example, might all connect with land registry data for more accurate decision making.

V. Central Bank Currency Use Case

Central Bank - A national bank that provides financial and banking services for its country’s government and commercial
banking system, as well as implementing the government’s monetary policy and issuing currency.
Central Bank Functional Areas:
1. Treasury - formal department of government that deals with national, federal, devolved/state and regional
financial policy and economic strategy.
2. The Mint - central bank entity tasked with the responsibility of printing and managing the national currency.
3. The Banking Regulator - delegated to the central bank given its proximity to the banking activity in general and
its direct/market relationship with the participant banks themselves.
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 4. Payment Processing and Settlement - core responsibility of central banking, both in terms of domestic
payments/settlement and foreign exchange and international settlement.
5. Access to Central Bank - focused on wholesale actors. In a decentralized world, such as blockchain-powered
(tokenized) fiat currencies, there is the further potential to offer all currency holders a permissioned central bank
account.
Key Principal Legal Entities
1. Central Bank
2. Payment Clearance
3. Economic Oversight
4. Banking System Regulator
5. Government
Actors In the Central Bank Stack
1. Central Banker
2. Regulator
3. Cashier
4. Auditor
Central Bank Software
Real-time gross settlement (RTGS) systems are specialist funds [cash] transfer systems where the transfer of money or
securities takes place from one bank to any other bank on a ‘real time’ and on a ‘gross’ basis.
● Settlement in ‘real time’ means a payment transaction is not subjected to any waiting period, with transactions
being settled as soon as they are processed.
● ‘Gross settlement’ means the transaction is settled on a one-to-one basis without bundling or netting with any
other transaction. ‘
● In the United Kingdom, for example, the RTGS system is further defined by the two main functional or payment
‘pipes’ travelling through it:
o CHAPS (Clearing House Automated Payment System) - cash-to-cash and the UK’s high-value settlement
system
o CREST (Certificateless Registry for Electronic Share Transfer) - cash-to-equity, the UK’s securities
settlement system
Central Bank Challenges
Challenge 1: Less Cash, But More Digital Cash
How will central banks deploy ‘stable coins’ in a way that fits consumer requirements without sacrificing control
over currency and economic targets and policy, for example.
Challenge 2: Financial Inclusion
If a central bank currency is only available digitally, and/ or via a phone, then those vulnerable or already- excluded
consumers might suffer again from lack of access and see a second, more serious, financial exclusion.
Challenge 3: Tokenization
The challenge for central banks will be to maintain their ability to oversee and regulate these tokenized markets.
On one hand, for example, there is the likelihood that central banks themselves will continue in their role of ‘platform’ for
payment, settlement and reconciliation.
Caselet 1: ‘A Day in the Life of Pounds Sterling’

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Benefits of Blockchain in Central Bank:
● Less liquidity required to be held internally by ‘retail banks’
● Less capital adequacy required to be held at the central bank by participating banks and other financial
institutions
● Immediate reporting and money supply updates by the central bank
● Greater transparency between payment counterparties and faster gross settlement.

VI. FUND MANAGEMENT USE CASES

I. Chapter Overview
The Mutual Fund
● A mutual fund is a legal vehicle for pooled investments, from a range of subscribers, managed by a professional
fund manager and whose stated goal is to grow the capital and income offered by the fund for the benefit of its
subscribers
● Mutual funds may be either ‘active’ or ‘passive’. An active fund is typically more expensive than a passive fund as
it is looked after dynamically by a professional human fund manager who is qualified as a professional investor. A
passive fund also sometimes referred to as an ‘index’ fund is algorithmic in design and tends to ‘track’ a specific
market or sector of one or more global economies.
● There is significant debate over the merits and demerits of active vs. passive funds:
In 2007, Warren Buffett made a bet against hedge-fund manager Ted Seides that a simple S&P 500 index (passive
fund) would outperform a basket of at least five hedge (active funds) over the course of a decade. The bet’s time frame
started in January 2008 and concluded at the end of 2017. In 2018 Buffett is the winner.

Mutual fund management is a service industry dedicated to investing, managing and administering the life savings and
retirement investments of the world’s consumers and savers.

The Fund Management

● Fund management is a traditional and conservative industry that has, for decades, lagged behind the digital
progress made in the related banking and retail investment management industries.

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 ● Fund management is a narrow and deep practice, meaning that a fund will typically restrict itself to a certain range
of underlying investments or to seeking a specific outcome for its subscribers.

The Fund Managers

● A fund manager is responsible for implementing a fund’s investing strategy and managing its portfolio trading
activities.
● The fund can be managed by one person, by two people as co-managers, or by a team of three or more people.
● Fund managers are paid a fee for their work, which is a percentage of the fund’s average assets under
management (AUM).
The Fund Manager has two sides, the buy and sell side.
Buy Side - operate with discretion over their subscribers’ pooled capital in the mutual fund to buy and sell underlying
investments
Sell Side - Fund managers deal or trade from market counterparties
Fund Management Software
FMS use in fund operations in the US in terms of accounting function such as calculation of net asset value, preaparation
of annual reports to shareholder, payment of fund expenses and the like
Fund Management Policy. Policy towards fund managers encourages greater transparency, accountability, value for
money and resilience. For example, in the UK, the Financial Conduct Authority’s (FCA) banned trail commission on 31 st
December 2012:
● Trail commission was an annual fee paid to financial advisers by their customers over the lifetime of products
such as pensions, with-profits bonds and unit trusts. It was also paid to intermediaries, such as discount brokers
and fund platforms, that recommended or enabled the purchase of funds or other investments.Trail commission
was a percentage fee, typically 0.5%, taken out of the sum of your investment each year.

Blockchains in Fund Management

Many fund managers are curious about block chain but unwilling to change their own fund management technology and
architecture alone. Fund management is an ideal candidate for block chain adoption. Funds are ledger-driven, with
multiple, distributed subscribers on the one hand, and a diversified and wide range of securities and cash in the main fund
portfolios on the other. In such a case the potential benefits of a decentralized ledger, such as a blockchain, with its
immutability, transparency and efficiency, are obvious and directly applicable.
The Fund Management Company
● The fund management company is the commercial entity that runs a fund.
● Some fund management companies in the UK are referred to as ‘discretionary fund managers’, meaning they are
professional financial advisory firms
The Exchange-Traded Fund (ETF)
An exchange-traded fund that is characterized by its behavior as an exchange-traded instrument.
The Hedge Fund
A hedge fund is a collective investment vehicle, similar to a mutual fund, but typically with a more flexible investment
philosophy, more aggressive investment return expectations, and much more active fund management.
The Fund Management Regulator
● The fund management regulator is usually part of a territory’s general financial regulatory framework.
● In the EU, there exists a fund management regulator in the form of the European Securities and Markets Authority
(ESMA).
Fund Management Processing and Settlement
● Mutual fund trades execute once every day after the financial markets close. If you miss the trading deadline for
a particular day, your mutual fund trade won’t get executed until the following day.
● However long the settlement period is, fund buyers have to make sure they have cash available to make the
purchase by the settlement date, and fund sellers won’t be able to use cash proceeds for other purposes until the
trade settles.

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 ● Money-market mutual fund transactions follow special rules. That allows shareholders to use money-market
mutual funds as sweep options for brokerage accounts without having to wait an extra day to clear purchases and
sales.

Key Fund Management Concepts. Including Legal Entities, Actors, Types, Model, Stress, and Challenges

1. Legal Entities
The Fund Manager- managing a fund vehicle and the professional human being who is employed by that firm to specifically
manage an individual fund.
The Fund- A fund is a limited liability company.
The Fund Shareholder/Unitholder- are entitled to share in the profits of the fund and their rights and responsibilities are
usually set out in the fund’s various legal documents.
The Underlying - The range of securities is collectively referred to as the ‘underlying investments’.
The Investment Manager- oversees the selection, distribution, risk assessment and portfolio construction of the
underlying investments in the fund.
The Custodian- The role of the custodian is to hold the underlying investments, in electronic form, in the event that the
fund and/or the fund manager becomes insolvent.
The Bank- Banks are the custodians of the cash in the fund (mirroring the role of the custodian, which has custody of the
securities in the fund).

2. Actors in the Fund Management Stack

The fund management stack is the logical arrangement of technology applications, legal entities, people and
processes, and business rules that together make up the functional structure of a fund management business.
Business Architecture- Business architecture is a mature and established model of roles and responsibilities, people and
processes, and defining and setting clear boundaries between who does what within the fund manager operating model
itself.
Data Architecture- Data architecture describes how data is managed.
Application Architecture- describes the patterns and techniques used to design and build an application. A pattern
describes a repeatable solution to a problem.
Technical Architecture- The technical architecture typically defines the communication networks, security, hardware, and
software that are used by the application.

3. Types
Scenario 1 – Net Asset Value (NAV)
Most funds calculate and publish a daily net asset value (NAV) valuation of their combined cash and underlying
investments, and use this NAV to further calculate the number of shares or units in issue and their (daily) price.
NAVs can be both time-consuming and complex to administer and calculate.
Scenario 2 – Fund Rebalancing
Fund rebalancing is the process of administering the make-up of a fund’s underlying investments, based on factors such
as risk, market volatility, in-house investment philosophy and analysis.
Fund rebalancing can be fraught with challenges, such as in-flight share and unit transactions (and underlying transactions)
and transfers, market volatility, fees and charges, and liquidity.
Scenario 3 – Corporate Action
A fund corporate action requires approval and legal consensus to be achieved by the fund manager from the various share-
and unitholders of the fund.
Collecting and validating the approval or rejection for a specific corporate action from the share- and unitholders in the
fund is a formal requirement for fund managers and takes significant time, effort, resources and costs to complete.

4. Models
Model 1 – Active Fund Management

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Active fund managers predominate in part due to the desire of fund share- or unitholders to ‘delegate’ the management
of the underlying and the overall investment strategy to a professionally qualified and regulated fund manager.
Model 2 – Passive Fund Management
Passive fund management, by and large, is more mechanically simple and less complex than the people, processes and
technology required for active fund management. Retail consumers, in particular, feel an affinity with passive funds as
they are transparent and easy to understand.

5. Stresses in Fund Management

● Due to COVID 1 Growth of funds under management (FUM, also known as assets under management, AUM) has
been affected.
● In Funds Europe’s Global Industry Report they revisit a projection from PwC in 2015 that predicted AuM in the
global asset management industry would reach a record $101.7 trillion by 2020 from a 2012 total of $63.9 trillion.
● Asset Management 2020: A brave new world’, also predicted a compound annual growth rate for AuM of nearly
6%.
● According to a report from Willis Towers Watson the global AuM of the world’s 500 largest fund managers fell 3%
in 2018 to $91.5 trillion. Steve Edgley, head of institutional for Europe at Fidelity International, now expects a base
growth rate of between 1% and 3% a year over the medium to long term.

6. Challenges
Challenge 1
● ‘Cost-to-serve’ ratios, i.e. the costs faced by financial advisers who typically recommend and therefore distribute
mutual funds to their wealthy clients, are relatively high.
✔ This is a function of the underlying lack of process automation in financial and wealth advisory firms, which can
often see the most expensive and time-poor staff, the qualified and regulated advisers themselves, occupied with
more mundane tasks such as assisting prospective and existing clients with onerous paperwork.
✔ The obvious solution to the problem (process automation) looks some way off as the main platforms supporting
the distribution of financial advice and fund portfolios are expensive, cumbersome and in a dominant position due
to immature competition and regulatory pressures.
Challenge 2
● Fund management is a highly regulated industry with a range of evergreen and new regulatory and thematic
reviews constantly threatening the more profitable parts of the fund management business.
✔ Commission, high annual management charges, opaque ‘platform’ charges and recurring ancillary revenues
have all either been reduced or are in review by national and supranational government agencies and
regulators.
Challenge 3
● Incumbents in the fund management industry appear, in the minds of challenger entrepreneurs and investors, to
be complacent, inefficient and ripe for disruption.
✔ Not all traditional fund managers are dinosaurs; and not all new entrants are nimble and profitable either.
With the arrival of fashionable financial technology entrants, fund management seems to be seeing a real
wave of change with optionality for retail and institutional clients alike.
USE CASES
Caselet 1: ‘The NAV is Wrong – Often’
Current state: In the current state, Hardwood Funds are struggling to get the NAV for its funds accurate on a monthly
basis, meaning, on certain days in the month, the fund failed to publish the required NAV by the published time each day,
in this case, 12 noon. The share and unitholder must wait until the next working day for the correct price and NAV to be
disseminated. This causes non-trivial issues such as performance calculation issues, reconciliation breaches and client care
and conduct issues for distributors.
Future state: Hardwood models a new Ethereum-powered decentralized ledger as the new core database and smart
contract of the fund’s NAV and other administration functions. By the use of blockchain all data derived from daily
calculation of new cash and instrument holdings within the fund are recorded within the Hardwood nodes. The outcome

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of this work is to streamline the Hardwood fund NAV calculation in a smart-contract framework. The new NAV process is
fast, efficient and mechanical, and is derived from immutable data from the previous cumulative periods.

Caselet 2: ‘We’re Advisers – We Need Accurate Information’

Current state: The ‘onboarding’ process for a new Sterling & Co client is time consuming on some of Sterling’s most
qualified and expensive people: their advisers. In an effort to reduce this ‘cost to serve’, Sterling & Co initiated a strategic
review of their portfolio system, which holds principally fund shares and units (aside from cash), to see if there can be a
better way to deliver good outcomes for their clients.
Future state: Sterling & Co decide to test a new Ethereum blockchain, offered to them by Hardwood Funds who are
themselves testing the technology for their own funds. Sterling becomes a new ‘node’ on the Hardwood Funds blockchain,
and effectively opens one or more wallets for Hardwood Fund tokens on the blockchain.
Sterling links their own portfolio system via access to the Hardwood Funds blockchain to carry out transactions between
wallets on the block chain to investors’ ownership. On that basis, Sterling & Co can reflect the relevant positions in their
own, non-blockchain, portfolio management system, thereby avoiding the need to change their investment manager staff
and client access tools. Sterling now get an accurate and timely NAV into their portfolio system every day from the
Hardwood Funds blockchain for each and all of Sterling’s investors.

VII. SUPPLY CHAIN INSIGHTS FROM ERP USE CASES

ERP and Blockchain Integration for Supply Chain Transformation

• ERP transforms supply chain operations from order booking to order fulfillment.
• Integrating ERP with blockchain can enhance supply chain performance.
• Key integration capabilities are required for blockchain to integrate with enterprise systems.
• Connecting all partner ERP systems to a blockchain network can provide a seamless supply chain transaction
across partners.
Importance of Data Quality for ERP Systems
● Quality of master data information is crucial for system performance
● ERP systems rely on data for transactions, processing, and decision-making
● Most data reside in private silos within companies, and even government data is not easily available

THREE SETS OF MASTERDATA

First Set: Item information - which includes details about products and their corresponding names/designations in
customer and supplier systems.
Second Set: Customer name - which refers to the business entity that the enterprise transacts with.
Third Set: Supplier name - which refers to the business entity that supplies goods to the enterprise.

BLOCKCHAIN-DRIVEN ENGINEERING DESIGN

Here is how blockchain can be used for engineering design:
SINGLE PLATFORM: Blockchain can unify partners globally, simplifying identity, verification, data provenance, sourcing,
and reconciliation. It accelerates design and prototyping, and encourages joint manufacturing.
CERTIFYING AGENTS: Certifying agencies in manufacturing share data through physical or digital copies, making auditing
cumbersome. Connecting their ERP systems through blockchain enables transparency, simplifying transaction processes.

BLOCKCHAIN-DRIVEN ORDERING AND PROCUREMENT

Procurement - Blockchain improves procurement processes by enabling smart contracts, product tracking, streamlining
payments, reducing disputes, providing a unified messaging system, and facilitating supplier benchmarking.
Ordering—omnichannel - Blockchain can help overcome the challenges of omnichannel distribution by transforming
order management through private permissioned blockchains, which provide real-time updates and visibility to
customers, minimizing order transmission delays.

BLOCKCHAIN-DRIVEN DEMAND AND SUPPLY MANAGEMENT

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Demand management - Blockchain can improve supply chain demand management by enabling real-time data sharing
among trusted partners, eliminating the need for forecast approvals and reconciliations, and improving forecast
accuracy.
Supply management - The use of open and permissioned blockchains can enable high levels of supply visibility and
transparency, reducing administrative effort, cost, and counterfeit products, and improving compliance with
governmental regulations and accelerated customs clearance.

BLOCKCHAIN-DRIVEN MANUFACTURING AND LOGISTICS MANAGEMENT

Manufacturing management: Blockchain can help manufacturing by providing a permissioned distributed ledger to
collate data, enable secure sharing, and promote trust and transparency among partners, addressing challenges like
supply chain fragmentation, auditing compliance, counterfeit components, and innovation.
Logistic management: Blockchain technology can address transparency, cost, trust, and data availability challenges in
the logistics industry by enabling inventory visibility, reducing intermediaries, and improving transparency.

CHALLENGES AND FUTURE OUTLOOK OF SUPPLY CHAIN WITH BLOCKCHAIN AND ERP
● ERP and blockchain can be integrated to connect individual ERP systems to the blockchain for better supply
chain management.
● The future of the supply chain is one where blockchain can track activity beyond an enterprise's boundaries.
● Challenges in adopting blockchain for supply chains include infrastructure and network, interoperability, on-
boarding and maintenance costs, data storage costs on blockchain, data validation latency, payload size
restriction, regulatory and legal acceptance, and trust.
● Cost, network infrastructure, and legal aspects are the key challenges.
● Data security is also a concern as data is shared outside the enterprise.
● Challenges may change over time as technology and laws evolve, and new challenges may arise.

VIII. NEXT GENERATION ENTERPRISE ARTIFICIAL INTELLIGENCE

Public and Private Blockchains

Public Blockchains are trustless (meaning that users need to trust the software, but not human counterparties such as
banks or governments) and permissionless (meaning that anyone can join and use the network).
Identity is pseudonymous (meaning using an address hash (a 32-character alphanumeric sequence to transfer funds)) or
fully confidential (using ZKPs (zero-knowledge proofs) or another technology feature to mask sender and receiver address
and the amount sent).

Private Blockchains on the other hand are trusted (meaning that users need to know and trust the human-based network
provider and counterparties (individuals, companies, and governments)), and permissioned (meaning that users are
known and credentialed)

PUBLIC BLOCKCHAINS: BITCOIN AND BLOCKCHAIN TECHNOLOGY

Blockchain technology is a software protocol which enables the secure transfer of money, assets, and information via the
Internet, without the need for a third-party intermediary such as banks or other financial institutions.
Transactions are validated, executed, and recorded chronologically in an append-only and tamper-resistant database,
where they remain always available on the Internet 24/7 for on-demand lookup and verification.
Blockchain and Business
Blockchain is a new technology that offers secure and transparent ways of conducting economic and information
transactions in businesses. Blockchain distributed ledgers are the latest and most profound form of Fintech (financial
technology). Blockchain distributed ledgers are fundamentally creating a new way of conducting the economic and
information transactions that are central to business operations, by using secure communications networks.

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These two factors, the real-time transactability of all assets on Blockchain systems and the real-time information climate
about network activity (magnitude and type, not specific details), work together to produce a new class of trust which we
term algorithmic trust.
Algorithmic trust is not the computerized instantiation of trust between human parties, but a new concept of trust that
emanates from the use of the computational system as a replacement for traditional mechanisms of governance, control,
and interaction.

Distinction Between Blockchain Technology and Distributed Ledger Technology

The general form of the technology is distributed ledgers, and the specific form of the technology is Blockchain technology
(literally blocks chained together by cryptographic hashes).
Blockchain technology is a type of distributed ledger technology.
Distributed Ledger Technology (DLT) is a broader concept that refers to any system of decentralized data storage and
processing that distributes data across a network of computers.

Key Properties of Blockchain Technology: Ledger, Distributed, Immutable

First, by ledger, what is meant is something like a large online database or Google or Excel spreadsheet, in which rows are
added or appended. A row or cell (a “Blockchain cell”) can contain any kind of digital information such as account balances
(money) or assets. All of these data values are stored in the distributed ledger system.
Second, by distributed, what is meant is that there is a decentralized network. This means that no central authority can
prevent any party from conducting business on the network.
Third, ledger systems are immutable in that once data is committed to the ledger, it cannot be changed.

Cryptographic Identities
The users of Blockchain transaction networks are cryptographic identities, a notion which is conceptually analogous to an
email address. For email, you have your address, and to access it you need a password. Similarly, with a cryptographic
identity, your public key is like your email address and your private key is like your password. The cryptographic identity
means that only you can make and sign transactions, which is how your account is kept secure on the public ledger and
cannot be accessed and controlled by other parties.
In Blockchain networks, the three main kinds of consensus algorithms for arriving at consensus in a distributed manner
are Proof of Work (POW), Proof of Stake (POS), and Practical Byzantine Fault Tolerance (PBFT).
In POW consensus, the algorithms that operate the distributed system reward miners (client machines on the system)
who solve mathematical problems.
In POS, the consensus algorithm is instead based on owning a stake in the network. In POS systems, the creator of a new
block is chosen in a deterministic way, depending on its stake, or degree of commitment (wealth) in the network.
PFBTis the ability of a distributed computing system to operate irrespective of faulty nodes (malicious or otherwise). PBFT
relies on there being a diversity of participants on the distributed system (a few hundred). For each block of transactions,
algorithms randomly select a small, one-time group of users in a safe and fair way. To protect them from attackers, the
identities of these users are usually hidden until the block is confirmed. The size of this group typically remains constant
as the network grows.

PUBLIC BLOCKCHAINS: ETHEREUM

Ethereum Decentralized Application Platform
Ethereum is a decentralized platform designed to run smart contracts.
Ethereum is a public Blockchain network for which anyone can download a wallet and use.
Ethereum has a native asset or cryptocurrency called ether.

Bitcoin and Ethereum Comparison

Bitcoin is a cryptocurrency.
Bitcoin is a transaction execution platform.
Bitcoin is designed to be simple and robust, with high security and high fault tolerance.
Bitcoin asset is the center of the Blockchain’s activity.
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Ethereum is a full-fledged platform.
Ethereum is a smart contract execution platform.
Ethereum is designed to be complex and feature rich.
Ethereum, ether is an asset but not the primary goal of the system, but more of an economic mechanism aligning
incentives for operating smart contracts.

UTXO (Bitcoin) vs Accounts (Ethereum)

Another difference between Bitcoin and Ethereum is that Ethereum is an account-based Blockchain, and Bitcoin is a

UTXO-based Blockchain (Unspent Transaction (tx) Outputs).

In Bitcoin, all inputs to a transaction must be in the UTXO database for it to be valid. UTXOs are the unspent amounts from
previous transactions that need to be confirmed as unspent to be used as inputs to the current transactions.
Instead of UTXOs, Ethereum uses an account-based model. In Bitcoin, a user’s available balance is the sum of unspent
transaction outputs controlled by their private keys. In Ethereum, a user’s available balance is recorded in the user’s
account.
There are two Ethereum account types: externally owned accounts (EOAs) and contracts. All accounts have an address
and an ether balance.
The first account type is EOAs. These accounts are generally owned by some form of external entity such as a person or
corporation, the kind that any new user would own when signing up to the Ethereum network.
The second account type is contract accounts, known as contracts. These accounts have an address, ether balance, and
any associated contract code.
The Ethereum Virtual Machine
The central element of the Ethereum platform is the Ethereum virtual machine (EVM), which serves as the execution
model for smart contracts. The EVM runs contract code in the sense that the contract code that is executed on every node
is EVM code. The contract code is not written in the high-level Turing-complete programming language, but rather in a
low level simple stack-based programming language that looks a lot like JVM’s bytecode (the java virtual machine).
The design goals of the EVM are fivefold: simplicity, space efficiency, determinism, specialization, and security.

Ethereum’s Gas: The Cost of Computation

Gas is a measure of the amount of computational effort required to execute a specific operation or contract on the
Ethereum network.
The goal of Ethereum is not to optimize the efficiency of computation. Ethereum is a massive parallel processing system.
It is specifically redundantly parallel because every node verifies each block, meaning that every node needs to run all of
this code. Running code on Ethereum is expensive because there is one global network and everyone is putting their smart
contracts onto this network, and has to share the same resources, because in the end there are always bottlenecks of the
computational resources of any one computer.

PRIVATE BLOCKCHAINS: CORDA, ETHEREUM QUORUM, HYPERLEDGER, RIPPLE

Enterprise Blockchain Systems in Financial Services
In the private enterprise Blockchains, the biggest activity so far is in financial services, where distributed ledgers are a next
generation in the ongoing progression of Fintech (making financial operations more effective with technology). The biggest
implementations in the financial services industry so far are with R3’s Corda, Symbiont’s smart ledger platform,
Ethereum’s Quorum, and Ripple.

Corda From R3
On the Corda platform, the ledger is distributed on a need-to-know basis, as opposed to a global broadcast method. This
means that only the parties involved in transactions have visibility into these transaction details. The Corda platform
enables businesses to reduce friction, costs and risks in their interactions with other parties, particularly in complex multi-
party transactions such as those found in finance, healthcare and supply chain management.

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Ethereum Quorum
Quorum is an enterprise-focused version of Ethereum. Quorum is a private Blockchain enterprise-ready distributed ledger
and smart contract platform. Quorum is good for any application requiring high speed and high throughput for the
processing of private transactions within a permissioned group of known participants (for example, a group of investment
banks). It was developed by J.P. Morgan. Quorum has several features: privacy, scalability, and modular.

Hyperledger Fabric
Hyperledger Fabric is a Blockchain framework implementation hosted by the Linux Foundation. Hyperledger Fabric is
designed for use in enterprise-level applications, and it is characterized by its modular architecture, permissioned network,
and smart contract functionality, known as “chaincode”. The platform provides a high degree of security, privacy, and
scalability, and it supports the development of custom blockchain solutions for various use cases across industries such as
finance, supply chain, and healthcare.

Ripple
Ripple is a technology company that provides a global payment network and a cryptocurrency called XRP. Ripple's
blockchain technology is designed to facilitate fast, secure, and low-cost transactions between financial institutions.
Ripple's private blockchain is a closed, permissioned blockchain that is designed for use by financial institutions and
payment providers. In Ripple's private blockchain, only approved parties are allowed to validate transactions and add
blocks to the chain. This creates a more centralized system, which allows for faster transaction times and lower costs
compared to public blockchains.

4.5 Ripple
The name Ripple refers to rippling, the idea that transactions ripple, or flow automatically across open nodes in the
network to their destination. A central premise of Ripple is that transactions can automatically ripple across the
network, crediting and debiting intermediary wallet nodes without requiring human intervention.
o Ripple is a real-time gross settlement system, currency exchange, and remittance network initially released in
2012. Ripple is a payment protocol that uses blockchain technology to process international money transfers. It
offers low transaction fees and extremely fast processing times, and it has partnered with hundreds of financial
institutions that use its technology.
o It handles both immediate cash payments and credit transactions over time.
o Its main goal is to eliminate the need for older systems like Western Union or Swift. Ripple is different from
other cryptocurrency projects such as Bitcoin, Ethereum, and Monero in that it targets financial institutions, and
might possibly be a successor to SWIFT.

How is it different from Bitcoin?

o Ripple is not a blockchain.
Technically, it means that transactions literally flow through the network in a dynamic crediting–debiting path
between available network computer nodes from sender to recipient. Conceptually,. Ripple is a credit network
in that ongoing trust relationships are maintained between parties on the network which have a specific
financial value attached to them.
o Ripples token (XRP) is not mined like Bitcoin, Ethereum and many other cryptocurrencies.
The token used for the cryptocurrency, which is the XRP, doesn't rely on mining to mint new units of XRP or to
validate transactions. Ripple is the name of the company and the network, and XRP is the cryptocurrency token.
It is consensus oriented.
The Ripple network does not run with a proof-of-work (PoW) system like bitcoin or a proof-of-stake (PoS)
system like Nxt. Instead, transactions rely on a consensus protocol in order to validate account balances and
transactions on the system. The consensus works to improve the integrity of the system by preventing double-
spending.
o Bitcoin can handle 3-6 tps while ripple is able to handle 1500 transactions per second.
Ripple transactions use less energy than bitcoin, are confirmed in seconds, and cost very little, whereas bitcoin
transactions use more energy, take longer to confirm, and include higher transaction costs.
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List of Banks and Financial institutions Using Ripple XRP Technology - 2023
1. Santander
2. American Express
3. Standard Chartered
4. Westpac
5. SBI Remit
6. Axis Bank
7. Yes Bank
8. National Australia Bank
9. NBAD (First Gulf Bank)
10. UBS
11. CIBC (Canadian Imperial Bank of Commerce)

5. BUSINESS ANALYTICS, ARTIFICIAL INTELLIGENCE, AND DEEP LEARNING CHAINS

5.1 Deep Learning Chains

The first argument for considering Blockchain and deep learning together suggests the emergence of a new class of
global network computing system. These systems are self-operating computation graphs that make probabilistic guesses
about reality states of the world.
The second reason to consider the convergence of Blockchain and deep learning is that each is necessary to facilitate the
development of the other.
The third reason to notice the convergence of Blockchain and deep learning is the smart network thesis. There are two
fundamental eras of network computing: simple networks for the transfer of information (all computing to date from
mainframe to mobile) and now smart networks for the transfer of value and intelligence.

5.2 Smart Networks: The Future of Deep Learning Blockchains

Smart networks are computing networks with intelligence built in such that identification and transfer is performed by
the network itself through protocols that automatically identify what things are (deep learning technology), and
validate, confirm, and route transactions (Blockchain technology) within the network. Overall, the reason Blockchain
deep learning systems running on smart networks could be important is that they might deliver an advanced
computational infrastructure with which to tackle the next tier of large-scale real-time predictive data science problems
such as genomic disease, protein modeling, energy storage, global financial risk assessment, real-time voting, and
astronomical data analysis.

6. USE CASES BY INDUSTRY

6.1 Blockchain Business Networks
The first industry-wide process change that is a precondition for Blockchain business networks is the digitization of
assets. The new mode of business practice may involve registering assets to Blockchains for administration, ownership
confirmation, transfer (buying and selling), audit tracking, and compliance. Digitized assets could mean the ability to
have a consolidated view of organization assets at various permissioned levels of detail.

6.2 Real-Time Asset Valuation

If assets are digitized and registered as Blockchain assets, they might be valued with greater ease, and even
automatically. The digital instantiation of assets means that smart contracts or other tools could constantly or
periodically value these assets in real time.

6.3 Payment Channels

Digitized assets mean that it is easy to have “an account relationship” with business partners instantaneously because
assets can be trustfully pledged on digital networks without having to know the other party. Payment channels is the

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idea of contractually obligating an asset tracking consumption of a resource against the escrow, and then settling on a
net basis in one transaction at the end of the period.

6.4 Business Networks and Shared Business Processes and Ledgers

Integrated supply chain ledgers is the idea of having open permissioned links in corporate accounting software packages
such that trade partners could post to each other’s ledgers. The implication of every business’s book being kept on a
distributed ledger is that they could be easily permissioned and pooled for single ledger views and net settling at the
supply chain level.

6.5 Use Case: Global Supply Chain and Automotive Industry

All parties in a value chain would access the business Blockchain, having known and credentialed users. There would be
private views and read–write access privileges assigned to certain parts of the Blockchain network. Automotive
applications are an important benchmark use case for Blockchain technologies other ways too, particularly for the
operation of commercial fleets, including in cold storage for food and vaccine delivery.

6.6 Use Case: Healthcare

The key benefit behind Blockchain health is that the Blockchain provides a structure for storing health data on the
Blockchain such that it can be analyzed but remains private, with an embedded economic layer to compensate for data
contribution and use. Individuals could grant doctors, pharmacies, insurance companies, and other parties access to
their health records as needed via their private key.

6.7 Use Case: Digital Identity and Credentials Applications

Storing documents (home deeds, auto titles, wills) on Blockchain networks has been possible for years with services such
as Storj.io and IPFS. A future application could be the norm to have a QR code at the top of a resume or CV which
automates the academic credentials, professional certifications, work history, and criminal records.

6.8 Use Case: Higher Education and the Scientific Research Process
The lengthy processes of preparing, submitting, and approving grants could be streamlined with digital identity
confirmation and smart contract orchestration by Blockchains. In academia there is considerable interest in using
Blockchain technologies in the context of higher education and research institutions. Blockchain technologies might be
used to improve and reinvest how universities conduct their operations, and themselves be the object of study, both in
scientific and humanities fields.

6.9 Use Case: CryptoKitties and Primalbase

One of the biggest successes in Blockchain applications so far is CryptoKitties, a digital collectibles game in which users
can buy, collect, “breed,” and sell unique digital cats using Blockchain technology’s ability to facilitate unique digital
content. Cats breed by creating offspring with unique DNA preserved on Ethereum’s Blockchain.
One creative use of an asset token is the Primalbase Token (PBT) used in the Primalbase technology coworking office
spaces in Amsterdam and Berlin. Purchasing one PBT allows the owner to control one seat in the coworking space. A
token owner reserves a seat with an online interface that checks their token ownership and books their coworking seat.

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