5 days ago Srikanth Tangudige  Discussion 2 COLLAPSE Top of Form According to Narayanan et al, (2016), Blockchain is a shared database. Cryptocurrency is electronic money created with technology controlling its formation and protecting transactions while hiding the user identities. Cryptocurrency is not controlled by any central authority. It can be sent directly between two parties of interest both privately and public keys. The two examples of cryptocurrency in the discussion are Ripple cryptocurrency and Zcash.  Ripple cryptocurrency intends to aid the sector, primarily through the facilitation of global payments. The company is faster growing and it says the top five global money transfer companies are likely to Ripple’s cryptocurrency to make their payments soon. Part of Zcash has enhanced security and privacy. The record of the transactions is made in the blockchain but the details of the sender, the recipient and the amount send remain private. Zcash has the ability for users to make either private or public payments. It also more efficient during the transaction with low fees while ensuring that digital transactions remain more private. According to Kappos, et al, (2018), the differences between Ripple and Zcash cryptocurrency include, Zcash is the most open, permissionless cryptocurrency that can fully protect the privacy of a transaction using the zero-knowledge cryptocurrency. Ripple connects banks, payment providers, digital assets exchanges and cooperates through Ripple net to provide one frictionless experience to send money globally. The similarities of the two cryptocurrencies are that their speed is high compared to bitcoin. Both the Ripple and Zcash have improved the security of the transactions and the user identifications compared to bitcoin. Things are sorted privately in Ripple and Zcash compared to bitcoin where things are publically sorted. I got an experience of using Zcash. My conclusion is that it is safe when doing transactions privately for the information is kept secure. The data and information recorded in it can only be accessed by the authorized personnel hence reducing information leakage. Reference Kappos, G., Yousaf, H., Maller, M., &Meiklejohn, S. (2018). An empirical analysis of anonymity in zcash. In 27th {USENIX} Security Symposium ({USENIX} Security 18) (pp. 463-477). Narayanan, A., Bonneau, J., Felten, E., Miller, A., &Goldfeder, S. (2016). Bitcoin and cryptocurrency technologies: a comprehensive introduction. Princeton University Press. Bottom of Form 6 days ago Shravani Kasturi  Discussion COLLAPSE Top of Form Blockchain is a technology used in digital currency and used in the distribution of digital data. Blockchain doesn't allow duplication of data. Bitcoin, Ethereum, Ether, and Litecoin are some crypto currencies (Capolare, Alana & Plastun, (2018)). A single individual owns a piece of unique information because it cannot duplicate. Crypto currency refers to a digital asset mostly currency tha ...

1. 5 days ago
Srikanth Tangudige
Discussion 2
COLLAPSE
Top of Form
According to Narayanan et al, (2016), Blockchain is a shared
database. Cryptocurrency is electronic money created with
technology controlling its formation and protecting transactions
while hiding the user identities. Cryptocurrency is not
controlled by any central authority. It can be sent directly
between two parties of interest both privately and public keys.
The two examples of cryptocurrency in the discussion are
Ripple cryptocurrency and Zcash. Ripple cryptocurrency
intends to aid the sector, primarily through the facilitation of
global payments. The company is faster growing and it says the
top five global money transfer companies are likely to Ripple’s
cryptocurrency to make their payments soon. Part of Zcash has
enhanced security and privacy. The record of the transactions is
made in the blockchain but the details of the sender, the
recipient and the amount send remain private. Zcash has the
ability for users to make either private or public payments. It
also more efficient during the transaction with low fees while
ensuring that digital transactions remain more private.
According to Kappos, et al, (2018), the differences between
Ripple and Zcash cryptocurrency include, Zcash is the most
open, permissionless cryptocurrency that can fully protect the
privacy of a transaction using the zero-knowledge
cryptocurrency. Ripple connects banks, payment providers,
digital assets exchanges and cooperates through Ripple net to
provide one frictionless experience to send money globally. The
similarities of the two cryptocurrencies are that their speed is
high compared to bitcoin. Both the Ripple and Zcash have
improved the security of the transactions and the user

2. identifications compared to bitcoin. Things are sorted privately
in Ripple and Zcash compared to bitcoin where things are
publically sorted. I got an experience of using Zcash. My
conclusion is that it is safe when doing transactions privately
for the information is kept secure. The data and information
recorded in it can only be accessed by the authorized personnel
hence reducing information leakage.
Reference
Kappos, G., Yousaf, H., Maller, M., &Meiklejohn, S. (2018).
An empirical analysis of anonymity in zcash. In 27th
{USENIX} Security Symposium ({USENIX} Security 18) (pp.
463-477).
Narayanan, A., Bonneau, J., Felten, E., Miller, A., &Goldfeder,
S. (2016). Bitcoin and cryptocurrency technologies: a
comprehensive introduction. Princeton University Press.
Bottom of Form
6 days ago
Shravani Kasturi
Discussion
COLLAPSE
Top of Form
Blockchain is a technology used in digital currency and used in
the distribution of digital data. Blockchain doesn't allow
duplication of data. Bitcoin, Ethereum, Ether, and Litecoin are
some crypto currencies (Capolare, Alana & Plastun, (2018)). A
single individual owns a piece of unique information because it
cannot duplicate. Crypto currency refers to a digital asset
mostly currency that makes use of cryptography for the purpose
of regulating and safeguarding transactions. The cryptography
controls the development of new units and also verification of
funds transfer.
According to Hayes, (2017), Bitcoin is a crypto currency that

3. makes use of keys, both private and public. The public key is
printed to the public and provides the address that receives the
Bitcoin. The private key used in certifying transmissions of the
Bitcoin. Litecoin is a crypto currency hosted on an open-source.
It is not under management by any central power. Both Litecoin
and Bitcoin depend on the integrity of the network they use as
their basis. Litecoin accommodates more coins compared to
Bitcoin. Litecoin also provides a more substantial and better
speed at which it carries its transactions. It is faster than
Bitcoin. The two crypto currencies also make use of different
algorithms for cryptography. Litecoin uses the Scrypt algorithm
while Bitcoin uses the SHA-256. The SHA-256 is a more
complicated algorithm, and it allows for processing in a parallel
manner. Mining for Bitcoin implements uses the Application-
Specific Integrated Circuits. The kind of mining provided by the
system is complicated for some users.
I have used crypto currency before. I made use of Bitcoin. My
use of Bitcoin was associated with many benefits, for instance
confidentially spent my money. The privacy is because of use
public keys for identification. The confidentiality was essential
for me as I was seeking a medical procedure which is not
acceptable. It helped me send cash at a low cost. I also used the
money to carry out online purchases of products.
References
Hayes, A. S., (2017), crypto currency value formation: an
empirical study leading to a cost of production model for
valuing Bitcoin. Telematics and Informatics, 34(7), 1308-1321
Capolare, G. M., Alana, L. G., Plastun, A., (2018), persistence
in the crypto currency market. Research in International
Business and Finance, 46, 141-148
Bottom of Form

4. A BRIEF INTRODUCTION TO BLOCKCHAIN
“BLOCKCHAIN” HAS MANY MEANINGS
“To understand the power of blockchain systems, and the things
they can do, it is
important to distinguish between three things that are commonly
muddled up, namely
the bitcoin currency, the specific blockchain that underpins it
and the idea of
blockchains in general.”
The Trust Machine, THE ECONOMIST, Oct. 31, 2015
“BLOCKCHAIN” HAS MANY MEANINGS
Phone
• The idea of a
phone network
• A specific phone
network (e.g.,
AT&T)
• A specific use of
the phone network
(e.g., fax)
Blockchain

5. • The idea of
blockchain
• The specific
blockchain that
underlies Bitcoin
or another coin
offering
• Bitcoin or another
cryptocurrency
WHAT IS BLOCKCHAIN?
A technology that:
permits transactions to be
gathered into blocks and recorded;
allows the resulting ledger to be
accessed by different servers.
cryptographically chains blocks
in chronological order; and
WHAT IS A DISTRIBUTED LEDGER?
Centralized Ledger
Bank

6. Client A
Client
C
Client D
Client
B
Distributed Ledger
Node A
Node B
Node CNode D
Node E
• There are multiple ledgers, but Bank holds the “golden record”
• Client B must reconcile its own ledger against that of Bank,
and
must convince Bank of the “true state” of the Bank ledger if
discrepancies arise
• There is one ledger. All Nodes have some level of access to
that
ledger.
• All Nodes agree to a protocol that determines the “true state”
of
the ledger at any point in time. The application of this protocol
is
sometimes called “achieving consensus.”

7. WHAT IS A DISTRIBUTED LEDGER?
Single Entity Multiple Entities
HOW MIGHT A DISTRIBUTED LEDGER WORK?
Users initiate
transactions
using their Digital
Signatures
Users Broadcast
their
transactions to
Nodes
One or more
Nodes begin
validating each
transaction
Nodes aggregate
validated
transactions into
Blocks
Nodes Broadcast

8. Blocks to each
other
Consensus
protocol used
Block reflecting
“true state” is
chained to prior
Block
WHERE MIGHT BLOCKCHAIN USE CRYPTOGRAPHY?
• Digital Signatures
• Private/Public Keys
Initiation and Broadcasting
of Transaction
• Proof of Work and certain alternativesValidation of
Transaction
• Hash FunctionChaining Blocks
THE POWER OF DISTRIBUTED LEDGERS
BLOCKCHAIN
It can be used to allow
owners of assets to

9. exercise certain rights
associated with
ownership, and to
record the exercise of
those rights.
•Proxy Voting
It can be used to
record those
transfers of value or
ownership of assets
•These records may be
very difficult to alter,
such that they are
sometimes called
effectively immutable
It can be used to
transfer value or the
ownership of assets
•A human being or a
Smart Contract can
initiate the transfer
It can be used to
create value or issue
assets
It can be used without a central
authority by individuals or
entities with no basis to trust
each other
The degree of trust between users determines the technological

10. configuration of a distributed ledger.
HOW MIGHT DISTRIBUTED LEDGER PROPOSALS DIFFER?
Participation Open Closed
Permission Permissionless Permissioned
Ledger Design One ledger One ledger or Segregated ledgers
Validation Methodology depends on degree of trust between
nodes. Where there is no basis
for trust, may be achieved through proof of work, which
requires the algorithmic
solving of a cryptographic hash.
Consensus Mechanism Mechanism depends on degree of trust
between nodes. Where there is no
centralized authority, consensus may be determined
algorithmically.
References
• Stoyanovich, M., & Tanz, F. E. (2019). Coming to Grips with
Blockchain. Benefits Magazine,
56(5), 20-25. Retrieved from
http://search.ebscohost.com/login.aspx?
direct=true&AuthType=shib&db=f5h&AN=135900272&site=eds
-live
• Waldo, J. (2019). A Hitchhiker’s Guide to the Blockchain
Universe. Communications of the
ACM, 62(3), 38–42. Retrieved from

11. https://doi.org/10.1145/3303868
• Burns, S. (2019). Blockchain: Hype Vs Reality. Computer
Weekly, 21-24. Retrieved from
http://search.ebscohost.com/login.aspx?
direct=true&AuthType=shib&db=f5h&AN=138564674&site=eds
-live
• Tarzey, B. (2019). Inside Blockchain and Its Various
Applications. Computer Weekly, 16-20.
Retrieved from http://search.ebscohost.com/login.aspx?
direct=true&AuthType=shib&db=f5h&AN=138681123&site=eds
-live
• Carson, B., Romanelli, G., Walsh, P., & Zhumaev, A. (2018).
Blockchain beyond the hype:
What is the strategic business value? McKinsey Quarterly, (4),
118–127. Retrieved from http://
search.ebscohost.com/login.aspx?
direct=true&AuthType=shib&db=buh&AN=133693412&site=ed
s-live
A Brief Introduction to Blockchain“blockchain” Has many
meanings“Blockchain” has many meaningsWhat is
Blockchain?What is a Distributed Ledger?What is a distributed
ledger?How might a distributed ledger Work?Where might
Blockchain use cryptography?The power of Distributed
ledgersHow might distributed ledger proposals
differ?Questions?
Impact of Blockchain on IT Audit
Blockchain Technology Overview

12. Three Levels of Blockchain, Tokens
Alliances and Industry Adoption
Smart Contracts
Identity Management
Criticism and Challenges
Impact on the IT Audit Function
Learning and Engagement
Agenda
*
Blockchain technology is a digital innovation that is poised to
significantly alter financial markets within the next few years,
within a cryptographic ecosystem that has the potential to also
significantly impact trusted computing activities and therefore
cybersecurity concerns as a whole.
Blockchain Overview
.
*
How many of you:
Have heard of bitcoins?
Own cryptocurrency?
Feel you understand the underlying blockchain technology?

13. Feel you can summarize for us the benefits of the “trust
economy”?
Are involved in projects that involve blockchain technology
implementation or related activities?
Student Exposure
*
Where It All Started
Blockchain technology was first introduced in a whitepaper
entitled: “Bitcoin: A Peer-to-Peer Electronic Cash System,” by
Satoshi Nakamoto in 2008.
No reliance on trust
Digital signatures
Peer-to-peer network
Proof-of-work
Public history of transactions
Honest, independent nodes control majority of CPU computing
power
Nodes vote with CPU computing power
Rules and incentives enforced through consensus mechanism
https://bitcoin.org/bitcoin.pdf
*
Cryptocurrency Summarized

14. Bitcoin was the first digital, i.e., cryptocurrency
A maximum of 21 million Bitcoins can be generated
Just as with real world mining, energy must be invested to solve
complex mathematical problems by which systems earn Bitcoins
https://www.cryptocoincharts.info/coins/info claims to be
indexing 4,220 cryptocurrencies
Most circulated: Bitcoin, Ethereum, Litecoin
*
The Technology Behind Bitcoin
Think of Bitcoin as an electronic asset (as well as a digital
currency)
A network of computers keeps track of Bitcoin payments, and
adds them to an ever-growing list of all the Bitcoin payments
that have been made, called “The Bitcoin Blockchain”
The file that contains data about all the Bitcoin transactions is
often called a “ledger”
Bitcoin value is created through transaction processing, referred
to as “mining,” which is performed by distributed processors
called “nodes” of the peer-to-peer network
A Gentle Introduction to Bitcoin by Antony Lewis,
https://bravenewcoin.com/assets/Reference-Papers/A-Gentle-

15. Introduction/A-Gentle-Introduction-To-Bitcoin-WEB.pdf
*
Mining Evolution
Mining is the process whereby value is created through
transaction processing that occurs on nodes of the network.
In 2009, one could mine 200 Bitcoins with a personal, home
computer. In 2015, it would take about 98 years to mine just 1
Bitcoin.
Today there is almost no money to be made through traditional
home mining.
ASIC (Application Specific Integrated Circuit) has been
designed strictly for mining Bitcoins.
Groups of miners have formed mining pools, with each being
paid their relative share for their contribution to the work
performed.
My Dirty Little Bitcoin Secrets by Ofir Beigel,
www.99bitcoins.com
*
Storage for digital records
Exchanging digital assets (called tokens)
Executing smart contracts

16. Ground rules – Terms & conditions recorded in code
Distributed network executes contract & monitors compliance
Outcomes are automatically validated without third party
Tech Trends 2017, The Kenetic Enterprise, “Blockchain: Trust
economy”, Deloitte University Press, 2017
Three “Levels” of Blockchain
*
A broader use is supported by the digital infrastructure
introduced through Bitcoin, as represented by “tokens”.
A “token” can be defined as a “scarce digital asset based on
underlying technology inspired by Bitcoin.”
Tokens may use similar codebases but different blockchain
databases.
Ethereum was Bitcoin-inspired but has its own blockchain and
is engineered to be more programmable. Tokens can be issued
on top of the Ethereum blockchain.
Token buyers are buying private keys, which are similar to API
keys, but can be transferred to other parties without consent.
“Thoughts on Tokens”, Balaji S. Srinivasan and Naval Ravikant
A General Discussion about Tokens

17. *
Tokens have a value and therefore a price.
Tokens are a new model for technology and can be an
alternative to equity-based financing.
Tokens do not dilute capital. They introduce a huge increase to
buyer base and time-to-liquidity.
Token launches differ from equity sales; however, they can be
issued as a way to share profits.
Tokens can be sold internationally over the internet and are
always open for business.
Tokens decentralize the process of funding technology.
Thoughts on Tokens, Balaji S. Srinivasan and Naval Ravikant
Tokens, continued
*
Tokens enable a better-than-free new business model.

18. Tokens will introduce the rise of the “tech savvy senior
executive.”
Tokens accommodate immediate custody without an
intermediary.
Tokens can be extended to hardware, as part of the internet of
things.
Thoughts on Tokens, Balaji S. Srinivasan and Naval Ravikant
Tokens, continued
*
Smart Contracts
Consensus protocols are key to determining the sequence of
actions resulting from the contract’s code. This enables
peer-to-peer trading of everything from renewable energy to
automated hotel room bookings.
“Contracts Get Smarter with Blockchain”, CIO Journal, The
Wall Street Journal, World Trade Organization, International
Trade Statistics 2015, 2015, p. 41.

19. Current paper-based systems drive $18 trillion in transactions
per year.
*
Hyperledger is an open source collaborative effort created to
advance cross-industry blockchain technologies. It is a global
collaboration, hosted by The Linux Foundation, including
leaders in finance, banking, IoT, supply chain, manufacturing,
and technology.
Business Blockchain Frameworks are hosted with Hyperledger.
Hyperledger addresses important features for a cross-industry
open standard for distributed ledgers. The Linux Foundation
hosts Hyperledger as a Collaborative Project under the
foundation.
To learn more, visit: https://www.hyperledger.org/.
www.hyperledger.org
Hyperledger
*
Hyperledger Projects

20. A few of the Hyperledger Projects include:
Hyperledger Burrow – Permissible smart contract machine with
a modular blockchain client, built in part to the specification of
the Ethereum Virtual Machine (EVM)
Hyperledger Fabric – Foundation for developing plug-n-play
solutions within a modular architecture
Hyperledger Iroha – Simple and easy blockchain framework
designed to be incorporated into infrastructure projects
requiring distributed ledger technology
Hyperledger Sawtooth – A modular platform for building,
deploying, and running distributed ledgers
*
Ethereum is a decentralized platform that runs smart contracts:
applications that run exactly as programmed without any
possibility of downtime, censorship, fraud, or third party
interference.
The Ethereum project was bootstrapped via an ether pre-sale
during August 2014 by fans all around the world. It is
developed by the Ethereum Foundation, a Swiss nonprofit, with
contributions from individuals and organizations across the
globe.
www.ethereum.org
Ethereum Alliance

21. *
Several Ethereum offerings include:
The Ethereum Wallet, which is a gateway to decentralized
applications on the Ethereum blockchain, allowing users to hold
and secure ether and other crypto-assets built on Ethereum, as
well as write, deploy and use smart contracts
Design and issue your own cryptocurrency/traceable token
Kickstart a project with Crowdsale
www.ethereum.org
Ethereum Tools
*
Ether is the crypto-fuel for the Ethereum network.
Ether is a necessary element – a fuel – for operating the
distributed application platform Ethereum. It is a form of
payment made by the clients of the platform to the machines
executing the requested operations, functioning as the incentive
that ensures that developers will write quality applications, and

22. that the network remains healthy.
The total supply of ether and its rate of issuance was decided by
the donations gathered on the 2014 presale.
Developers who intend to build apps that will use the Ethereum
blockchain need ether.
Users who want to access and interact with smart contracts on
the Ethereum blockchain also need ether.
www.ethereum.org
What is Ether?
*
Cross-Industry Adoption
Sectors leading the way in blockchain implementation:
Consumer products
Manufacturing
Technology
Media
Telecommunications
Health care
Life sciences
Thirty-nine percent of the senior executives at large U.S.
companies initially surveyed indicate they have little or no
knowledge about blockchain technology. Many deemed it to be
crucial for their companies and industries. Forty-two percent

23. believe it will disrupt their industries.
“Blockchain Adoption Varies by Industry”, CIO Journal, The
Wall Street Journal
*
Financial Services Industry
As noted by A. Michael Smith in “Creating Assurance in
Blockchain,” trust and efficiency are the main value drivers for
any use case. The finance world is driven by technology.
Tracking risk and monitoring compliance with laws and
regulations within an increasingly complex cybersecurity
environment requires considerable time and resources.
The financial services industry immediately saw opportunities
in blockchain and has been investing heavily in its usage,
primarily as a part of private implementations.
Creating Assurance in Blockchain, Volume 2, 2017, by A.
Michael Smith
Banking on change: How to respond to new expectations for
audit committees by PWC Internal Audit Foundation, Douglas
Anderson, CIA, CRMA, Cassian Joe, and Klaas J. Westerling

24. *
Identity Management
The IT audit is broadly concerned with identity management
concerns.
Protecting access to data, and the systems that are in place to
process, store, and report on that data, requires ongoing
resource dedication.
Multiple solutions are available, all of which require
configuring and managing multiple identifiers for an
individual’s various identities.
Identity management is an area that will certainly be impacted
by widespread use of private keys to secure transactions.
*
Distributed Access Management
Creating an identity on blockchain can give individuals greater
control over who has their personal information and how they
access it
Areas impacted include passports, e-residency, birth
certificates, wedding certificates, IDs, online account logins,
etc
Digital ID’s can provide digital watermarks that can be assigned
to every online transaction of any asset

25. “21 Companies Leveraging Blockchain for Identity Management
and Authentication” by Elena Mesropyan,
https://letstalkpayments.com/22-companies-leveraging-
blockchain-for-identity-management-and-authentication/
*
Protecting Private Keys
Within the blockchain, trust relies on the safekeeping of private
keys, in support of a truly distributed identity management
Ultimately, that safekeeping resides with the actions taken by
individuals to secure their private key
For cryptocurrency traders, one frequently sees the
recommendation to write one’s private key down on a piece of
paper and put it up for safekeeping in, for example, a safe
deposit box
*
Digital ID

26. Solution
s
May 24, 2017, saw the release of a Digitial ID solution by
Netki, a California blockchain startup
Released at Consensus 2017, this is a highly-anticipated Digital
ID smartphone app that uses Hyperledger blockchain to provide
decentralized, open-source identity management
Approved by governments, fully Anti-Money Laundering
(AML) and Know Your Customer (KYC) inclusive
https://bravenewcoin.com/news/netki-launches-digital-id-
solution-which-bitt-is-using-with-central-banks-in-the-
caribbean/
*

27. Criticism and Challenges
Critics have cited the following blockchain challenges:
Nascent technology
Uncertain regulatory status
Large energy consumption
Control, security and privacy
Integration concerns
Cultural adoption
Cost
Challenges associated with audit, taxes, and compliance
Creating Assurance in Blockchain, Volume 2, 2017, by A.
Michael Smith
Deloitte’s Blockchain technology: 9 benefits & 7 challenges,
https://www2.deloitte.com/nl/nl/pages/innovatie/artikelen/block
chain-technology-9-benefits-and-7-challenges.html
*

28. An area of heavy criticism has to do with the vast amounts of
energy necessary to process and store transactions, especially as
the use of blockchain technology increases
The Bitcoin blockchain network’s miners are attempting 450
thousand trillion solutions per second in efforts to validate
transactions, using substantial amounts of computer power
Note that there are also opportunities to decentralize the energy
grid
Wasted resources: Mining Bitcoin wastes huge amounts of
energy ($15million/day)
Deloitte’s Blockchain technology: 9 benefits & 7 challenges,
https://www2.deloitte.com/nl/nl/pages/innovatie/artikelen/block
chain-technology-9-benefits-and-7-challenges.html
Blockchain in the Energy Sector: Institutional Disruption? By
Marius Buchmann
http://www.theenergycollective.com/enerquire/2402120/blockch
ain-energy-sector-institutional-disruption
Energy Consumption

29. *
Summary
Although the technology is still in its infancy, boundless usage
opportunities exist
The identity management landscape is likely to shift
dramatically
There is sure to be evolution within IT audit as various use
cases unfold
Features that create trust could drive unachievable overhead
costs
Compliance burden should eventually be eased as the
technology is adopted, but this requires regulatory updates,
which could take a while
Tech Trends 2017, The Kenetic Enterprise, “Blockchain: Trust

30. economy”, Deloitte University Press, 2017
*