Module IV -

Part II
Blockchain-based ID card

Three steps for creating and using ID cards are detailed below:

First, have a unique name.

Then others can search for your Blockchain-based ID.

Second, create and confirm your personal profile.

Connect your Blockchain-based ID card with your social network profile to prove
that the card is yours and confirm your personal information.

Third, start to use your Blockchain-based ID card.

Share your Blockchain-based ID card on your website, social network profile, and
business cards so that others can easily search for you on the Internet.
Advantages of Blockchain-based ID

First, it can safely and conveniently crack the problem of information loss.

Second, it is tamper-resistant and will not be lost forever.

If everyone has a Blockchain-based ID card, it means that one has a complete,
unique, and permanent entry that records all one’s lifetime transactions.

In the future, it may take quite some time for Blockchain-based ID cards to connect
all personal information together, but it promises to immediately replace ID cards,
fingerprints, passports, and other identification tools.

Once Blockchain-based ID cards are issued, iris recognition and other biometric
recognition technologies may be out of date.

If one wants to log into a system that has applied Blockchain technology through
assuming the identity of others, it means that he needs to log into data chains on
hundreds of millions of computers, which is almost impossible.
Blockchain in Finance
In the current banking systems of most countries, all banks check their accounts through
an electronic ledger, a centralized structure that has more authorities and larger stored
data volume as the institution approaches closer to the central part of this structure.
At the same time, they need to spend extensively on cooperation costs to maintain data
accuracy in this decentralized system.
Since Blockchain technology is decentralized, it can create a distributed and open network
for banks, in which all transaction data will be transparent and shared by everyone.
Distributed accounting based on Blockchain technology has the ability to remove invalid
bank intermediaries and cut operating costs significantly.
At present, Blockchain technology has received recognition from many banks that have
launched Blockchain labs, in which they are devoted to developing tools to transform the
whole banking system.
According to a report from Spain, US$15 to US$22 billion in operating costs
are expected to be saved every year before 2022 if Blockchain technology is
applied to banks.
The mainstream and traditional cross border remittance is a wire transfer, in which
funds may take three to five workdays to move from the remitter’s account to the
receiver’s account. Besides, bank intermediaries and Society Worldwide Interbank
Financial Telecommunication (SWIFT) charge communication fees toward message
exchanges through their system.
Blockchain technology can enable payments and settlements to be performed
directly between the sender and the receiver, reducing all fees charged by
middlemen and making cross border payments and settlements quickly completed
via peer-to-peer.
What’s more, this technology can not only reduce clearing time, but it also achieves
round-the-clock payments and real-time transactions, which makes a cash
withdrawal easy and free from hidden costs.
According to the calculations of McKinsey, every transaction cost may be reduced
to US$15 from about US$26 by merely applying Blockchain technology to cross
border payments and settlements in business-to-business.
Blockchain in Supply Chain

In the current supply chain system, the supply chain of a particular commodity includes purchasing
raw material, producing an intermediate product and final product, and selling the product to
consumers through sales networks.

This process puts suppliers, manufacturers, distributors, retailers, and customers together as a
whole,

With its open and traceable feature, Blockchain technology can program and digitalize any
paper-based process, making it less labor-extensive.

In a Blockchain-based system, all involved parties can share files using a decentralized ledger.

Smart contracts make it possible for payments to be made when requirements for time and results
are met, which not only maximizes efficiency, but also dramatically reduces manual errors.
Blockchain and Government
With decentralized, immutable, trustworthy, and traceable features, Blockchain plus the
government also has the potential to transform society.
a) Basic Information Protection
How does the government information system protect our data? Information from
subordinate departments will be gathered for governmental authorities, and the latter will
have the right to use them.
In this model, a hacker only needs to hack a centralized router when attacking
governmental information systems.
Once he succeeds, information stored in this router is likely to be leaked, damaged, lost,
and criminally compromised.
However, the application of Blockchain technology is expected to increase the security of
information systems significantly.
In this way, government information will
be distributed and stored in each node,
and every department will own a general
ledger, which is hash-encrypted,
immutable, and resistant to leak.
Under such circumstances, if a hacker
successfully attacks a single node,
neither will government information be
stolen nor the system influenced, as
other nodes also store the same entire
ledger.
Moreover, it is useless to modify the data
in a node, as this action cannot be
recognized by the whole network.
b). Identification of Citizens

Citizen identification is regarded as an indispensable part of government affairs, but

it’s also time-consuming and labor-intensive.

Blockchain technology, however, enables all one’s information to be stored in one’s

“address,” and it can be used whenever needed.

The immutable feature of this technology also dissipates people’s worries about
whether their certificates are valid or not.

The Blockchain-based citizen identification system can not only effectively cut the
waste of social resources, but also ensure the highest level of authenticity, and
therefore receive the recognition of all people.
c) Government Affairs Information Transparency

Currently, government information around the world is hardly transparent, as we

only know established laws but have no idea about how they are enacted.

Therefore, it is often a scapegoat who will stand out and be responsible for the
errors of laws, resulting in a chaotic situation lacking in supervision.

Blockchain technology has the potential to increase the transparency of government

affairs and enables policy implementation to be free from the disturbance of external
factors.

At the same time, the traceable feature of policies also helps us make more prudent
decisions.
d) Government Supervision on Taxation
Tax evasion and tax fraud are serious issues around the world.
Some companies and individuals evade taxes by cooking the books.
However, with Blockchain technology, a company can build a distributed ledger
when it is established, which is a database recording every transaction during all
operations.
It also can perform mutual authentication with the distributed ledgers of other
companies through smart contracts.
As every account is immutable and traceable, tax evasion and tax fraud can be
effectively eliminated.
What’s more, once these illegal conducts are revealed, they will be recorded on
Blockchain and become a permanent record.
e) Public Bidding for Projects
In the bidding for government projects, there has been a phenomenon known as “those
who have good relationships with governments win.”
Many companies have to sit and wait after bidding, and in most cases, they have no idea
about why they fail to win the bidding.
Sometimes, even though they didn’t win the project, their bidding plans may be used in the
follow-up constructions.
What companies can do is to comfort themselves that what happens is just a coincidence.
With Blockchain technology, however, all bidding information can be transparent, and only
specific people have access to related records, which, to some degree, can curb
corruption.
Imagine that when corruption records are stored in a ledger to which your boss always has
access, maybe corruption will no longer be so blatant and ubiquitous.
Blockchain in Healthcare
The application of Blockchain technology in the medical field is divided into the
following areas: digital clinical record, “DNA Wallet,” medical anticounterfeiting, and
protein folding.
a) Digital Clinical Record
Traditionally, the clinical records in different hospitals stay isolated.
If the patient refuses or forgets to provide his or her clinical records to the doctor,
the hospital has no other access to it, which hinders the diagnosis and treatment
process.
Instead, Blockchain technology can be applied to create digital records for everyone
to store their clinical history and medical data.
b) DNA wallet

DNA wallet is a Blockchain-based

system where users can store their
genetic and clinical data and access
those data with their private key.

This will facilitate pharmaceutical

developments because enterprises,
research institutions, and other
organizations can apply for authorization
to use these data for medical research.
c) Medicine Anticounterfeiting

Blockchain technology can be used to

prevent medicine counterfeiting.

The theoretical foundation is similar to

identity verification, leveraging the
traceability of Blockchain to label crude
drugs and pharmaceutical products.

Thus the fraudulent medications

produced by counterfeiters will find no
market, since consumers can check the
numeration of the drug to verify whether
it is genuine or not.
d) Protein Folding
The process of protein folding is very difficult to model.
Stanford University has previously relied on a very expensive supercomputer to
simulate the process of protein folding.
However, the disadvantages of this approach are obvious: enormous cost and a
possible single point of failure.
Using Blockchain technology can create a distributed network to assist in folding
proteins.
Each node in the network can call on the computing power of the entire network
when performing operations.
When 10,000 computers work together to calculate data for you, there is no need to
purchase an expensive supercomputer.
Blockchain Technology in Cloud Computing
The major areas where blockchain has the potential to provide improvements in
comparison to existing cloud solutions are:
1. The blockchain system can be very beneficial in the field of functionality or
performance enhancement.
Being a decentralized system, blockchain can provide great help in establishing
architecture where several computers can work at the same time for one task like storage
or processing of data which can reduce the overall time of the operation and enhance the
speed of processing and uploading data.
2. Cloud computing generally deals with a large amount of data, so there is always a risk
of data insecurity as cloud computing works on a centralized architecture, because of this
there is a possibility of the central server being hacked by hackers and in that case, the
whole system will collapse and also there will be no backup of data so lost data can’t be
recovered.
So there is the scope of using blockchain in cloud computing for solving these issues.
Benefits of Blockchain in Cloud Computing

❖ Decentralization
❖ Increased Data Security
❖ More Efficient Ownership Tracking of Goods and Services
❖ Fault Tolerance
❖ Scalability

Applications of Integration of Blockchain and Cloud

❖ Smartening Healthcare Sector

❖ Blockchain-Based Smart Home Automation
❖ Blockchain-Enabled Smart Transportation
❖ Smart Manufacturing
Blockchain and Artificial Intelligence
Blockchain and artificial intelligence are combining to upgrade everything from food
supply chain logistics and healthcare record sharing to media royalties and financial
security.
Blockchain can even be used to create trackable, traceable AI by using the same
methods used to protect food and health care logistics.
The integration of AI and Blockchain affects many aspects, including Security – AI
and blockchain will offer a double shield against cyber-attacks.
AI can effectively mine through a huge dataset and create newer scenarios and
discover patterns based on data behavior.
Blockchain helps to effectively remove bugs and fraudulent data sets.
New classifiers and patterns created by AI can be verified on a decentralized
blockchain infrastructure and verify their authenticity.
This can be used in any consumer-facing business, such as retail transactions.

Data acquired from the customers through blockchain infrastructure can be used to create marketing
automation through AI.

Real-Life Applications:

1. FINALIZE

Finalize is a software platform that uses blockchain and machine learning to build applications aimed at
improving civil infrastructure.

The company’s tools automate and speed up construction industry workflow, management, and verification
processes, and its technology also integrates with wearables to meet safety regulations.

2. BLACKBOX AI

Blackbox AI develops artificial intelligence tools for emerging technologies.

The company’s engineers create a customized information architecture that powers everything from
machine learning and natural language processing to blockchain tools.

Besides developing infrastructure for blockchains, the company also offers consultation services that focus
on how their products can maximize a blockchain’s potential.