Krishnakumar 1

Meghana Krishnakumar

Abstract
Most aspects of daily life have become digitalized but there still remains one that has not.
Making transactions have always needed to go through a third party intermediary like a bank or
corporation before becoming complete, which not only takes more time but also tends to be more
expensive to the consumer. To solve this problem, Bitcoin creator, Satoshi Nakamoto launched
Blockchain. Nakamoto used the same foundation to create Blockchain technology, which
eliminates this third party intermediary making transactions, quicker, cheaper and faster. Because
Blockchain has been growing exponentially this past year, it brings up many concerns regarding
who it may impact. Since the government, banks and big corporations will be replaced by this
technology, individuals of the finance industry have a higher chance to loose their jobs and
would be forced to work elsewhere. Although there are many concerns with Blockchain like
whether it will live up to its hype or perform the tasks it claims it will accomplish, many
Blockchain experts, researchers, computer scientists and other credible individuals support its
creation and believe that there is a lot in store for the future of this technology.
 Krishnakumar 2

Blockchain: Changing The Way Transactions Are Made

Cha Ching! the cash register sounds as another purchase is being made. Transactions
are one of the most repeated tasks done by an individual everyday, but in a world full of
technology and innovation, why are they not digitalized yet? This would not only make the
procedure of processing a transaction faster, but also easier and in some cases safer as well. A
clever individual who goes by the pseudonym of Satoshi Nakamoto saw this problem and created
Blockchain. Blockchain is ultimately a form of Bitcoin technology that cuts out the middle
men when an individual makes a transaction. These middle men are banks, big corporations
and the government whom all play significant roles when a transaction is being made. Although
Blockchain might be seen as a revolutionary idea in the digital world, it comes with immense
changes in several industries. Since Blockchain is replacing the position of a bank or corporation,
the main industry that stands to be altered is finance. Additional research will help answer the
question of what economic impact Blockchain will have on these financial institutions.
What is Blockchain?
Before answering this question about what impacts Blockchain will create on certain
industries, it is important to understand what Blockchain is. Blockchain is known to be one of the
most misunderstood technologies, but as soon as the ah ha moment hits, the idea of it is not as
confusing. To get started, when someone tries to transact money or anything that holds real
value, they have to rely on mediators like the bank or the government to establish trust with their
money. The banks and governments role is to provide security and authentication for the
consumer and to make sure to keep track of all their transactions for record keeping. When
someone makes a digital transaction, it is even more important to have these mediators because
digital assets are easier to replicate and the chances of someone hacking into an account are
doubled (Thompson). In order to solve this problem, Blockchain became invented to make sure
that digital transactions can be made without these third party mediators. This is done through
the process of mining (jargon for coding) and storing of each transaction. The word mining
comes from the people who operate the Blockchain system. These miners are complex coders
with years of experience who work with other miners to develop the system. Their job is to
solve intricate equations that make each specific block unique to the consumer who made the
transaction. Whichever miner completes the coding equation first gets rewarded with Bitcoins1.
Having this automated reward system, incentivizes miners to work with one another to finish
these equations and to ultimately build the Blockchain quicker (Fanning). After this is
accomplished, Blockchain compiles a list of all the data from transactions made by one single
individual. This information is placed into a single block and each additional block that is created
later is added into a chronological chain hence the nameBlockchain.
How is Blockchain related to Bitcoin?
One system that is closely associated with Blockchain is Bitcoin. As mentioned before,
those who participate effectively on Blockchain earn Bitcoins but the relationship between the
two systems does not end there. Blockchain was actually built from the foundational code of
Bitcoin. Almost like how Chipotle was started from McDonalds, Blockchain was started from
Bitcoin. In comparison to the internet, Sally Davies, a FT Technology Reporter stated,

1
Bitcoins will be explained in the next paragraph.
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Blockchain is to Bitcoin, what the internet is to email (Thompson). Bitcoin is a system that has
its own currency and allows people to trade and make physical purchases with no dollar value.
Since this trading has no third party regulation it is associated with the black market; hence, the
negative connotation it carries. Because Bitcoin doesnt have any intervention, it can become
risky at times. For example, Penny Crosman from American banker cites that in August of 2016,
almost $72 million worth of bitcoin from accounts in Hong Kong were stolen by hackers.
(Crosman). With these safety and privacy issues from Bitcoin, Blockchain immediately
increased skepticism when the idea was first released into the public. What the public doesnt
know is that although Blockchain may have been built from Bitcoin, it serves a completely
different purpose. While Bitcoin was a system for individuals to trade with one another,
Blockchain has many more benefits as it is a way for people to have more secure transactions
without the mediation of any third parties (Antonopoulos).
Benefits of using Blockchain technology
Blockchain may only have one main purpose, but it has more benefits (for a bank,
government or corporation) than people may presume. A report done by Deloitte Inc. listed nine
benefits to Blockchain and why it should be implemented. Unlike a bank, Blockchain eliminates
risk because it is not mediated by a third party. Transactions made through a bank, can result in
misallocation of information whereas Blockchain systematically stores information ensuring
safety to the consumer. Another benefit to replace banks, governments and corporations with
Blockchain is that it creates empowered users. This means that any user of Blockchain is able to
have full control of their own information and each transaction they make. One of the main
reasons Blockchain is more trusted than a bank is that it is more reliable and lasts longer as well.
Blockchain is more reliable since it is built off of a central coding system that can never be
wrong due to its structured format. It lasts longer than a bank because it can take on any hacker
at a much more significant level than a bank could withstand. Blockchain has process integrity,
which basically means that the system will direct certain orders and the consumer can trust the
system to perform those exact orders every time it makes a transaction. No trust is lost through
this process since much of it is automated after the code has been written. One of Blockchains
well known benefits is its transparency since transactions cannot be deleted or changed and the
transactions can be viewable by all parties within that Blockchain. Since code is consistent and
structured, Blockchain is a less cluttered and more organized way of make transactions than a
bank. The last two benefits of Blockchain is that it is much quicker and less expensive than
having a bank make transactions. It can take several days to make a final settlement when
transactions are made through a bank or the government. With Blockchain, transactions take
only a few minutes and are constantly being processed. Whereas there are several external fees
that are associated with making a transaction through a bank, there are no exchange fees with
Blockchain. The last benefit to Blockchain is that it will allow more people and businesses to
trade more often both on a domestic and international scale (Deloitte).
Challenges of using Blockchain technology
Although there are many positive aspects of Blockchain technology, there are also many
questionable characteristics on how it works. After listing the nine benefits of Blockchain,
Deloitte then lists a few possible challenges that should be considered. Blockchain may be the
next big thing in the technology world, but it might just be way too good to be true. Because
Blockchain is a very recent development, it still needs improvement in the way it stores data. The
explanation of what Blockchain is just a concept of what people hope for it to be in the future.
Right now, Blockchain is still in its early stages of development after going public and several
 Krishnakumar 4

elements within the technology still needs to be fixed. One major problem that Blockchain faces
(Bitcoin too) is its regulatory status. Because it is not connected with the government, Bitcoin
and Blockchain have a continued problem of creating an actual modern form of digital currency
that is not regulated by the government. In other words, if someone creates a number that is not
in the numerical system, it would be hard to implement that into the already established
mathematic system. Seeing that Blockchain is a big piece of technology, it also takes up a lot of
energy. It generates almost 450 thousand trillion solutions per second, using a significant amount
of computer power (Deloitte). Although it is true that Blockchain is safer than using a bank or
the government to make transactions, privacy concerns still exist and should be fixed before the
general public starts to input their personal information into the technology. Although there are
no exchange fees within Blockchain, the initial costs to make the technology may be growing
and the net gain may not be as great as the creator had anticipated. The Sutardja Center for
Entrepreneurship and Technology at the University of California, Berkeley, studied the impact of
Blockchain and stated that the two biggest concerns with Blockchain is its cultural adoption and
integration into financial systems. There will be a complete culture shock for all users who start
to use Blockchain since they will be changing from transacting from centralized banks to
decentralized networks (Crosby).
How will Blockchain impact financial institutions?
One question that corporations and companies ask is how will they integrate into using
Blockchain systems and how long it will take to make this change? This concern has been one of
the biggest barriers for Blockchain, because many industries, especially the finance sector, will
be affected. What many people waste time focusing on is how Blockchain works, but that is
almost like asking yourself How does my iPhone work? Jesse McWaters starts in, Why
Blockchain is Central to the Future of Finance- and Why Thats More Exciting that It Sounds,
that instead of asking how Blockchain works, ask How will this technology change the way we
do business? (McWaters). Melanie Swan, author of Blockchain: Blueprint for a New Economy,
answers this question that McWaters poses in her book about how Blockchain can affect our
current economy. She states that although it may be the stepping stone to create a more
organized and structured economy, it will effect not only the banks or the government, but also
big corporations as well (Swan). Big corporations face the challenge of being replaced by this
technology so they need to keep up with Blockchain in order to stay relevant. Just like how
companies like Netflix changed from delivering movies to a physical address to streaming
online, financial corporations need to start implementing Blockchain so that they are able to keep
up with the current technology. If they fail to do this, these financial institutions will have no
purpose and ultimately disappear. An article published by Bloomberg quoted the world renown
consulting company, McKinsey & Company, firing people wont be enough to save the worlds
biggest banks from technological and regulatory changes that have reshaped the industrywhole
businesses must go Almost every bank will have to quash aspirations to be all things to all
customers only three to five global full-service banks will survive (Miller). Although these
financial corporations may undergo some trouble as a whole, individuals amongst these
institutions will be affected even more.
How will individuals adjust to this change?
Just like how robotics took over the manufacturing industry in the late 1990s and early
2000s, Blockchain is taking over finance related jobs in the 2010s. A study done by Ernst &
Young explains the impact Blockchain will have on these jobs and how they will be able to
search for related occupations for the future. This study examined 22 different CFOs (Chief
 Krishnakumar 5

Financial Officers) from exceptional companies like Pandora, Adidas, and more. This study
explained how if CFOs dont compete with Blockchain technology, the management will fall
apart and they will have a high chance of losing their jobs. As the Ernst and Young study noted,
Blockchain technology is likely to play an important role in the finance function in coming
years. CFOs should be anticipating how they are going to build the relevant competencies and
skill sets. They also need to start discussing the future of their system of record, given that
organizations could move from working with a single, monolithic system of record inside the
enterprise to working with many different systems (Ernst & Young). Following this claim, EY
asked current CFOs about their concern with Blockchain and their response was surprising. They
might have just been optimistic but many of the CFOs stated that technology is changing
constantly one way or another and that adjustments will always need to be taken to stay in par
with the growth of such systems like Blockchain. One key concern the study did point out was
the effect Blockchain will have on the recruiting process. Because technologies like Blockchain
are smart and fast, when these companies plan to hire new employees, they will be hiring more
intellectual and quick individuals than before.
As a result, Blockchain does not necessarily affect CFOs as much as it affects those who
will be entering the finance industry. EY reports the there has been a talent shortage that has hit
the hiring world and that with, A growth in smart machines means that companies need to hire
as smart or smarter people to fill up new roles (EY). In economic terminology, when any sector
of business is impacted by technology, it is a known fact that both the supply and demand of that
industry will be affected. This is because when technology makes faster and more productive
solutions, the supply for that industry would go down since employees will be replaced by that
piece of technology. When the supply decreases, the amount of people hired becomes more
limited and unemployment within that industry will increase. This exact case of unemployment
increasing, due to an increase in technology, can be seen during the early 2000s when machines
took over most manufacturing jobs (Eaton-Cardone). Since robots/machines made it much easier
for companies to package and create their products rather than having man labor, the individuals
who worked in the manufacturing industry had to find other sources of labor. While the
manufacturing industry was hit hard when machines started to take over their jobs, other
industries began to flourish since these workers would transfer into them. Eventually, these
manufacturer workers were able to find employment in other nearby industries and, as a result,
have a source of income. This exact event that occurred in the early 2000s is happening right
now with Blockchain.
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 Krishnakumar 7

Should Blockchain still be implemented?

Even though Blockchain is having all these potentially negative economic impacts on
financial corporations all over the world, should it still be implemented? Colin Thompson from
The Intrepid Review stated, Although these industries will be affected through the
implementation of Blockchain technology, the elimination of such mediators will still result in a
positive outcome (Thompson). Regardless of whether Blockchain may replace certain
individuals in big corporations, a majority of people have come to the conclusion that it would
benefit the overall population. Even if Blockchain is taking over several jobs at the moment
within the financial sector, it will provide those individuals whom are affected with other
opportunities in different industries. Many engineering and research experts from the MIT Media
Lab believe that technology is bound to continuously change occupations and warns the reader to
not be concerned by its technology because it would have been eventually created anyways.
These researchers and engineers wrote a report in The Harvard Business Journal, stating how the
internet started just like how Blockchain started. At first, people were too scared to approach the
concept but as it built momentum, it became the next big thing. Just like this, Blockchain was too
confusing for people to first understand, but within the time span of less than a year, it has gained
immense attention (Ali). It has exponentially grown to the point that the Google search for
Blockchain had risen 1900% since 2013 (Deloitte). The individuals from the MIT Media Lab
state that Blockchain will take over financial systems just like how the internet took over the
media. With no hesitation, they claim that Blockchain is not a problem as but instead a solution
that needed to be created for the past decade.
Interesting enough, the MIT Media Lab researchers are not the only people that believe
that Blockchains impact on financial corporations will soon disappear. Some people like Brock
Pierce, Blockchain expert and entrepreneur, states that Blockchains assistance to day to day
people out way the effects it would have in the finance industry, Every human being on the
planet with a phone, will have equal access. Expanding the total addressable market by 4X
(Thompson). Deborah Gibbins, CFO of Mary Kay, stated in her interview with EY that her
company was already planning on slowly shifting to an automated process to make transactions
and Blockchain made the change that much easier. From the same technical report done by EY,
Frank H. Lutz, CFO at Covestro AG, claimed that, wherever we can be supported by technology,
we should try to do that. I think financial engineering will become more and more important,
which means we are looking for ways to take out risk (EY). Seeing that there are optimistic
views from those in the financial industry, itself, Blockchain seems receive approval from
individuals across all horizons.

What other industries will be impacted if Blockchain is implemented?

This impact, however, goes beyond just financial institutions. It reaches into industries
like healthcare, defense, and energy. Even though it may seem that financial institutions do not
have anything to do with healthcare, defense, or energy, these industries get impacted in the
same way (Tapscott). In healthcare, communities of people that include the doctor, the patient,
the hospital and the health insurance, can be part of one Blockchain, which eliminates any
possible chance of any fraud for all the healthcare payments. The same impact is made in
defense but, obviously, at a much higher scale. Blockchain would be able to guarantee security
against any attack on defense systems like national security (Iyer). So although Blockchain may
 Krishnakumar 8

have taken a toll on several financial corporation jobs, it solved the problem of security and
safety in other industries.
Blockchain is making its way around the world
To go even further into what Blockchain can be within the next year goes past not only
financial institutions but also the United States. Countries all over the world have picked up on
the idea of Blockchain and have already started to implement it into their corporations. In
November, the Monetary Authority of Singapore (MAS) announced that it would test and issue
digital currency using Blockchain technology. Seeing that it took a few years for the internet to
spread throughout the United States and even longer to reach other countries, it is evident that
Blockchain is making an immense impact both domestically and internationally in such a short
amount of time (Ho).
Being one of the most confusing pieces of technology to understand, Blockchain sure has
made its way around the globe in such a short amount of time. An idea that started in a nine-page
journal, Blockchain has made its name into places the internet hasnt yet reached. An easy way
to understand Blockchain as Don Tapscott mentioned in "The Impact of the Blockchain Goes
Beyond Financial Services", is that the internet was the first digital platform for information
whereas Blockchain is the first digital platform for value. Although Blockchain raised doubt due
to its close relationship to Bitcoin, its solution to make transactions much easier without the
intermediary of a bank, government or corporation, sets the record straight for making life faster
and simpler to its users. With all its benefits, Blockchain still comes with some challenges like
whether it will live up to its name or whether the amount of change it will require is possible.
One of the biggest changes Blockchain makes is on the finance industry and the amount of jobs
it will effect. Because it will be performing the same tasks as these third party mediators,
Blockchain threatens many individuals in this industry, which leads many people to question
whether implementing Blockchain is worth it. As a result, not only have CFOs from various
companies agreed to the adjust to the change but so have experts from neighboring industries. It
is interesting to see how Blockchain will be able to grow from here. Since Blockchain was built
from the foundational code that created Bitcoin, it is also exciting to see what kind of new
technology can be built from Blockchain. Although a very confusing topic, Blockchain is worth
learning about especially since it has the potential to impact almost anyone in the technology
field for the future in a positive way.
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Works Cited

Ali, Joichi ItoNeha NarulaRobleh. "The Blockchain Will Do to the Financial System What the

Internet Did to Media." Harvard Business Review. N.p., 09 Mar. 2017. Web. 29 Apr.

2017.

Antonopoulos, Andreas M. Mastering Bitcoin: Unlocking Digital Cryptocurrencies. Sebastopol,

CA: O'Reilly, 2015. Print.

"Blockchain Technology: 9 Benefits & 7 Challenges | Deloitte." Deloitte Nederland. Deloitte, 05

Apr. 2017. Web. 26 Apr. 2017.

Blockstream. "Confidential Transactions The Elements Project." Confidential Transactions

The Elements Project. N.p., n.d. Web. 09 Apr. 2017.

<https://elementsproject.org/elements/confidential-transactions/>.

Crosby, Michael, Nachiappan, Pradhan Pattanayak, Sanjeev Verma, and Vignesh Kalyanaraman.

"Blockchain Technology." (2016): n. pag. SCET. The Sutardja Center for

Entrepreneurship and Technology. Web.

Crosman, Penny. "Does Blockchain Tech Solve Security Problems or Cause New

Ones?" American Banker. N.p., 18 Aug. 2016. Web. 10 Apr. 2017.

Eaton-Cardone, Monica. "How Blockchain Will Affect Financial Services

Employment."EFinancialCareers. N.p., 06 Jan. 2017. Web. 30 Apr. 2017.

 Krishnakumar 10

Fanning, Kurt, and David P. Centers. "Blockchain and Its Coming Impact on Financial

Services." Journal of Corporate Accounting & Finance. N.p., 13 June 2016. Web. 09

Apr. 2017. <http://doi.wiley.com/10.1002/jcaf.22179>.

Ho, Fiona. "What Blockchain Actually Means For The Future Of Banking." Asia Finance. N.p.,

28 Dec. 2016. Web.

"Is the Future Unreasonable?" The DNA of the CFO: Is the Future of Finance New Technology

or New People? Preparing for the Future Finance Function 45.4 (1985): 179-83. Ernst

& Young. Web.

Iyer, Subramanian. "The Benefits of Blockchain Across Industries." Oracle. N.p., Apr. 2016.

Web. 30 Apr. 2017.

McWaters, Jesse. "Why Blockchain Is Central to the Future of Finance - and Why That's More

Exciting than It Sounds." World Economic Forum. N.p., n.d. Web. 28 Apr. 2017.

Miller, Geoffrey, and David Yermack. "Digital Currency, Blockchains, and the Future of the

Financial Services Industry." Lecture.

Swan, Melanie. Blockchain: Blueprint for a New Economy. Sebastopol, CA: O'Reilly, 2015.

Print.

Tapscott, Don, Tapscott, Alex. "The Impact of the Blockchain Goes Beyond Financial

Services." Harvard Business Review. N.p., 17 Feb. 2017. Web. 09 Apr. 2017.

<https://hbr.org/2016/05/the-impact-of-the-blockchain-goes-beyond-financial-services>.
 Krishnakumar 11

Thompson, Collin. "How Does the Blockchain Work (for Dummies) Explained

Simply."Medium. The Intrepid Review, 02 Oct. 2016. Web. 26 Apr. 2017.

 Krishnakumar 12

Annotated Bibliography

Ali, Joichi ItoNeha NarulaRobleh. "The Blockchain Will Do to the Financial System What the

Internet Did to Media." Harvard Business Review. N.p., 09 Mar. 2017. Web. 29 Apr.

2017.

This article explained how Blockchain is following the steps of the internet and how it
was seen as a fantasy at first, but ended up being revolutionary. The article explains how the
internet was first created for universities and research but later commercialized to make profits
for companies. Similarly, to the creation of the internet, Blockchain was not created to make
corporations profits but to simply have a faster and more effective system to make digital
transactions. As the title highlights, Blockchain will take over financial systems as the internet
took over media. But in this case, the internet created new forms of media, likewise, Blockchain
will create new forms of digital currency exchange in the future. The article questions if
Blockchain is too much too soon and whether it is needed. Because we already have an
organized system for physical transactions, the authors of this article question if the
implementation of Blockchain will only take unnecessary and confusing adjustments for
financial institutions.
Joichi Ito is a Director at the MIT Media Lab and Professor of the Practice in Media Arts
and Sciences at MIT as well. He has worked at credible publications like the New York Times
and Sony and has plenty experience in the technology field to know about Blockchain. Neha
Narula is also a director at the MIT Media Lab where she teaches courses about cryptocurrency
and Blockchain research. She has worked at Google as a software engineer and also at several
research conferences related to Blockchain technology. Robleh Ali is a research scientist at the
MIT Media Lab and focuses his research on how national currencies can be used digitally
outside the banking system. This article is a primary source since these three authors wrote from
their own research findings. The Harvard Business Review normally writes from a nonpartisan
perspective so this article provides a trustworthy and unbiased review on Blockchain.

Antonopoulos, Andreas M. Mastering Bitcoin: Unlocking Digital Cryptocurrencies. Sebastopol,

CA: O'Reilly, 2015. Print.

This book summarizes more details about Bitcoin than Blockchain and highlights a few
points on how Blockchain is safer. It summarizes how a coder can find a way to solve a block
before someone else and how to do it quickly, therefore resulting in more bitcoin purchasing
power than those who participate less. The book explains certain technical terms in detail like
cryptocurrency, ledger, and other technical concepts related to Blockchain. This book provides a
good balance between how to understand what a bitcoin is in the beginning and later
summarizing a way on how block chain can be used strategically to later gain more bitcoins.
 Krishnakumar 13

Andreas Antonopoulos is a technology expert, entrepreneur and coder who is well known
for writing books about the importance of bitcoin. He is known to make confusing topics like
Bitcoin easy to understand. This book, being a primary source, not only provides information
about bitcoin but shows ways on how to start a company that uses bitcoin technology. Andreas is
a bitcoin entrepreneur himself and guides other entrepreneurs into starting their own bitcoin
companies.

"Blockchain Technology: 9 Benefits & 7 Challenges | Deloitte." Deloitte Nederland. Deloitte, 05

Apr. 2017. Web. 26 Apr. 2017.

This article summarized the main pros and cons to Blockchain technology. It was
structured in a way to help the reader understand clearly what is good about Blockchain and what
isnt. A few key benefits that were pointed out was the transparency of Blockchain and how
trusted it can be since there are no intermediaries. Another plus to this technology is that it is
much faster and cheaper than making a transaction through a bank or the government since it
takes out the time of making final settlements through a mediator. The article further states that
Blockchain technology benefits the user since it puts the user in full control of their information
and any transaction that is made by them.
This article was not written by anyone in specific but published by the company Deloitte.
Deloitte LLP provides consulting, advisory and other services to many world renown brands.
Consulting for over 80% of the Fortune 500 companies and up to 6,000 private companies,
Deloitte continues to provide astonishing solutions and techniques to its clients on a daily basis.
Deloitte offers services to a range of industries including energy and conservation,
manufacturing, technology and more. This source might be a tertiary source but could very likely
be a secondary source as well since it quotes primary source material (direct quotes). I plan on
including this article when I write the counterargument against Blockchain.

Blockstream. "Confidential Transactions The Elements Project." Confidential Transactions

The Elements Project. N.p., n.d. Web. 09 Apr. 2017.

<https://elementsproject.org/elements/confidential-transactions/>.

Although a dense reading, this article centered its main points on how to become a
successful Blockchain coder by using a new extension that this company created. This blog entry
provided examples of actual code to show how explore various features within Blockchain. It
explains that there are limitations that coders need to be aware of like inputting a higher
transaction price than the allowed maximum, for example. Overall, a short, detailed post about
confidential transactions.
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The author name was not provided but The Elements Project is an extension of Bitcoin
and Blockchain technology that was created by a group of computer scientists. The article did
not produce any bias or opinion since it was mostly facts about Blockchain and didnt express
concerns or appreciation for it. Seems credible and I would assume it is a primary source since
this company is the one who came up with this Blockchain extension. I might include this source
when I explain the future of Blockchain and what other aspects/extensions are being created to
better its technology.
Crosby, Michael, Nachiappan, Pradhan Pattanayak, Sanjeev Verma, and Vignesh
Kalyanaraman.

"Blockchain Technology." (2016): n. pag. SCET. The Sutardja Center for

Entrepreneurship and Technology. Web.

This journal, written by several credible technology executives, explained the effects
Blockchain will have on financial corporations. Starting with the definition of Blockchain and
ending with the risk factors of adoption, this technical report was able to produce a detailed
explanation for what Blockchain will ultimately be and how it will change the way corporations
control transactions. This journal was able to distinguish the difference between Bitcoin and
Blockchain and how Blockchain has now become the backbone of Bitcoin (which will be
explained more in my research paper). As the journal approached the conclusion, it pointed out
that this cryptocurrency based technology can start to spiral out of control as a result of too
many high expectations.
The Sutardja Center for Entrepreneurship and Technology is a research center at the
University of California, Berkeley that studies technologic centric trends and technologies in
order to help develop a better understanding of its growing industry. Michael Crosby from
Google, Nachiappan and Pradhan Pattanayak from Yahoo, Sanjeev Verma from Samsung
Research America and Vignesh Kalyanaraman from Fairchild Semiconductor are all well known
executives and technology experts that have worked on projects related to R&D for ages. This
report would be a secondary source since it uses several statistics from already published
journals. Some of the statistics calculated in this report have been done through a few of these
authors but most that are mentioned are based off of other scholarly journals. I plan to use this
article when I mention the effects Blockchain will have on financial institutions and also when I
give background information about the subject itself.
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Crosman, Penny. "Does Blockchain Tech Solve Security Problems or Cause New

Ones?" American Banker. N.p., 18 Aug. 2016. Web. 10 Apr. 2017.

This article, unlike others, criticized the creation of Blockchain and why it may not be the
best technology to invest time into. While many people believe that Blockchain is a secure
network and has a low probability of anyone hacking the system, the author still expresses
concern based off of previous hacks that have happened with a similar kind of technology. This
article brings several pieces of evidence from executives like Richard Johnson, VP of Greenwich
Associates, and researchers like Cameron Camp who helped develop the argument against
Blockchain along with Crosman. Although this article starts off my explaining the possible
strengths with Blockchain, it immediately follows up with a line of arguments as to how it can be
dangerous for any of its users. This counterargument is a good way to understand that not all of
Blockchain is reliable and that there are still some things that need to be fixed.
Penny Crosman has been the Editor in Chief of Bank Technology News and has held
positions as a writer of multiple technology publications. Crosman has been the Editor at Large
and has produced stories related to technology, cybersecurity, financial health, privacy and other
related topics in the industry for more than ten years. With her vast knowledge on growing
technology, she is able to provide a credible article explaining the reasoning she has for going
against Blockchain. When I frame my counterargument, I will be using Crosmans points on how
there can be a slight chance for a hack into the system and expound upon that contention.

Eaton-Cardone, Monica. "How Blockchain Will Affect Financial Services

Employment." EFinancialCareers. N.p., 06 Jan. 2017. Web. 30 Apr. 2017.

This article summarized the affects that Blockchain will have on the employment of those in
financial services. It states that although there are many great benefits with Blockchain, there
might actually be more cons than pros. Companies will lose their value proposition and
immediately after, the amount of jobs in this industry will fall too. The introduction of
Blockchain to the finance industry is similar to the effect of robotics in manufacturing: change in
the way we do things, leading to fewer jobs, is inevitable. One potential use for Blockchain
technology would be in home sales and mortgage lending so real estate agents and lenders will
eventually loose their jobs. The article shifts its attention to how Blockchain can be used in the
future. The article states that those whom are scared to be tossed out in the streets because of
Blockchain need not worry because it will take enough time for Blockchain to be a widespread
application, which will give enough time for these employees to find related jobs in the
meantime.
Monica Eaton-Cardone is the COO and Co-Founder of Chargebacks911 and CIO of
Global Risk Technologies. She has published 30 scholarly articles related to credit card
processes, fraud, hacking, technology and much more. Given her background, Cardone gives a
realistic and reasonable perspective on how Blockchain will play a role on employment for those
whom are currently in financial intuitions.
 Krishnakumar 16

Fanning, Kurt, and David P. Centers. "Blockchain and Its Coming Impact on Financial

Services." Journal of Corporate Accounting & Finance. N.p., 13 June 2016. Web. 09

Apr. 2017. <http://doi.wiley.com/10.1002/jcaf.22179>.

This article summarizes what block chain technology is and the basics behind how it
works. It defines block chain as a network that collects lists of data that records all transactions
that a miner makes. The block chain name was created because once each transaction is
collected and stored, it creates a block and as more transactions are made, the blocks form a
linear and continuous chain that results the nameblock chain. A miner is defined to be an
individual that works on the network of all the nodes of information. Their job is to solve
complex equations that are made for each specific block in the network. As each block is created,
the miner gets rewarded with bitcoins which is basically fake money that is virtually traded
amongst individuals. The article went in further depth of what cryptocurrency is and its effect on
financial services and how it is converting several financial services like Goldman Sachs to
invest time in a better back end system similar to that of Blockchain. It is growing and becoming
an attractive new technology that is replacing physical transactions. Financial executives should
make sure that they are staying competitive against this new technology that may be replacing
them.
Kurt Fanning is an Accounting Professor at Grand Valley State University and has been
conducting research related to finance and technology for several years. He has conducted 11
research studies related to big data, business management, virtualization and much more. David
Centers is also a professor at Grand Valley State University and has published 4 research studies
related to Software as a service (SaaS), finance, and Blockchain. Since their field of teaching is
related to this scholarly journal, it provides a credible foundation for the reader and ensures that
there was no bias involved. I will be including this journal in many portions of my essay since it
directly relates to my research question.

Ho, Fiona. "What Blockchain Actually Means For The Future Of Banking." Asia Finance. N.p.,

28 Dec. 2016. Web.

This concise article emphasizes that Blockchain is spreading outside the United States
and into banks all over the world. In November, the Monetary Authority of Singapore (MAS)
announced that it would test and issue digital currency using Blockchain technology. Showing
this international change within the past six months, Blockchain is revolutionizing the way we
make transactions internationally. The article also goes in depth about what Blockchain is and
why it should be implemented in all other countries.
Fiona Ho is a writer for Asia Finance and focuses on subjects like investment banking,
Big Data, international trade and entrepreneurship. Many of her articles include quotes/evidence
from already established studies and reports from companies like IBM and Misys. Since Ho uses
analysis from other reports, her articles are secondary sources. Asia Finance focuses many of
their articles on innovation and development so there might be a little bit of bias when the article
favors the implementation of Blockchain and does not criticize its impact on other industries.
 Krishnakumar 17

"Is the Future Unreasonable?" The DNA of the CFO: Is the Future of Finance New Technology

or New People? Preparing for the Future Finance Function 45.4 (1985): 179-83. Ernst

& Young. Web.

Apart from describing the technical logic behind Blockchain, this report studied 22
different CFOs through a series of interviews to examine how growing technologies like this are
effecting their role as a financial officer. Because technologies like Blockchain are smarter and
more efficient, getting hired for any financial position has significantly become harder. This
article mentions that due to an increase in technology (AI, machine learning, Blockchain, etc.),
recruiting teams have experienced a shortage in talent amongst current and future applicants.
Since machines are getting smarter and faster, recruiters are looking for individuals whom are
just as fast and smart, making it harder and harder for these individuals to receive a financial job.
This study was conducted by Ernst Young, one of the big four accounting firms in the
world. A very credible company, consistently posting different studies, focuses on the financial
and accounting industries. This study specifically was conducted by interviewing various CFOs
from other credible financial institutions, and provided its own statistics and evidence; hence, a
primary source. I will be incorporating this study several times in my essay when I explain how
Blockchain will impact several financial institutions. This article is different because I will be
writing about how Blockchain is effecting the job market and not just the next moves these
corporations are taking in their companies to adjust to the change.

Iyer, Subramanian. "The Benefits of Blockchain Across Industries." Oracle. N.p., Apr. 2016.

Web. 30 Apr. 2017.

This post summarized what Blockchain is and although it is changing the financial
industry the most, it is also making an impact on the healthcare, defense, and energy industries as
well. In the healthcare sector, communities of people that would include the hospital, doctor,
patient, and insurance company could be part of one single Blockchain, which would reduce
fraud when an individual makes a healthcare payment. The same sort of security would also
apply for the defense industry. Blockchain can guarantee security against any attack on defense
systems like national security. The article concludes stating that with a wide range of
opportunities available with the implementation of Blockchain, it has a high probability in
making services more confidential and, seems poised to be one of the digital worlds key
pillars.
Subramanian Iyer is an Oracle Insight and Customer Strategy Leader who has had more
than 20 years of experience in cloud computing services and global information technology (IT).
Oracle is a credible corporation that offers business hardware and software systems to its
customers that include all 100 if the Fortune 100 companies. Seeing that Iyer has had experience
in this sector of technology, he provides knowledge and objective information to the reader in
this article.
 Krishnakumar 18

McWaters, Jesse. "Why Blockchain Is Central to the Future of Finance - and Why That's More

Exciting than It Sounds." World Economic Forum. N.p., n.d. Web. 28 Apr. 2017.

This article summarizes what Blockchain could be in the future with the help of other
already existent technology. Unlike many articles regarding Blockchain, this one emphasizes the
importance of understanding the future of Blockchain instead of worrying about how it is built
and how it functions. The article compares the concept of trying to understand Blockchain as a
normal individual to asking how an iPhone works. Using evidence from the Disruptive
Innovation in Financial Services reported by the World Economic Forum, this article states that
there is a potential impact on nearby industries with the use of Blockchain but in order to live up
to its hype it will take time and collaboration.
Jesse McWaters is a Project Lead at the World Economic Forum and focuses his area of
research on innovation and financial services. The World Economic Forum is well known for
conducting several trusted and unbiased reports all based off of extensive research and primary
sources of evidence. This article used information from the World Economic Forums previous
reports so it would be a secondary source. This article will definitely come in handy when I write
about the future of Blockchain and when I answer my research question in regards to its effect on
financial institutions.

Miller, Geoffrey, and David Yermack. "Digital Currency, Blockchains, and the Future of the

Financial Services Industry." Lecture

This source is not necessarily a specific lecture but an introduction to a specific course
outline. Starting with a quote from McKinsey, this course is based on how big of an impact
Blockchain will have on not only banks but also stock trading. An increase in technology hits the
financial industry the hardest because these new technologies are just replacing the jobs of some
financial workers. McKinsey later states that instead of firing a few workers, these new additions
of technology are going to be removing a number of big banks from the market until only four or
five still remain. This course helps teach students the effect such technologies like Blockchain
will have on future financial services, and tries to hone in on how the job market will be effected.
This course is taught by Geoffrey Miller and David Yermack, both exceptional professors
in the NYU Law School and NYU Stern School of Business. Professor Miller is an author and
editor of several books and over 200 research papers on the topics in business law, risk
management, financial institutions and much more. Professor Yermack has a PhD from Harvard
University and has published 6 scholarly journals in regards to shareholding, stock exchange and
investment banking. This course will help me evaluate how Blockchain is making its way past
the code and into the textbooks.
 Krishnakumar 19

Swan, Melanie. Blockchain: Blueprint for a New Economy. Sebastopol, CA: O'Reilly, 2015.

Print.

This introductory book is about how Blockchain can effect our current economy and how
it could be as big as the Internet or social media. It examines how Blockchain can be used in
tracking digital transactions and by having a decentralized cache or bank to authenticate identity
of each coder of the chain, Blockchain stands to be much safer. It goes into further detail by
explaining how Blockchain can more easily. By holding all the previous transactional
information in one group (ledger), Blockchain systems are able to consolidate numerous amounts
of transactions into one bite of information.
Melanie Swan is an economic theorist and philospher who received her MBA in finance
for the Wharton School of Business. She is the founder of her own startup, Institute for
Blockchain Studies and DIYgenomics. She focuses her academic research on finance,
entrepreneurship and technology which makes this source more credible and trustworthy (less
opinionated). Its interesting to see that she combined her two areas of study (Economics and
Blockchain) and wrote about the combination of the two. I will be using this source throughout
my research paper because it pertains directly to my research question.

Tapscott, Don, Tapscott, Alex. "The Impact of the Blockchain Goes Beyond Financial

Services." Harvard Business Review. N.p., 17 Feb. 2017. Web. 09 Apr. 2017.

<https://hbr.org/2016/05/the-impact-of-the-blockchain-goes-beyond-financial-services>.

This article explains how the mass collaboration of Blockchain and complex code helps
create a trust between people who do not know each other and are trying to get to the next level
of coding within the system. The article compares Blockchain to the internet in that the internet
was the first digital platform of information whereas Blockchain is the first digital platform for
value. This source explains how Blockchain doesnt just effect financial corporations but also
several other industries as well. Any form of new technology can make a drastic impact on
nearby or related industries in the long run from healthcare to education.
This article was published by The Harvard Business Review and written by brothers Don
Tapscott and Alex Trapscott. Both authors have consistently been write for the HBR for more
than ten years and have focused on writing about technology, operations/leadership, and
innovation and entrepreneurship. Coming from a credible publication that doesnt lean one way
or another, these brothers have been providing information about up and coming technology and
how they operate in an unbiased fashion. By supporting their evidence with statistics calculated
in other research studies, this article results as a secondary source. I plan to elaborate on this
article in my paper when I talk about impacts of Blockchain.
 Krishnakumar 20

Thompson, Collin. "How Does the Blockchain Work (for Dummies) Explained

Simply."Medium. The Intrepid Review, 02 Oct. 2016. Web. 26 Apr. 2017.

The purpose of this article was to explain the concept of Blockchain technology in a
dumbed down way. By explaining this technical subject to its reader, the author establishes a
way of conveying such a hard subject in way that is readable to anyone. The article first starts off
by stating that Blockchain is not an easy topic to learn about and may only make sense after that
ah ha moment. The article starts out by explaining the history of transacting money and how
Blockchain was initially started. Later, the article explains this technologys connection with
bitcoin and what sets them two apart. The article finishes off by summarizing the effects
Blockchain will have on the global and domestic economy and what impact it will have on the
industries that rely on intermediaries like a bank or the government.
Colin Thompson is a notable Blockchain technology expert and entrepreneur who
received a BA from York University and a MBA from the Harvard Business School. Thompson
is the co-founder and Managing Director of Intrepid ventures and spreads his knowledge about
venture capitalism, FinTech and much more through writing easy-to-understand articles for his
users. Seeing as this article was published as a secondary source, it still provides valid
information about what Blockchain is. I decided to incorporate this article into my research paper
because it explains certain technical terms in detail for someone who does not have any coding
or Computer Science background. I will definitely be using this article when explaining the
impact Blockchain has on our economy.
 Krishnakumar 21

(Notes from Significant Articles/Journals/Books [7/ 116articles])

"Blockchain Technology: 9 Benefits & 7 Challenges | Deloitte." Deloitte Nederland. Deloitte, 05

Apr. 2017. Web. 26 Apr. 2017.

Notes
- Since 2013 Google searches for Blockchain have risen 1900%
- 9 benefits of Blockchain technology
o trustless exchange
eliminates counterparty risk without the presence of any intermediation
o empowered users
users have full controls over their information
o reliability and longevity
able to take on any hackers
o process integrity
no need for a third party since users will be told exactly how their
transaction will be made
o transparency
transactions cannot be deleted or changed, and public Blockchains are
viewable by all parties
o less clutter
by having all transactions added into one system, it eliminates any clutter
of having more than one ledger.
o Faster
It can take several days to make a final settlement when transactions are
made through a bank or the government. With Blockchain, transactions
take only a few minutes and are constantly being processed
o Low transaction costs
No exchanging fees
- 7 challenges of Blockchain
o recent development
Since Blockchain is farely new, it still needs to improve its processes and
data storage
o Regulatory status
Bitcoin and Blockchain have a continued problem of creating an actual
modern form of digital currency that is not regulated by the government
o Takes up a lot of energy
Uses a significant amount of computer power (450 thousand trillion
solutions per second)
o Security, privacy
Privacy concerns still exist and should be fixed before the general public
starts to input their personal information into the technology
o Integration
How will companies try to integrate into the Blockchain systems?
They would need to make that change quickly
 Krishnakumar 22

o Cultural adoption
A complete cultural change for users to start using a decentralized network
o Cost
Initial capital costs could prevent Blockchain from growing

Crosby, Michael, Nachiappan, Pradhan Pattanayak, Sanjeev Verma, and Vignesh Kalyanaraman.

"Blockchain Technology." (2016): n. pag. SCET. The Sutardja Center for

Entrepreneurship and Technology. Web.

Notes:
- Coming from a more technical article, the authors were able to write about what the
basics of Blockchain are and how it is changing the digital economy. The article opens
with a short history of bitcoin and is later followed by how Blockchain works.
- The article later delves into the financial applications of Blockchain: private securities
and insurance. And immediately after, the non- financial applications: public platform,
and decentralized proof/IoT
- The following section underscores the problem of adoption and how it would be hard to
transition from using our current transaction system into the Blockchain system
- The last section summarizes the interest in Blockchain from corporations and how they
will be able to fund enough money to implement this digital currency.

Crosman, Penny. "Does Blockchain Tech Solve Security Problems or Cause New

Ones?" American Banker. N.p., 18 Aug. 2016. Web. 10 Apr. 2017.

Notes:
- In August hackers stole $72 million worth of bitcoin from accounts at the Hong Kong
cryptocurrency exchange Bitfinex.
- A month later, $55 million more was stolen from the Ethereum network (a subdivision of
Bitcoin), which is getting more attention as Blockchain grows
- Strengths of Blockchain:
o Solves security problems
o Creates an immutable record because of the cryptographic signature
o "Nobody's been able to hack into the bitcoin blockchain and steal bitcoins," said
Richard Johnson, vice president of Greenwich Associates. "In that sense, the
blockchain itself is very secure. It has very strong cryptography securing it."
- Fraud becomes a process because once one person gets a hold of someone elses
transactions, they can continue to make transactions endlessly
- This article states that anything in the end can be hacked in this system
- You're putting a lot of trust in these exchanges' having the right security protocols," he
said.
- Bankers Concerns:
 Krishnakumar 23

o Worried about transaction confidentiality

o Johnson mentions that this study was done before on the Ethereum and Bitfinex
hacks and that since it is a very fast moving environment, securing private
information quickly may not work

"Is the Future Unreasonable?" The DNA of the CFO: Is the Future of Finance New Technology

or New People? Preparing for the Future Finance Function 45.4 (1985): 179-83. Ernst

& Young. Web.

Notes:
- Information that is not in other journals:
o Blockchain technology is likely to play an important role in the finance function
in coming years. CFOs should be anticipating how they are going to build the
relevant competencies and skill sets. They also need to start discussing the future
of their system of record, given that organizations could move from working with
a single, monolithic system of record inside the enterprise to working with many
different systems straight from study
o Effective change management including transparency about the rationale, and
continuous communication will be critical for technology transformations.
Mention that those who will be effected from the implementation of
Blockchain are CFOs and that EY did an entire study on CFOs opinion
on this change that will eventually happen.
o How does this impact the people within these financial institutions?
A talent shortage has hit the hiring world
A growth in smart machines means that companies need to hire as smart
or smarter people to fill up new roles.
o Highlights of CFO stories

McWaters, Jesse. "Why Blockchain Is Central to the Future of Finance - and Why That's More

Exciting than It Sounds." World Economic Forum. N.p., n.d. Web. 28 Apr. 2017.

Notes:
- Blockchains formal name is DLT (Distributed Ledger Technology) interesting
- Captures the imaginations and the wallets of financial institutions around the globe
- more than 25,000 patents have been made, $1.4 billion in VC investments, and 45 of the
worlds leading financial institutions have adopted to Blockchain.
- If you are not a computer scientist or a mathematician, trying to understand Blockchain is
like asking yourself, how does my iphone work? (good comparison, add in essay
because its easier to understand)
- The author says instead of trying to understand how Blockchain works, ask how will
this technology change the way we do business?
 Krishnakumar 24

- A report done by the World Economic Forum proves that Blockchain can be used in
several industries. In order to figure out a successful way of implementing Blockchain,
this report used interviews and workshops from a couple hundred industry professionals
to map the impact Blockchain will have on those specific industries.
- The finding at the end of the report was that Blockchain can be as successful as everyone
claims it can be but it will require time and collaboration to reach that point.
- Blockchain will be critical to the next generation of financial infrastructure but would
need the help from other new technologies (IoT, machine learning, quantum computing
etc.) Dont include quantum computing, too technical and not relevant to subject
- This process will not be built overnight; it will take time.

Miller, Geoffrey, and David Yermack. "Digital Currency, Blockchains, and the Future of the

Financial Services Industry." Lecture.

Notes:
- Bloomberg summarized a research report done by McKinsey & Co. stating, firing
people wont be enough to save the worlds biggest banks from technological and
regulatory changes that have reshaped the industrywhole businesses must go,
according to McKinsey & Co. Almost every bank will have to quash aspirations to be all
things to all customers only three to five global full-service banks will survive.
- This lecture is more of a course and covers the topics ranging from Blockchain to other
areas in the Fin Tech sector.
- The course entails the topic on how technology tends to be a barrier for many parts of the
financial industry simply because it is just to hard to keep up.
- Companies like McKinsey have stated that commercial banks and stock exchanges may
no longer exist or become significantly smaller within the next 10-20 years with more
transactions being exchanged on a peer to peer basis.

Thompson, Collin. "How Does the Blockchain Work (for Dummies) Explained

Simply."Medium. The Intrepid Review, 02 Oct. 2016. Web. 26 Apr. 2017.

Notes:
- Block chain is known to be one of the most misunderstood technologies of this century
- Historically speaking, when someone tries to transact money or anything that holds value,
they have to rely on mediators like a bank or the government to establish trust
- The banks and government provide authentication and record keeping
- When someone is making a digital transaction, it is even more important to have these
mediators
o This is because digital assets are easy to replicate and increases the chance of
double spending
- The question becomes, how are we able to make digital transactions without a third party
mediator?
 Krishnakumar 25

- Blockchain vs. Bitcoin

o Bitcoin first started from a research paper in 2008 by an individual with a
pseudonym of Satoshi Nakamoto.
o This paper established the electronic cash system called Bitcoin that made it
possible for online payments to be made instantly without the figure of a
mediator.
o What was revolutionary about this wasnt necessarily the digital currency but
instead the technology behind itBlockchain.
o Blockchain is to Bitcoin, what the internet is to email. A big electronic system,
on top of which you can build applications. Currency is just onSally Davies,
FT Technology Reporter
- Blockchain is a decentralized database (no bank or government involvement) that has
records of digital transactions.
- Blockchain is a distributed ledger, which basically means that is has a network of all the
information received via the internet and is visible to anyone within the network
- When a digital transaction is made, it is grouped together into a cryptographically
protected block along with other transactions that are made during the past few minutes.
o These are sent out to the whole network and miners (whom are people in the
network with high levels of computer science expertise) compete with one
another to validate each transactions by solving coding problems.
o The first miner that solves the block receives an award (in the bitcoin system, the
award would have been a bitcoin)
- After the block has been approved, it becomes part of a vertically structure chain. As
more and blocks are added to this chain it shows the history of every transaction that has
been made in that block.
- Because Blockchain is decentralized and open, it allows people to work together to
transact from one person to the next making it completely unnecessary for any kind of
mediator like a bank or the government.
- This brings security benefits since it makes it almost virtually impossible for someone to
hack the system.
o Why? If someone wanted to hack an entire system, they would not only have to
hack into a specific block but also into every previous block on the chain till it
reaches the foundational block. They would need to do it on every ledger as well
(in some cases it could be millions).
- revolutionizing the global economy
- An economy where trust is established not by central intermediaries but through
consensus and complex computer code.
- Blockchain will not only take control over digital currency, but also through electronic
voting, patient records and much more
- It does have the potential to affect several industries that rely on banks and
government mediators, however.
o Example: Banking, finance, academia, real estate, insurance, health care and
many other industries
- This will result in an increase in unemployment in such industries.
- Although these industries will be affected through the implementation of Blockchain
technology, the elimination of such mediators will still result in a positive outcome.
 Krishnakumar 26

- Blockchain will allow more people and businesses to trade more often both on a domestic
and international scale.
- Blockchain can also eliminate expensive intermediary fees that dont benefit individuals
or businesses.
- Every human being on the planet with a phone, will have equal access. Expanding
the total addressable market by 4XBrock Pierce
- Blockchain promises to democratize & expand the global financial system.