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Saikrishna Pechara
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Activity 3
University of the Cumberland’s
Saikrishna Pechara
Dr. Hayley Rice
Market segmentation involves classifying a homogenous market
of prospective consumers into clearly identifiable groups under
their location,
traits, interests, needs, and reactions to a particular market
action (Iacobucci, 2014). There are four kinds of market
segments: demo-
graphic, geographic, psychographic, and behavioral segments.
Demographic segmentation is evident in the case of Coca-Cola
targeting the
youth more than the elderly because of their passion for soft
drinks. This segmentation is based on age. Demographic market
segmenta-
tion examples include age, income, education, ethnicity, annual,
location, and family status. It is easy to uncover different sites
for market re-
search since demographic information is statistical ad factual.
An example of demographic segmentation is a brand selling
enterprise market-
ing platform. The brand is likely to target marketing managers
working in large organizations capable of making purchase
decisions for their
teams. Psychological marketing is the cornerstone of a
successful company. Marketing psychology shows the
company's competitive edge in
the market, and buyer psychology utilized to elevate,
streamline, and personalize customer experiences. The
marketing psychology examples
are authority, liking, price sensitivity, urgent scarcity, and

exclusive scarcity. A company that sells beauty products can
leverage power to boost
the trustworthiness of those products, i.e., imposing a theory
that consumers trust individuals in charge, which depicts
psychological market-
ing. Behavioral segmentation focuses on the behavior or actions
of the customers. They include spending habits, purchasing
habits, brand
interactions, and user status. Luxury car sellers may target
clients who have recently purchased (purchasing history) their
products; this is
a case of behavioral segmentation. The market is segmented
based on the history and behavior of the customers. Geographic
segmentation is
the simplest among the forms of market segmentation, and it
categorizes customers based on geographic borders (Liu et.al,
2019). Exam-
ples of geographic market segmentation are climate, country,
city, urban or rural, and radius around a given region. An
example of geographic
segmentation is the luxury car company deciding to target
customers living in cold climates where vehicles are equipped
for snowy weather.
The marketing efforts can focus on areas where their target
customers are likely to work, eg, urban and city centers. Market
segmentation is
significant and has a profound impact on firms' profitability.
First, it enables firms to achieve greater corporate focus. When
a corporation fo-
cuses on specific market segments, it can target the right group
with the right product (Cross, 2015). This empowers it to tailor
specific services
and products according to its clients' demands. This goes a long
way in ensuring maximum customer satisfaction, thus
establishing customer
trust and loyalty. Secondly, a business's market competitiveness

is likely to increase when it focuses on a specific segment.
Companies come
up with customized marketing campaigns that target specific
consumer segments. Effective marketing campaigns boost firms'
sales while effi-
ciently utilizing marketing resources. Businesses generate
higher profits from the sale of products if their marketing
campaigns are fruitful.
Thirdly, it enables marketers to be conversant with their
customers' needs; this allows them to discover essential features
lacking in their prod-
ucts. Marketing teams also assess consumers' opinions
concerning their products. This enables the business to gauge
the popularity of its
products. This information allows companies to plan on relevant
courses of action on how they can better their products and
services to meet
the consumers' needs. Fourthly, market segmentation makes it
possible for businesses to provide unique communication to
different market
segments (Venter, 2015). Therefore, firms can identify with
various consumers' needs, making it easy to receive valuable
feedback concerning
their products. This feedback could be quite helpful in the
development of customized products. Lastly, businesses may
identify market gaps
or opportunities in the production and supply of complements.
They may step in to provide these essential complementary
goods and ser-
vices, thus expanding the original product's market. In so doing,
the business can achieve a higher return on its investments.
Successful com-
panies may realize some of the above benefits if they choose to
target an entire market, but this would be an uneconomical
move since it
would lead to not just excessive but also inefficient utilization

of resources. Successful companies need to embrace market
segmentation if
they are to utilize their resources efficiently.
References
Bruwer, J., Roediger, B., & Herbst, F. (2017). Domain-specific
market segmentation: a wine-related lifestyle (WRL) approach.
Asia Pacific
Journal of Marketing and Logistics.
1
2 3
4
4
5
3
6 6
Cross, J. C., Belich, T. J., & Rudelius, W. (2015). How
marketing managers use market segmentation: An exploratory
study. In
Proceedings of the 1990 Academy of Marketing Science (AMS)
Annual Conference (pp. 531-536). Springer, Cham. Iacobucci,
D. (2014). Market-
ing management. Cengage Learning. Liu, J., Liao, X., Huang,
W., & Liao, X. (2019). Market segmentation: A multiple criteria
approach
combining preference analysis and segmentation decision.
Omega, 83, 1-13. Venter, P., Wright, A., & Dibb, S. (2015).
Performing mar-

ket segmentation: a performative perspective. Journal of
Marketing Management, 31(1-2), 62-83.
7 8 7 8
7 9
7 1
1
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University of the Cumberland’s
Original source
University of Cumberland’s
2
Student paper
There are four kinds of market
segments:
Original source
There are many different kinds of
market segments you can create
saikrishnapechara
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3
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demographic, geographic, psycho-
graphic, and behavioral segments.
Original source
Demographic, Psychographic, Geo-
graphic, Behavioral
4
Student paper
Demographic market segmentation
examples include age, income, edu-
cation, ethnicity, annual, location,
and family status.
Original source
The demographic segmentation is
typically focused on attributes such
as age, gender, income, location,
family situation, annual income, ed-
ucation, and finally ethnicity

4
Student paper
They include spending habits, pur-
chasing habits, brand interactions,
and user status.
Original source
Some of these categories include
purchasing habits, spending habits,
and brand interactions
5
Student paper
this is a case of behavioral
segmentation.
Original source
What Is Behavioral Segmentation
3
Student paper
Examples of geographic market
segmentation are climate, country,
city, urban or rural, and radius
around a given region.
Original source

Thirdly, geographic market seg-
mentation examples included Cli-
mate, city, country, radius around a
certain location, urban or rural
6
Student paper
Bruwer, J., Roediger, B., & Herbst, F.
Original source
Bruwer, J., Roediger, B., & Herbst, F
6
Student paper
Domain-specific market segmenta-
tion: a wine-related lifestyle (WRL)
approach. Asia Pacific Journal of
Marketing and Logistics.
Original source
Domain-specific market segmenta-
tion a wine-related lifestyle (WRL)
approach Asia pacific journal of
marketing and logistics, 29(1), 4-26
7
Student paper

C., Belich, T. J., & Rudelius, W.
Original source
C., Belich, T J., & Rudelius, W
8
Student paper
How marketing managers use mar-
ket segmentation:
Original source
How marketing managers use mar-
ket segmentation
7
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An exploratory study.
Original source
An exploratory study
8
Student paper
In Proceedings of the 1990 Acad-
emy of Marketing Science (AMS)
Annual Conference (pp.

Original source
In Proceedings of the 1990 Acad-
emy of Marketing Science (AMS)
Annual Conference (pp
7
Student paper
Liu, J., Liao, X., Huang, W., & Liao, X.
Original source
Liu, J., Liao, X., Huang, W., & Liao, X
9
Student paper
A multiple criteria approach com-
bining preference analysis and seg-
mentation decision.
Original source
A multiple criteria approach com-
bining preference analysis and seg-
mentation decision
7
Student paper
Omega, 83, 1-13.

Original source
Omega, 83, 1-13
1
Student paper
Performing market segmentation:
Original source
Market segmentation analysis
saikrishnapechara
Highlight
111
Blockchain-Outside of
Currencies
Digital currencies were the first ever application of blockchain
technology, arguably
without realizing its true potential. With the invention of
bitcoin the concept of blockchain
was introduced for the very first time, but it wasn't until 2013,
with the advent of Blockchain
2.0 that the real benefits of blockchain were realized with its
possible application in many
different industries. Since then a number of use cases of
blockchain technology in different
industries, have been proposed including but not limited to
finance, the Internet of Things,

digital rights management, government, and law. In this
chapter, four main industries
namely the Internet of Things (IoT), government, health, and
finance, have been selected
for discussion. Readers will be introduced to all these fields and
various related use cases
will be presented.
Internet of Things
The Internet of Things or IoT for short has recently gained
much traction due to its potential
for transforming business applications and everyday life. IoT
can be defined as a network of
computationally intelligent physical objects that are capable of
connecting to the Internet,
sensing real-world events or environments, reacting to those
events, collecting relevant
data, and communicating it over the Internet. This simple
definition has huge implications
and has led to exciting concepts, such as wearable's, smart
homes, smart grids, smart
connected cars, and smart cities, that are all based on this basic
concept of an IoT device.
After dissecting the definition of IoT above, there are four
functions that come to light as
being performed by an IoT device. These include sensing,
reacting, collecting, and
communicating. All these functions are performed by using
various components on the IoT
device.
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EBSCO Publishing : eBook Academic Collection (EBSCOhost)
- printed on 1/26/2020 12:56 PM via UNIVERSITY OF THE
CUMBERLANDS
AN: 1488410 ; Bashir, Imran.; Mastering Blockchain
Account: s8501869.main.eds_new
Blockchain-Outside of Currencies
[ 413 ]
Sensing is performed by sensors. Reacting or controlling is
performed by actuators,
collection is a function of various sensors, and communication
is performed by chips that
provide network connectivity. One thing to note is that all these
components are accessible
and controllable via the Internet in the IoT. An IoT device on its
own is perhaps useful to
some extent but if it is part of a larger IoT ecosystem it is more
valuable.
A typical IoT can consist of many physical objects connecting
with each other and to a
centralized cloud server. This is shown in the diagram below:

Elements of IoT are spread across multiple layers and various
reference architectures exist
that can be used to develop IoT systems. Generally, a five layer
model can be used to
describe IoT, which contains a physical object layer, device
layer, network layer, services
layer, and application layer. Each layer or level is responsible
for various functions and
includes various components. These are described in detail
below.
Physical object layer
These include any physical real-world objects includes people,
animals, cars, trees, fridges,
trains, factories, homes, and in fact anything that is required to
be monitored and controlled
can be connected to the IoT.
EBSCOhost - printed on 1/26/2020 12:56 PM via
UNIVERSITY OF THE CUMBERLANDS. All use subject to
https://www.ebsco.com/terms-of-use
[ 414 ]
Device layer
This layer contains things that make up the IoT such as sensors,
transducers, actuators,
smart phones, smart devices, and Radio Frequency
Identification tags (RFIDs). There can
be many categories of sensors such as body sensors, home
sensors, and environmental

sensors based on the type of work they perform. This is the core
of an IoT ecosystem where
various sensors are used to sense real-world environments. This
includes sensors that can
monitor temperature, humidity, liquid flow, chemicals, air,
pressure, and much more.
Usually, an Analog to Digital Converter (ADC) is required on a
device in order to turn the
real-world analog signal into a digital signal that a
microprocessor can understand.
Actuators in this layer provide the means to enable control of
external environments, for
example, starting a motor or opening a door. These components
also require digital to
analog converters in order to convert a digital signal into
analogue. This is especially
relevant when control of a mechanical component is required by
the IoT device.
Network layer
This layer is composed of various network devices that are used
to provide Internet
connectivity between devices and to the cloud or servers that
are part of the IoT ecosystem.
These devices can include gateways, routers, hubs, and
switches. This layer can include two
types of communication. First is the horizontal means of
communication, which includes
radio, Bluetooth, WiFi, Ethernet, LAN, ZigBee, and PAN and
can be used to provide a
communication between IoT devices. Second, we have
communicating to the next layer,
which is usually through the Internet and provides
communication between machines and
people or other upper layers. The first layer can optionally be

included in the device layer
as it physically is residing on the device layer where devices
can communicate with each
other at the same layer.
Management layer
This layer provides the management layer for the IoT
ecosystem. This includes platforms
that enable processing of data gathered from the IoT devices
and turn that into meaningful
insights. Also, device management, security management, and
data flow management are
included in this layer. It also manages communication between
the device and application
layers.
[ 415 ]
Application layer
This layer includes applications running on top of the IoT
network. This can include a
number of applications depending on the requirements such as
transportation, healthcare,
financial, insurance, or supply chain management. This of
course is not an exhaustive list by
any stretch of the imagination; there is a myriad of IoT
applications that can fall into this
layer:

With the availability of cheap sensors, hardware, and
bandwidth, IoT has gained popularity
in recent years and currently has applications in many different
areas including healthcare,
insurance, supply chain management, home automation,
industrial automation, and
infrastructure management. Moreover, advancements in
technology such as the availability
of IPv6, smaller and powerful processors, and better Internet
access have also played a vital
role in the popularity of IoT. The benefits of IoT range from
cost saving to enabling
businesses to make vital decisions and thus improve
performance based on the data
provided by the IoT devices. Raw data from millions of things
(IoT devices) is analyzed and
provides meaningful insights that help in making timely and
effective business decisions.
[ 416 ]
The normal IoT model is based on a centralized paradigm where
IoT devices usually
connect with a cloud infrastructure or central servers in order to
report and process the
relevant data back. This centralization poses certain
possibilities of exploitation including

hacking and data theft. Moreover, not having control of
personal data on a single,
centralized service provider also increases the possibility of
security and privacy issues.
Whilst there are methods and techniques to build a highly
secure IoT ecosystem based on
the normal IoT model there are certain much more desirable
benefits that blockchain can
bring to IoT. A blockchain-based IoT model differs from the
traditional IoT network
paradigm. According to IBM, blockchain for IoT can help to
build trust, reduce costs, and
accelerate transactions. Additionally, decentralization, which is
at the very core of
blockchain technology, can eliminate single points of failure in
an IoT network. For
example, a central server perhaps is not able to cope with the
amount of data that billions of
IoT devices (things) are producing at high frequency. Also the
peer-to-peer communication
model provided by blockchain can help to reduce costs because
there is no need to build
high-cost centralized data centres or implementation of complex
public key infrastructure
for security. Devices can communicate with each other directly
or via routers.
As an estimate from various researchers and companies, by
2020 there will be roughly 22
billion devices connected to the Internet. With this explosion of
billions of devices
connecting to the Internet, it is hard to imagine that centralized
infrastructures will be able
to cope with the high demands of bandwidth, services, and
availability without incurring
excessive expenditure. Blockchain-based IoT will be able to

solve scalability, privacy, and
reliability issues in the current IoT model.
Blockchain enables things to communicate and transact with
each other directly and with
the availability of smart contracts negotiation and financial
transactions can also occur
directly between the devices instead of requiring a middleman,
authority, or human
intervention. For example, if a room in a hotel is vacant, it can
rent itself out, negotiate the
rent, and can open the door lock for a human who has paid the
right amount of funds.
Another example could be that if a washing machine runs out of
detergent, it could order it
online after finding the best price and value based on the logic
programmed in its smart
contract.
[ 417 ]
The above mentioned five-layer IoT model can be adapted to a
blockchain-based model by
adding a blockchain layer on top of the network layer. This
layer will run smart contracts,
and provide security, privacy, integrity, autonomy, scalability,
and decentralization services
to the IoT ecosystem. The management layer in this case can

consist of only software related
to analytics and processing, and security and control can be
moved to the blockchain layer.
This can be visualized in the following diagram:
In this model, other layers would perhaps remain the same but
an additional blockchain
layer will be introduced as a middleware between all
participants of the IoT network.
It can also be visualized as a peer-to-peer IoT network after
abstracting away all the layers
mentioned above. This is shown in the following diagram where
all devices are
communicating and negotiating with each other without a
central command and control
entity:
[ 418 ]
It can also result in cost saving which is due to easier device
management by using a
blockchain based decentralised approach. The IoT network can
be optimized for
performance by using blockchain. In this case there will be no
need to store IoT data
centrally for millions of devices because storage and processing
requirements can be

distributed to all IoT devices on the blockchain. This can result
in completely removing the
need for large data centres for processing and storing the IoT
data.
Blockchain-based IoT can also thwart denial of service attacks
where hackers can target a
centralized server or data centre more easily but with
blockchain's distributed and
decentralized nature, such attacks are no longer possible.
Additionally, if as estimated there
will be billions of devices connected to the Internet in the near
future, it will become almost
impossible to manage security and updates of all those devices
from traditional centrally-
owned servers. Blockchain can provide a solution to this
problem by allowing devices to
communicate with each other directly in a secure manner and
even request firmware and
security updates from each other. On a blockchain network
these communications can be
recorded immutably and securely which will provide
auditability, integrity, and
transparency to the system. This is not possible with traditional
P2P systems.
[ 419 ]

In summary, there are clear benefits that can be reaped with the
convergence of IoT and
blockchain and a lot of research and work in academia and
industry are already in progress.
There are various projects already proposed providing
blockchain-based IoT solutions. For
example, IBM Blue Horizon and IBM Bluemix are IoT
platforms supporting blockchain IoT
platforms. Various start-ups such as Filament have already
proposed novel ideas on how to
build a decentralised network that enables devices on IoT to
transact with each other
directly and autonomously driven by smart contracts.
In the following section, a practical example is provided on how
to build a simple IoT
device and connect it to the Ethereum blockchain. This IoT
device is connected to the
Ethereum blockchain and is used to open a door (in this case the
door lock is represented by
an LED) when the appropriate amount of funds are sent by a
user on the blockchain. This is
a simple example and requires a more rigorously-tested version
in order to implement it in
production but it demonstrates how an IoT device can be
connected, controlled, and
responded to in response to certain events on an Ethereum
blockchain.
IoT blockchain experiment
This example makes use of a Raspberry device which is a Single
Board Computer (SBC).
Raspberry Pi is a single-board computer developed as a low cost
computer to promote
computer education but has also gained much more popularity
as a tool of choice for

building IoT platforms. A Raspberry Pi 3 model B is shown in
the following figure:
[ 420 ]
In the following section, an example will be discussed where a
Raspberry Pi will be used as
an IoT device connected to the Ethereum blockchain and will
perform an action in response
to a smart contract invocation.
First, the Raspberry Pi needs to be set up. This can be done by
using NOOBS which
provides an easy method of installing Raspbian or any other
operating system. This can be
downloaded and installed from the link .
Alternatively, only Raspbian can be installed from the link
. Another alternative available at
can also be used to install a
minimal non-GUI version of Raspbian OS. For the purpose of
the example, NOOBS has
been used to install Raspbian, as such the rest of the exercise
assumes Raspbian is installed
on the SD memory card of the Raspberry Pi.
Once the Raspbian operating system is installed, the next step is

to download the
appropriate binary for the Raspberry Pi ARM platform. The
platform can be
confirmed by running the following command in a terminal
window in Raspberry Pi
Raspbian operating system. The command output shows that
which architecture the
operating system is running on. In this case it is , therefore
ARM-compatible binary
for will be downloaded.
The following steps are described in detail:
download:, note that in the example below a specific version is
downloaded1.
however other versions are available which can be downloaded
from
.
wget https://gethstore.blob.core.windows.net/builds/geth-linux-
arm7-1.5.6-2a609af5.tar.gz
Unzip and extract into a directory, the directory named 2.
will be created automatically with that tar command
next:
tar -zxvf geth-linux-arm7-1.5.6-2a609af5.tar

[ 421 ]
This will create a directory named and will extract
binary and related files into that directory. binary can be
copied into
or the appropriate path on Raspbian to make it available from
anywhere in the operating
system. When the download is finished, the next step is to
create the genesis block.
The same genesis block needs to be used that was created
previously in ,
Ethereum Development. The genesis file can be copied from the
other node on the network.
This is shown in the following screenshot. Alternatively, an
entirely new genesis block can
be generated. This was discussed in detail in , Ethereum
Development.
Once the file is copied onto the Raspberry Pi, the following
command can
be run in order to generate the genesis block. It is important
that exactly the same genesis
block is used that was generated previously otherwise the nodes
will effectively be running
on separate networks:
$ ./geth init genesis.json
This will show the output similar to the one shown in the
following screenshot:

[ 422 ]
After genesis block creation, there is a need to add peers to the
network. This can be
achieved by creating a file named , which contains the enode ID
of the
peer that geth on the Raspberry Pi will connect to for synching.
This information can be obtained from the geth JavaScript
console by running the following
shown command, this command should be run on the peer to
which Raspberry is going to
connect:
> Admin.nodeInfo
This will show the output similar to the one shown in the
following screenshot:
After this step, further instructions presented below can be
followed in order to connect
Raspberry Pi to the other node on the private network. In the
example, the Raspberry Pi
will be connected to the network ID 786 created in , Ethereum
Development. The
key is to use the same genesis file created previously and
different port numbers. Different
ports are not a strict requirement however. If the two nodes are
running under a private

network and access from an environment external to the
network is required then a
combination of DMZ/router and port forwarding will be used.
Therefore it is recommended
to use different TCP ports to allow port forwarding to work
correctly. The identity switch,
which hasn't been introduced previously, in the following
command allows for an
identifying name to be specified for the node.
[ 423 ]
First node setup
First, needs to be started on the first node using the following
command:
$ geth --datadir .ethereum/privatenet/ --networkid 786 --
maxpeers 5 --rpc -
-rpcapi web3,eth,debug,personal,net --rpcport 9001 --
rpccorsdomain "*" --
port 30301 --identity "drequinox"
Once is started up it should be kept running and another
instance should be
started from the Raspberry Pi node.
Raspberry Pi node setup
On Raspberry Pi, the following command is required to be run

in order to start and
sync it with other nodes (in this case only one node). The
following is the command:
$ ./geth --networkid 786 --maxpeers 5 --rpc --rpcapi
web3,eth,debug,personal,net --rpccorsdomain "*" --port 30302
--identity
"raspberry"
This should produce the output similar to the one shown in the
following screenshot. When
the output contains the row displaying Block synchronization
started it means that the
node has connected successfully to its peer.
[ 424 ]
This can be further verified by running commands in the
console on both nodes as
shown in the following screenshot. can be attached by simply
running the command
on the Raspberry Pi:
$ geth attach
Similarly can be attached to by running the command below on
the first node:

$ geth attach ipc:.ethereum/privatenet/geth.ipc
[ 425 ]
Once the console is available can be run to reveal the details
about other
connected nodes as shown in the following screenshot:
Once both nodes are up-and-running further prerequisites can be
installed in order to set
up the experiment. Installation of Node.js and the relevant
JavaScript libraries is required.
The required libraries and dependencies are listed below. First
Node.js and npm need to be
updated on the Raspberry Pi Raspbian operating system. For
this the following steps can be
followed:
Install latest Node.js on the Raspberry Pi using the following
command:1.
$ curl -sL https://deb.nodesource.com/setup_7.x | sudo -E bash
-
This should display output similar to the following. The output
is quite large therefore only
the top part of the output is shown in the following screenshot:

Run the update via :2.
$ sudo apt-get install nodejs
[ 426 ]
Verification can be performed by running the following
command to ensure that the correct
versions of Node.js and are installed, as shown in the following
screenshot below:
It should be noted that these version are not a necessity; any
latest version of and
will work. The examples in this chapter makes use of npm 4.0.5
and node v7.4.0.
Install Ethereum web3 npm, which is required to enable
JavaScript code to access3.
the blockchain:
Similarly, can be installed, which is required in order to4.
communicate with the Raspberry Pi and control GPIO:
When all prerequisites are installed, hardware setup can be
performed. For this purpose a
simple circuit is built using a breadboard and a few electronic
components.

[ 427 ]
These components are listed as follows:
LED: The abbreviation of Light Emitting Diode, this can be
used as visual1.
indication for an event.
Resistor: A 330 ohm component is required which provides
resistance to passing2.
current based on its rating. It is not necessary to understand the
theory behind it
for this experiment; any standard electronics engineering text
covers all these
topics in detail.
Breadboard: This provides a means of building an electronic
circuit without3.
requiring soldering.
T-Shaped cobbler: This is inserted on the breadboard as shown
in the figure 4.
below and provides a labeled view of all GPIO (General
Purpose I/O) pins for
the Raspberry Pi.
Ribbon cable connector: This is simply used to provide
connectivity between the5.
Raspberry Pi and the breadboard via GPIO. All these
components are shown in
the following image:

[ 428 ]
Circuit
As shown in the following image, the positive leg (long leg) of
the LED is connected to pin
number 21 of the GPIO and the negative (short leg) is connected
to the resistor, which is
then connected to the ground (GND) pin of the GPIO. Once the
connections are set up the
ribbon cable can be used to simply connect to the GPIO
connector on the Raspberry Pi.
Once the connections are set up correctly and the Raspberry Pi
has been updated with the
appropriate libraries and geth, the next step is to develop a
simple smart contract that
expects a value. If the value provided to it is not what it expects
it does not trigger an event;
otherwise, if the value passed matches the correct value, the
event triggers which can be
read by the client JavaScript programme running via Node.js.
Of course, the solidity
contract can be very complex and can also deal with the ether
sent to it and if the amount of
ether is equal to the required amount then the event can trigger;
but in this example the aim
is to demonstrate the usage of smart contracts to trigger events
that can then be read by

JavaScript programmes running on Node.js, which then in turn
can trigger actions on IoT
devices using various libraries.
The smart contract source code is shown as follows:
[ 429 ]
The solidity online compiler can be used to run and test this
contract. The Application
Binary Interface (ABI) required for interacting with the contract
is also available in the
Interface field as shown in the following screenshot:
There are two methods by which Raspberry node can connect to
the private blockchain via
the web3 interface. The first is where the raspberry device is
running its own geth and
maintains its own ledger but with resource-constrained devices
it is not possible to run a
full node, or even a light node in a few circumstances. In that
case, the web3 provider
can be initialized to connect to the appropriate RPC channel.
This will be shown later in the
client JavaScript Node.js programme. A comparison of both of
these approaches is shown in
the following diagram:

[ 430 ]
There are obvious security concerns which arise from exposing
RPC interfaces publicly,
therefore it is recommended that this option is used only on
private networks and if
required to be used on public networks appropriate security
measures are put in place, such
as allowing only the known IP addresses to connect to the geth
RPC interface. This can be
achieved by a combination of disabling peer discovery
mechanisms and HTTP-RPC server
listening interfaces. More information about this can be found
in geth help. The traditional
network security measures such as firewalls, Transport Layer
Security (TLS) and
certificates can also be used, but have not been discussed in this
example.
[ 431 ]

Now Truffle can be used to deploy the contract on the private
network ID 786 to which at
this point the Raspberry Pi is connected. A truffle deploy can be
performed simply by using
the following shown command; it is assumed that and other
preliminaries
discussed in , Ethereum Development have already been
performed:
$ truffle migrate
It should produce the output similar to the following screenshot:
Once the contract is deployed correctly, JavaScript code can be
developed that will connect
to the blockchain via web3, listen for the events from the smart
contract in the blockchain,
and turn the LED on via the Raspberry Pi. The JavaScript code
is shown as follows:
[ 432 ]
Note that in the example above the contract address
is specific to the deployment and it
will be different when readers run this example. Simply change
the address in the file to

what the readers see after deploying the contract. This
JavaScript code can be placed in a file
on the Raspberry PI, for example, . It can be run by using the
following
command:
$ sudo nodejs index.js
This will start the programme, which will run on Node.js and
listen for events from the
smart contract. Once the program is running correctly, the smart
contract can be invoked by
using the Truffle console as shown in the following screenshot.
In this case the function is called with parameter 10, which is
the expected value.
[ 433 ]
After the contract is mined, will be triggered, which will turn
the LED on. In
this example it is a simple LED but it can be any physical
device such as a room lock that
can be controlled via an actuator. If all works well, the LED
will be turned on as a result of
the smart contract function invocation as shown in the following
image:

As demonstrated in the preceding example, a private network of
IoT devices can be built
that runs a geth client on each of the nodes and can listen for
events from smart contracts
and trigger an action accordingly. The example shown is simple
on purpose but
demonstrates the underlying principles of an Ethereum network
that can be built using IoT
devices along with smart contract-driven control of the physical
devices.
In the next section, other applications of the blockchain
technology in government, finance,
and health will …
Third World QuarTerly, 2017
Vol. 38, No. 8, 1710–1732
https://doi.org/10.1080/01436597.2017.1298438
Will blockchain emerge as a tool to break the poverty chain in
the Global South?
Nir Kshetri
Bryan School of Business and economics, The university of
North Carolina at Greensboro, Greensboro, NC, uSa
ABSTRACT
Just like its recent predecessors, blockchain – also known as the
distributed ledger technology – is considered to have the
potential
to cause major economic, political and social transformations in
the
Global South. The visible effects of this technology are already

being
noted there. We present early evidence linking the use of
blockchain in
overcoming some economic, social and political challenges
facing the
Global South. The article highlights the key applications and
uses of
blockchain in developing countries. It demonstrates how
blockchain
can help promote transparency, build trust and reputation, and
enhance efficiency in transactions. The article looks at
opportunities
and key triggers for blockchain diffusion in these countries. It
also
delves into challenges and obstacles that developing economies
are
likely to encounter in the use of blockchain.
Introduction
Just like its recent predecessors such as cloud computing1 and
the Internet of Things (IoT),2
blockchain – also known as the distributed ledger technology –
is considered to have the
potential to cause major economic, political and social
transformations in the Global South
(GS). Some have touted blockchain as the biggest innovation in
computer science.3 Others
consider this technology to be ‘the biggest disruptor to
industries since the introduction of
the Internet’.4 The World Economic Forum (WEF) considers
blockchain to be among six com-
puting ‘mega-trends’ that are likely to shape the world in the
next decade.5
A blockchain can be viewed as a data structure which makes it

possible to create a tam-
per-proof digital ledger of transactions and share them.
Cryptography allows anyone access
to add to the ledger securely. There is no central authority or a
middleman such as a bank
or financial institution.6 It is impossible or extremely difficult
to change or remove data blocks
recorded on the ledger.7 Due to these features, blockchain can
arguably make it possible to
reduce or eliminate integrity violations such as fraud and
corruption, and reduce transaction
costs.
According to the WEF, 10% of the global gross domestic
product (GDP) will be stored on
blockchain by 2027,8 compared to 0.025% in 2016.9 While
most discussion of blockchain
© 2017 Southseries inc., www.thirdworldquarterly.com
KEYWORDS
Blockchain
corruption
land registry
microinsurance
smart contract
transparency
ARTICLE HISTORY
received 5 September 2016
accepted 20 February 2017
CONTACT Nir Kshetri [email protected]
mailto: [email protected]
http://www.tandfonline.com

http://crossmark.crossref.org/dialog/?doi=10.1080/01436597.20
17.1298438&domain=pdf
THIRD WORLD QUARTERLY 1711
focuses on bitcoin, this paper addresses additional, potentially
more important, influences
of this technology in the GS.
Blockchain affects economic, social and political outcomes in
the GS by many direct and
indirect pathways. As noted above, the first of blockchain’s
direct benefits is potential reduc-
tion of corruption and fraud. For instance, blockchain can
empower donors. It can ensure
that donations reach the intended recipients. To give an
example, donors can buy electricity
for a South African School using bitcoin. A blockchain-enabled
smart meter makes it possible
to send money directly to the meter. There are no organisations
involved to re-distribute
funds. Donors can also track electricity being consumed by the
school and calculate the
power their donations can buy.10 This programme was launched
by South African bitcoin
startup Bankymoon via the crowdfunding platform Usizo. It
allows African public schools to
use blockchain to crowdsource utility credits.11
Increase in efficiency and reduction in transaction costs
constitute a second kind of ben-
efit. There is no third party or central body involved. That is,
blockchain transactions are
conducted by the concerned parties themselves. There are
already some signs of block-

chain-led disintermediation in international remittances and
international trade finances.
In September 2016, the Chinese government announced that
blockchain will be used in its
social security system in order to lower transactions costs. In
2015, China’s National Council
for Social Security Fund managed US$285 billion.12
To be sure, blockchain is in its infancy. Some compare the
current level of development
to ‘the World Wide Web in the early 1990s’.13 Nonetheless,
multinationals, local companies
and policymakers have devoted considerable attention to
blockchain. The renowned
Peruvian economist Hernando de Soto, who is well known for
his work on informal and
unofficial economy, is involved in the development of a
blockchain-based platform for prop-
erty records in the Republic of Georgia.
Major global technology companies and software vendors such
as IBM and Microsoft
have extended their offerings to incorporate numerous services
around blockchain. For
instance, in September 2016, IBM announced an internal re-
organisation to build blockchain
capability. A new unit called Watson Financial Services
integrates Watson, cloud, and block-
chain-related offerings and strategy.14 IBM also created new
roles specifically devoted to
blockchain. These companies’ blockchain-related offerings are
available in the GS. IBM’s India
research labs are involved in some of IBM’s blockchain-related
work.15 GS-based firms are
also susceptible to pressure to adopt blockchain from their
business partners and other

value-delivery network members from the industrialised world.
We present early evidence linking blockchain use to overcoming
economic, social and
political challenges facing the GS. The paper is structured as
follows. We proceed by first
providing a literature review of key challenges in GS
economies. Next, we look at blockchain’s
applications and uses to overcome these challenges. Then, we
examine the opportunities
and key triggers for blockchain diffusion. The section following
this looks at the challenges
and obstacles. It is followed by a section on discussion and
implications. The final section
provides concluding comments.
Literature review: key challenges facing the GS
Causes of economic prosperity and poverty
There are many and varied sources of underdevelopment, which
include colonialism
(Howard, 1978) dependence on commodities,16ethnic tension
and political violence.17 In
1712 N. KSHETRI
this paper, we focus on institutional environments. Poor
countries mostly lack good institu-
tions that ensure strict enforcement of property rights, have the
ability to deal with corrupt
practices effectively, and provide equal opportunity to all
members of society.18

The lack and poor enforcement of property rights
According to a 2011 report of the United Nations (UN) Food
and Agriculture Organization
(FAO) and Transparency International, in over 61 countries,
weak governance led to corrup-
tion in land occupancy and administration. Corruption varied
from small-scale bribes to the
abuse of government power at the national, state and local
levels.19
Enforcement of property rights increases incentives to invest
and provides resources to
get out of the poverty trap. Clear property rights would allow
entrepreneurs to use the assets
as collateral and thus increase their access to capital. A large
proportion of poor people in
the GS lack property rights. For instance, about 90% of land is
undocumented or unregistered
in rural Africa. Likewise, the lack of land ownership remains
among the most important
barriers to entrepreneurship and economic development in
India.20 One estimate suggested
that over 20 million rural families in India did not own land and
millions more lacked legal
ownership to the lands they built houses on, lived on and
worked.21 Indeed, landlessness is
arguably a more powerful predictor of poverty in India than
caste or illiteracy.22
Disregard and lack of respect of the rule of law
In some GS economies, the rule of law is disregarded and not
respected by corrupt politicians,
government officials and other powerful groups. These groups
sometimes expropriate the
incomes and investments of poor people or create an uneven
playing field.

Less opportunity for disadvantaged groups
Economically and socially disadvantaged groups have less
opportunity to access finance,
credit, insurance, education and other things. These groups thus
cannot make investments
and participate in productive economic activities. Consider for
instance, insurance. In India,
86% of the rural population and 82% of the urban population
lacks health insurance.23
Regarding access to finance, in China, small and medium-sized
enterprises (SMEs) account
for 70% of GDP but have access to 20% of financial
resources.24 Eighty-nine percent of SMEs
in the country face difficulty in satisfying banks’ requirements
to get loans.25 Small borrowers
often lack sufficient collateral required by most traditional
banks.26
Unavailability of financing is a more critical barrier faced by
most entrepreneurs. For
instance, despite high interest rates, demand for credit exists in
most GS economies. Banks in
the Democratic Republic of Congo (DRC) reject over one-third
of credit and loan applications.
The fact that they cannot enforce their legal rights as lenders
has led to the risk-averse behav-
iour of the banking industry. This situation is a manifestation of
a broader structural problem
in the GS, such as the DRC in which a large proportion of the
population lacks access to formal
banking institutions.27 The situation is not much different in
other GS economies. For instance,
in Africa, only 20% have bank accounts – 10% in Kenya, 5% in
Tanzania and 15% in Liberia.28

Barriers related to measurement, implementation, enforcement
and
transaction costs
A related point is that poor-quality institutions lead to
transaction cost-related barriers. To
make this statement meaningful requires a more detailed
discussion of what is meant by
transaction costs. In the context of business transactions
involving two or more parties, for
Douglas North, ‘transaction costs are … two things: (1) the
costs of measuring the dimensions
of whatever it is that is being produced or exchanged and (2)
the costs of enforcement’.29
He goes on to say that ‘a lot of what we need to do is to try to
measure the dimensions of
what we are talking about in such a way that we can define them
precisely’.30
Many GS economies are faced with challenges in enforcing
commercial contracts, social
and economic rights, laws and regulations (eg agro-
environmental), and standards (eg pol-
lution-related). Put differently, these economies are
characterised by the lack of effective
enforcement mechanisms. Emphasising the importance of
measurements in enforcement,
North argues: ‘Without being able to measure accurately
whatever it is you are trying to
enforce, there cannot be effective enforcement, even as a

possibility’.31 The technology avail-
able is among the important factors that affect the costs of
measurement and enforcement
and hence the transaction costs.32 In this regard, blockchain can
make up for the lack of
relevant institutions or the problems associated with high
transaction costs.
Enforcement can be implemented at three levels: first party,
second party and third
party.33 It is suggested that third-party enforcement
mechanisms, which are often formal
coercive enforcement measures by the state, have been
relatively ineffective in the GS.34
Blockchain has the potential to strengthen the governments’
enforcement powers and sanc-
tions against individuals or organisations that breach
regulations.
Key blockchain applications to overcome challenges facing the
Global South
Some of the key current applications and future prospects of
blockchain are presented in
Table 1. As is clear from the table, various barriers and
challenges faced by the GS can be
addressed through blockchain. In parentheses, we indicate how
the use cases have the
potential to address various causes of poverty by strengthening
the rule of law (SRL), helping
to enforce property rights (EPR) and creating opportunity for
disadvantaged groups (ODR).
Promoting transparency and reducing fraud and corruption
Blockchain can help achieve transparency in various settings. In

mid-2016, Ant Financial,
Alibaba’s online payments affiliate, announced the launch of
blockchain technology for
payments. Blockchain was first applied to Alipay’s donation
platform. Donors on its ‘Ant Love’
charity platform can track transaction histories, and understand
where their funds go and
how they are used.35 The goal is to increase transparency and
provide a trust mechanism by
recording each payment and spending of donations on the
blockchain.
The use of fake export invoices to disguise cross-border capital
flows has been pervasive
in China. Since China has maintained strict capital control
regimes, some importers and
exporters falsify trade transactions in order to move capital in
and out of the country. Many
banks do not check the authenticity of trade documents.36
During April to September of
2014, China found US$10 billion worth of fake trade
transactions.37 Some major fraud cases
were in Qingdao, the world’s seventh-busiest port. Some firms
had used fake receipts to
secure multiple loans against a single cargo of metal.38
The Qingdao frauds involved 300,000 tons of alumina, 20,000
tons of copper and 80,000
tons of aluminium ingots.39 Due to the scandals, Chinese banks
charge higher interest rates
1714 N. KSHETRI
Table 1. Blockchain in the Global South: some applications

currently in use or being developed.
aSee note 12.
bSee note 11.
cSee note 41.
dSee note 44.
eredherring.com “Georgia Pilots and Sweden Ponders.”
fSee note 50.
gSee note 54.
hSee note 55
iSee note 59
jSee note 62.
kSee note 63, 64.
lSee note 65.
mSee note 75, 76.
nSee note 60.
oSee note 78.
pMaiya “Benefit with Blockchain.”
ePr: helping to enforce property rights, odr: creating
opportunity for disadvantaged groups, Srl: strengthening the
rule
of law.
Blockchain use Explanation and examples
Promoting transparency and reducing fraud and corruption
alipay’s donation platform (odr)a
South africa’s Bankymoon allows public schools in africa
to use blockchain to crowdsource utility credits (odr)b
Standard Chartered and dBS Group’s blockchain-based
platform detects falsification and frauds in trade
transactions (Srl)c
ukraine’s blockchain-based eauction platform (Srl, ePr)d

a Peruvian political party, Peru Possible, told voters that it
would use blockchain to fight corruptione (Srl).
reducing friction and costs of property registration honduran
government’s plan to transfer land registry
onto a blockchain-enforced digital database (ePr)f
Bitland’s blockchain-based land registry system based in
Ghana (ePr)g
BitFury and the Georgian government’s agreement to
develop a system for registering land titles using
blockchain (ePr)h
Promoting efficiency in international B2B trade and
increasing access to trade and supply chain finance
Skuchain’s blockchain-based products for B2B trade and
supply chain finance (odr)i
reducing costs and increasing efficiency in international
payment systems
Bitspark’s bitcoin remittance from hong Kong to GS
economies (odr)j
Bitsoko uses bitcoin for money transfer, remittance
services and payment processing in Ghana, Zimbabwe,
uganda, Sierra leone and rwanda (odr)k
Mexico’s mexBT uses blockchain for cross-border
payments among firms in emerging economies (odr)l
Circle aims to focus on the Chinese international P2P
payments market (odr)m

insurance and risk management Mexican mobile payments
platform Saldo.mx has
launched a microinsurance service (odr)n
China’s insurance company Ping an joined a global
consortium of financial institutions to explore
blockchain use (odr)o
Banking india’s central bank, the reserve Bank, was reported to
be
considering the use of blockchain to reduce cheque
counterfeiting. digitised cheques are expected to
reduce paper use and the risk of theft and fraudp (Srl).
and have a lower tendency for collateral financing.40
Blockchain arguably can stop scandals
such as those in Qingdao.
Recent high-profile fraud has increased blockchain’s
attractiveness. The British multina-
tional banking and financial services company, Standard
Chartered, lost about US$200 mil-
lion from Qingdao fraud. Standard Chartered has teamed up
with DBS Group and Singapore’s
Infocomm Development Authority to develop a blockchain-
based platform.41 Other players
such as Bank of America and HSBC are also exploring
blockchain for trade finance and other
applications.42
In November 2015, Bitcoin Foundation Ukraine and KUNA

Bitcoin Agency signed an mem-
orandum of understanding (MoU) with Ukraine’s Kyiv
Regional State Administration to
implement a blockchain project to set up an e-governance
system in the port city of Odessa.
It was announced that the first project would be a government
real estate auction. The goal
is to ensure a fair, transparent auction and eliminate the chance
of document forgery.
Subsequent application areas are expected to be in various
public services such as personal
identification, public records and banking.43
In February 2016, Ukrainian technology innovation group
Distributed Lab implemented
an eAuction platform, which is among the largest and most
important public blockchain
initiatives in the country. Two banks – Oschadbank and
PrivatBank – participated in the
project.44 Blockchain is connected to the banks’ infrastructures.
When someone bids, the
payment goes to the seller’s account. The bank produces a
signed receipt for the transaction,
which is added to the blockchain as a proof that money was
sent.45
Reducing friction and costs of property registration
Blockchain can reduce friction and conflict as well as costs of
property registration. Regarding
the costs, it is possible to do most or all of the process
including the use of a notary service
using smart phones.46
In mid-2015, the US-based startup Factom and the Honduran
government reportedly

reached an agreement to transfer land registry in Honduras into
a blockchain-enforced
digital database. The goal is to create a land title-keeping
system that is reliable and trans-
parent. According to the United States Agency for International
Development (USAID), only
14% of Hondurans legally hold their properties. Among those
properties that are occupied
legally, only 30% are registered.47 It is not uncommon for
government officials to alter titles
of registered properties. In some case, government officials
allocate properties with altered
titles to themselves. The country’s bureaucrats reportedly
altered titles and registered beach-
front properties for themselves.48 They also allegedly accepted
bribes in exchange for prop-
erty titles. Citizens often lack access to records, and records
that are accessible provide
conflicting information. Property owners are often unable to
defend themselves against
infringement of property use or mineral rights.49
However, sufficient progress has not been made in the
Honduran government’s plan to
transfer land registry to blockchain. It was reported in
December 2015 that the project had
‘stalled’ due to political issues.50
The US-based platform for real estate registration Bitland
announced the introduction of
a blockchain-based land registry system in Ghana, where 78%
of land is unregistered.51 There
is a long backlog of land-dispute cases in Ghanaian courts.52
About 90% of land is

1716 N. KSHETRI
undocumented or unregistered in rural Africa. Bitland records
transactions securely with
global positioning system (GPS) coordinates, written
description and satellite photos. The
process is expected to guarantee property rights and reduce
corrupt practices. As of mid-
2016, 24 communities in Ghana had expressed interest in the
project.53 Bitland is planning
to expand to Nigeria in 2017 in collaboration with the
Organization of Petroleum Exporting
Countries (OPEC) Fund for International Development
(OFID).54
Bitcoin company BitFury and the Georgian government signed a
deal to develop a
system for registering land titles using the blockchain.55 As
noted above, the Peruvian
economist Hernando de Soto will assist in the development of
the platform. In order to
buy or sell land in Georgia, currently the buyer and the seller go
to a public registry house.
They are required to pay US$50–200, which depends on the
speed with which they want
the transaction to be notarised. The pilot project will move this
process onto the block-
chain. The costs for the buyer and the seller are expected to be
in the range of US$0.05–0.10
range.56
Promoting efficiency in international business to business
(B2B) trade and
increasing access to trade and supply chain finance

The global trade finance market, which is valued at US$18
trillion, is likely to be transformed
by the blockchain by disintermediation and other efficiency
measures. First, the global trade
finance market relies on paper documentation for most
processes. Paper-based methods
such as letter of credit (LoC) and factoring account for about
US$5 trillion of annual trade
worldwide.57 It costs 1–3% of the trade’s value to buy an LoC.
The LoC involves mailing of
physical documents and verification.
Factors are key intermediary players in the global trade finance
market. They offer money
to exporter. Based on the promised future payments, exporters
borrow from factors.
Exporting firms make an outright sale of accounts receivable to
factors in order to maintain
liquidity. For instance, a Chinese exporter selling to Walmart
can take invoice for those goods
to a factor, which can pay the exporter right away. For a
US$100 invoice, the factor may pay
as little as US$90. The upshot is that buyers such as Walmart
pay more for goods they buy
from GS-based sellers. The global factoring market is estimated
at over US$2 trillion
annually.58
Venture capital (VC)-funded startups such as Skuchain are
creating blockchain-based
products to address inefficiencies in B2B trade and supply chain
finance.59 The products are
expected to eliminate the roles of intermediaries and financiers.
Buyers and sellers agree on
the terms of a deal. Blockchain can track and manage the
transaction from start to finish.

Reducing costs and increasing efficiency in international
payment systems
The transaction costs on remittances, especially small
remittances, are very high. Immigrants
use transfer services such as Western Union, which cost as
much as 7% of the transfer
amount.60 In order to transfer 300 Rand from South Africa to
neighbouring countries, transfer
fees varied from 35 to 68.2 Rand by bank draft to 19.2 to 62.5
Rand by electronic transfer,
25.3 Rand by Moneygram and 6.2 Rand by iKobo’s services.61
Bitspark, the bitcoin remittance in Hong Kong, was reported to
charge a flat HK$15 (about
US$1.90) for remittances of less than HK$1200, and 1% above
that amount. For instance,
when remittances are sent to the Philippines, Bitspark’s local
partner, Rebit, converts bitcoin
into pesos for receivers.62
Bitcoin startup Bitsoko, which as of July 2016 had a presence in
Ghana, Zimbabwe,
Uganda, Sierra Leone and Rwanda, uses bitcoins for money
transfer, remittance services and
payment processing. It charges customers a fraction of the
current rates.63
In mid-2015, Banco Santander launched a trial version of a
blockchain-based app that

can be used to transfer £10–10,000 (US$13.20–1,320) in euros
to 21 countries, and dollars
to the US.64
Mexico’s mexBT uses blockchain for cross-border payments
among GS-based firms. The
company hopes that by lowering rates, payments and transfers
of remittances can be made
easier. mexBT launched the platform Pay.meXBT for
international payment, mainly between
Latin America and Asia. Pay.meXBT uses bitcoin and
blockchain to facilitate cross-border
payments. The platform allows payments in local currencies.
The system is also expected to
speed up payment processes.65
Insurance and risk management
Blockchain may provide risk managers with an effective way to
protect individuals and
companies from uncertain loss or catastrophe. Insurance and
derivatives can be used as a
tool to control or minimise the risk factors associated with
unpredictable or uncontrollable
events. By supporting decentralised insurance models,
blockchain may make derivatives
more transparent. A meaningful risk management process can be
designed using reputa-
tional systems based on peoples’ social and economic capital
and online behaviour.66
Blockchain-based insurance is connected to big data, the IoT
and health trackers to ensure
better pricing and risk assessment.67
The IoT makes it easier for cars, electronic devices or home
appliances to have their own

insurance policies. Using blockchain, they can be registered,
and their insurance policies are
administered by smart contracts. Damages are automatically
detected, which trigger the
repair process, claims and payments.68 Payouts are made
against the insurable event and
the policyholder does not have to a make a claim. The insurer
does not need to administer
claims. The costs of claims processing are thus close to zero.
Even more importantly, there
is less likelihood of fraud.69
To take an example, Mexican mobile payments platform
Saldo.mx has launched a micro-
insurance service, Consuelo, which allows users to buy
blockchain-powered health and life
insurance policies. The target groups are Mexicans living in the
country as well as
diaspora.70
Identity management has been a big issue. In financial
institutions such as the insurance
industry, the ability to prove someone is who he/she says online
is very important in order
to increase the accuracy of risk assessments and reduce fraud.71
In this regard, the Delaware,
USA-based blockchain startup Tradle is developing solutions
for know-your-customer (KYC)
data. A customer can grant access to identity data to companies
such as Tradle for a contract
closure. After verifying the KYC profile, a customer can
forward the identity data to other
companies for different contracts. There is no need to repeat the
identification and
verification process for each transaction, which speeds up the
process and increases

efficiency.72
1718 N. KSHETRI
Opportunities and key triggers for blockchain diffusion
Among the main triggers of blockchain diffusion is a rapid rise
in investment in this tech-
nology. VC-backed investments in blockchain totalled US$3
million in two deals in 2011,
which increased to 74 deals and US$474 million in 2015.73 An
estimate by Virtual Capital
Ventures suggested that VC investments in blockchain-related
startups would exceed US$2.5
billion by 2016.74
Blockchain investment is increasing in the GS. The Chinese
search engine Baidu invested
in the US blockchain company Circle. Circle China announced a
plan to enter the Chinese
peer-to-peer (P2P) payment market with bitcoin with the
partnership of Goldman Sachs and
Barclays.75 Circle specifically aims to focus on the Chinese
international P2P payments
market.76
Chinese firms have launched major initiatives to develop the
blockchain industry and
market. Thirty-one technology and financial firms including the
financial services firm Ping
An Bank and Tencent formed a blockchain consortium, which
focuses on capital markets
technology, securities exchange, trading platforms, life
insurance and banking.77

GS-based firms are also participating in strategic agreements
such as global consortia
built around blockchain, which can facilitate the sharing of
technology and resources. China’s
second-biggest insurance company, Ping An, joined a global
consortium of financial insti-
tutions led by the FinTech firm R3.78 In September 2016, China
Merchants Bank joined R3.79
R3’s consortium includes members from Asia, Europe and North
America, such as Morgan
Stanley, HSBC, UBS, Credit Suisse, Barclays, Societe Generale
and Commerzbank. These mem-
bers are working with R3 to use blockchain for a wide range of
applications. In July 2016,
Barclays Africa also joined R3.
In some GS economies, there is a strong horizontal linkage
providing supports for block-
chain diffusion. For instance, China is the world’s biggest
bitcoin market, with an estimated
800,000 bitcoin users in 2016.80 Some argue that blockchain
may allow China’s banking
system to leapfrog the west.
Industrialised world-based blockchain companies are also
making inroads to the GS. For
instance, the public blockchain-based distributed computing
platform Ethereum, which
features smart contract functionality, has a presence in many GS
economies. The Chinese
online insurance company Zhong An announced a partnership
with Ethereum to use the
platform in smart contracts.81 …

Analysing the Impact of Blockchain Technology
in India’s Digital Economy
– Jeevan John Varghese*
Student, G L BAJAJ Institute of Management and Research
[email protected] https://orcid.org/0000-0002-5166-8890
– Devashish Sharma
Student, G L BAJAJ Institute of Management and Research
– Nishant Kumar Singh
Assistant Professor, G L BAJAJ Institute of Management and
Research
EDITorIAl BoArD ExcErpT At the initial Time of submission
paper had a 4%
plagiarism which is an accepted level for publication. He
editorial viewpoint is of an
observation that article had a successive close watch by the
blind reviewer’s which at later
stages had rectified and amended by an authors in various
phases as and when requisite to do
consequently. The reviewers had in a beginning stages mention
with minor revision with a
following stamen which at a small duration streamlined by
authors (Jeevan John, Devashish
Sharma, Nishant Kr. Singh). The comments related to this
manuscript are tremendously
perceptible related to exponential organization both subject
wise and research wise by

the reviewers during evaluation and further at blind review
process too. The authors be
commendable of appreciation for writing this paper onimpact
of blockchain technology in
india’s digital economy. The blockchain technology as
highlighted by the authors in section
5. The objective of the paper is clear and discussion are well
placed and open up avenues for
future studies. All the comments had been shared as a mixtures
of dates by the authors in
due course of time and same had been incorporated by the
author in computation. By and
large all the editorial and reviewer’s comments had been
incorporated in a paper at the end
and further the manuscript had been earmarked and decided
under “View point ”category
as its highlights and emphasize the work in relation to use
blockchain technologyparticularly
on India’s digital economy.
paper Nomenclature: View Point (VP)
paper code: V11N1JM2019VP1
originality Test ratio: 4%
Submission online: 8-March-2019
Manuscript Acknowledged: 12-March-2019
originality check: 16-March-2019
peer reviewers comment: 1-April-2019
Blind reviewers remarks: 20-April-2019

Author revert: 21-April-2019
camera-ready-copy: 20-June-2019
Editorial Board citation: 25-June-2019
published online First: 5-July-2019
ArTIclE HISTory
ENTERPRISE INFORMATION SYSTEM
ABSTrAcT
purpose: In the backdrop of Digital India and the National E –
Governance mission there has been an exceedingly high
reliance on the digital infrastructure which acts as an enabler in
the process of decentralizing and scaling the Indian digital
economy. This paradigm shift entails a significant account of
trust and security of data which is to be provided for the end
user.
It is in this regard, a study is made so as to understand and
analyses the assimilation of Block chain technology into
India’s
digital infrastructure which is to provide robustness and
scalability in the technological contours of growing Indian
economy.
Design/Methodology/Approach: The research incorporates the
application of exploratory method withstanding the
requirements of data, review and analysis.
Findings: Theanalysis comprehensively concurs that Blockchain
technology acts as an enabler in bridging the gap between the
principles and practices of India’s digital economy. It further
approves the hypothesis that a robust technological

infrastructure
acts as an impetus towards the greater goal of financial
inclusion.
originality / Value: The discourse of understanding the
significance of digitally enabled financial services is of
growing interest.
However this paper endeavours to pioneer a link between the
social aspects of financial inclusion to that of technological
one.
KEyworDS Blockchain | Digital India | Technology | Financial
Inclusion | cyber Economic Espionage
www.gjeis.com
*corresponding Author
https://doi.org/10.18311/gjeis/2019
Volume-11 | Issue-1 | Jan-Mar, 2019 | Online ISSN : 0975-1432
| Print ISSN : 0975-153X
Frequency : Quarterly, Published Since : 2009
©2019-20 GJEIS Published by Scholastic Seed Inc. and Karam
Society, New Delhi, India. This is an open
access article under the CC BY-NC-ND license
(http://creativecommons.org/licenses/by-nc-nd/4.0/).
GJEIS
ISSN (Online) : 0975-1432
ISSN (Print) : 0975-153X
DOI: 10.18311/gjeis
Volume 11 | Issue 1 | Jan-Mar 2019

Dr. Subodh Kesharwani
Editor-in-Chief
Published by
www.gjeis.com
ENTERPRISE INFORMATION SYSTEM
Since 2009 in Academic & Research
DOI: 10.18311/gjeis/2019 Vol 11 | Issue 1 | Jan-Mar 2019 95
www.gjeis.com
View Point
Jeevan John Varghese, Devashish Sharma and Nishant Kumar
Singh
Introduction
A popular instance for the occurrence of an
event is often described with the help of classical
unities which are described as the unities of time,
place and action. This philosophical narrative can be
viewed as a cornerstone towards the understanding
of blockchain(Bashir, 2018) in Indian digital
economy. The socio-economic paradigm of our

country especially after the wake of liberalization
has been such that it has encountered various
challenges and moreover numerous possibilities.
One of the greatest possibilities which India has
embarked in the due course has been its transient
and high end infrastructural capabilities. Especially
in the wake of a robust infrastructure which would
help in the transition of our “medieval” economic
infrastructure to attain parity with that of developed
countries. It is at this pointof the narrative a modern
and state of the art infrastructure which essentially
provides high end data security was advanced,
known as the blockchain. The principledemand
for the advancement of this infrastructure was
due to the increasing instance of cyber fraud that
occurred between the 1990’s and early 2000(Swan,
2015). However in India with a rapidly increasing
population, the process of enumeration and

inclusion of people into the organized financial
system has been a cumbersome task. And the
accomplishment of such a hefty task cannot be
visualized in vacuum, as it essentially involves a
large amount of man, money and infrastructural
capabilities. It is in this backdrop we need to realize
as to how blockchain as an infrastructure could drive
as a juggernaut wave towards a robust and sound
digital economy providing parity and concurrency
to all the beneficiaries involved in the system.
literature review
The most fundamental and critical understanding
of the blockchain as a “distributed ledger”
(Bashir, 2018) has facilitated in understanding
its technological viability. However this nascent
technological tool has been a matter of much
contemplation in the technological circles (Zibin,
Xie, Dai, Chen, & Wang, 2017) such as Institute
of Electrical and Electronics Engineers especially

during its 6th International Congress on Big Data.
However the financial viability of using this tool
as a model of secure digital transaction has been
sought much later (Swan, 2015). Especially in
the backdrop of ambitious developments such as
digital India there exists an expected trillion dollar
economy in hand (Company, 2018)which can seek
benefit from this technological leap. Thus it becomes
an imperative to analyze and understand as to how
the dimensions of secure digital transaction can be
enhanced and developed to provide a stable and
scalable infrastructure(Blockchain Technology
Explained: The Ultimate Beginner’s Guide about
Blockchain Wallet, 2017) meeting the demands of a
developing economy.
objective
Based on the understanding developed from the
respective documented records, it has been noted

that there exists a lacuna in terms of contextual
analysis. This void is fundamentally created due to
an unsynchronized evaluation in terms of explaining
the blockchain technology and Indian digital
experience. Therefore it seems to be an imperative at
this juncture to critically evaluate the following:
A prelude towards understanding blockchain 1.
as a key technological instrument in financial
technology.
Recognising the impact of blockchain in India’s 2.
advancing digital economy.
research Methodology
The present studyendeavors the adoption of
anexploratory approach as it is principally based
on secondary sources of datacollected from various
reports of government and private organization. This
endeavor has been sought to enhance and develop
understanding so as to make a comprehensive
evaluation of the objective under consideration.

Global Journal of Enterprise Information System
Vol 11 | Issue 1 | Jan-Mar 2019 Online ISSN : 0975-1432 |
Print ISSN : 0975-153X96
Analysing the Impact of Blockchain Technology in India’s
Digital Economy
Evaluating Blockchain
Technology
Contrary to the traditional misconception
blockchain is often misunderstood with that of
Bitcoin. However it is noteworthy to understand
that Bitcoin is essentially a product that uses the
blockchain technology. One of the most cited phrase
for describing the blockchain technology has been
“distributed ledger”(Zibin, Xie, Dai, Chen, & Wang,
2017). However the technological foundation of
blockchain goes far beyond that. Originally the
development of blockchain occurred in 1991 by a
group of scientists who endeavored to timestamp

documents. The timestamp for document was
essentially done so that the documents cannot be
tempered or manipulated in any way. However the
gravity of this technology was only realized when
Satoshi Nakamoto(Swan, 2015) in 2009 developed
a Cryptographic currency known as Bitcoin. The
technical notion of the working of a blockchain can
be understood with the help of thought experiment.
Consider a person holding two Rubik’s Cube in
each of his hand, such that the Rubik’s Cubes are
joined together by a thread. Here each Rubik’s Cube
describes a block and that thread describes the hash
of the particular block. It would be noteworthy to
understand that each block contains a certain data
that is pertinent to a particular block and this data
is not subjected to manipulation or tampering.
And any tampering of data will have an effect on
the subsequent block attached to the tampered

block(Bashir, 2018). The analogy for the hash of a
particular block can be understood with that of the
fingerprint as it provides a unique identity for each
block in a blockchain. Initially when a block is null
a particular hash is calculated or assigned to a block.
However as data is encrypted into a particular block
the value of the hash changes. This triggering of
hash helps in detecting the change or tampering
of data within a block. As it has been mentioned
earlier, each block is attached to a previous block
with the help of the hash and any change within the
data of a particular block not only triggers a change
in the hash of a particular block but also create a
change in the hash of the subsequent blocks. This
degree of robustness of a blockchain provides an
ambient proof of work making it an efficient system
for secure data storage. The security of a blockchain
is derived from its innovative usage (Swan, 2015)of

proof of work and hashing. Moreover the centralized
mechanism of data distribution provides the ease of
scalability and accessibility of data among all the
users using the blockchain. Moreover it provides a
peer-to-peer which allows any of the users to join
a blockchain. Having a preliminary understanding
of the blockchain technology it would be an
imperative to understand and examine the backdrop
of Indian digital economy which would enable a
comprehensive evaluation of the existing digital
infrastructure.
India’s Journey Towards a
Digital Economy
Before the introduction of ambitious projects
like digital India and National E – Governance
mission the Government of India with financial
assistance of United Nation in 1975 developed the
National Informatics Center(Technology, 2017).
The primary aim of which was the computerization

of government offices. This initiative was followed
by the development of major insurance repository
of India such as Central Depository Services and
National Securities Depository Limited in 1999
and 1996 respectively. However this development
was abysmally low to cater the demand of a fast
and growing economy. Owing to the development
of digital infrastructure, the Government of India
sought it to be an imperative to introduce further
development in due course of time. One of the
eminent developments in terms of revival of our
digital economy was laid in the (India, 2008). Here
the ambitious project of National E – Governance
Mission was introduced which primarily focused
on enabling digital services for a citizen centered
participation in the governance. This model of
(Company, 2018)National E – Governance Mission
was primarily adopted from the implementation

strategies developed by Singapore. As a forerunner
www.gjeis.com
to these initiatives the Government of India under
the aegis of Ministry of Electronics and Information
Technology and Ministry of Finance introduced
several other schemes such as Digital India.
There exists a wide ranging impact on the social,
political and economic front with respect to the
execution and development of India’s robust digital
infrastructure. However the requirement of an
advanced infrastructure such as Blockchain is only
understood with help of some vital statistics which
has been dealt in the following section.
The requirement of a robust
Digital Infrastructure
One might pose a pertinent question as to why

a sophisticated and complex technology such
as Blockchain is required in the Indian context.
However to ascertain such dilemma we need a
factual evaluation of data. For the sake of reducing
parametric abnormality we have ascertained certain
vital statistics which would help in the evaluation and
understanding the need for Blockchain technology
in India.
country Indonesia India Germany Japan China France
percentage 61% 56% 38% 37% 37% 32%
Index Scores 36 29 55 61 42 53
Source: McKinsey Global Institute
Table 1: Growth of Digital Economy for the
financial year 2016-2017
According to the report by the McKinsey Global
Institute for the financial year 2016-2017, India has
seen a rapid growth in terms of digital economy
with a staggering 56% and an index score of 36.

However this index is followed by another data on
the dynamic inclusion (Company, 2018)of Pradhan
Mantri Jan Dhan Yojana which was principally
aimed at financial inclusion has witnessed a 2.4 times
increase i.e. from 105 million in 2014 to 308 million
in 2017. The growth of financial inclusion has a
complimentary nature with that of technological
accessibility as it enhances the efficiency of usage
of resources.
However this aspect of our digital economy
circumvented a new horizon in the post
demonetization years with the meticulous
development of “Digital Wallets” thus enhancing
the operability of cashless transactions. This can be
understood from the following analysis.
year country
Number of cash-
less transactions
per person

2014 India 1.9
2017 India 8.0
Source: RBI, Euro monitor International
Table 2:Number of cashless transactions per
person (excl. cheques)
This table stipulates that there has been a 321%
increase in the number of cashless transaction from
the financial year of 2014 to 2017. The fundamental
prerogative behind this analysis is based on the
fact that with rise in the demand of digitally
enabled financial services, there exists an equitable
requirement to scale up the digital infrastructure.
This need for scalability is not restricted to the
financial services, but perhaps needs to be viewed as
a holistic concept which encompasses all the services
requiring a robust technological infrastructure.
View Point
Singh

Global Journal of Enterprise Information System
Vol 11 | Issue 1 | Jan-Mar 2019 Online ISSN : 0975-1432 |
Print ISSN : 0975-153X98
countering cyber Economic
Espionage with Blockchain
Apart from making a utilitarian perspective the
aspect of blockchain as tool to counter act cyber
economic espionage is fundamental to understand
as it involves financial security which in turn
translates to national security. In the modern era
the mechanism of warfare is not merely restricted
to the inhospitable warfront but perhaps involves the
requirement of providing a transient technological
infrastructure which enables in providing reliability,
scalability and accessibility.
According to a report by NITI Ayog in 2017
more than 50 percent of the organizations are
reportedly affected by major cyber disruption. A

detailed account entails that of the total attacks 57%
attacks are caused due to phishing and a whopping
20% of the same by denial of service. Earlier the
acts of cyber economic espionage were considered
essentially as “first world problem”, however with the
increasing reliance on computational infrastructure,
the need for an efficient and robust technology is at
anall-time hike. Perhaps it is this lacuna which needs
to be addressed with the help of efficient technology
such as blockchain.
conclusion
On a concluding note it can be observed that
even though the government is skeptical about the
implementation of accepting Bitcoin as a legal
tender. The acceptance of blockchain technology in
the future essentially looms around the practical and
the legal challenges it faces especially in terms of
statutory incorporation and technological upheaval
which has an unsettling impact in the due course.

However the observational understanding dictates
that with more countries adopting and implementing
blockchain infrastructure, it would the imperative of
“digital India” to accept and adopt innovation and
technology into its contours of economy.
references
Bashir, I. (2018). • Mastering Blockchain: Distributed
Ledger Technology, Decentralization, and Smart Contracts
Explained. Birmingham, United Kingdom : Packt
Publishing Limited .
Blockchain Technology Explained: The Ultimate •
Beginner’s Guide about Blockchain Wallet, M. B.
(2017). Alan T. Norman. California : CreateSpace
Independent Publishing Platform.
Company, M. a. (2018). • India’s Trillion Dollar Digital.
New Delhi: Ministry of Electronics and Information
Technology, Government of India.
India, G. o. (2008). • ELEVENTH REPORT. New
Delhi: Government of India .
Swan, M. (2015). • Blockchain: Blueprint for a New
Economy. (T. McGovern, Ed.) Sebastopol, United
States of America (usa) : O’Reilly Media Inc USA.
Technology, M. o. (2017). • Annual Report 2016-2017.
New Delhi: Government of India.

Z. Z., Xie, S., Dai, H., Chen, X., & Wang, H. (2017). •
An Overview of Blockchain Technology:Architecture,
Consensus, and Future Trends. In J. Zhang (Ed.),
IEEE 6th International Congress on Big Data (pp. 557-
564). Hawaii: Conference Publishing Services, IEEE
Computer Society.
Analysing the Impact of Blockchain Technology in India’s
Digital Economy
Blind Reviewers Comment
The topic of the research is very relevant and focus towards
societal and financial security issue.•
In the review it is find that the objectives of the research are
clearly achieved through analysis.•
Also research design, data collection and sample size were well
designed and meeting the ample reliability and •
validity in all aspect.
www.gjeis.com
View Point
Singh
GJEIS prevent plagiarism in publication
The Editorial Board had used the turnitin plagiarism
[http://www.turnitin.com] tool to check the originality and
further affixed the similarity index which is 4% in this case

(See Annexure-I). Thus the reviewers and editors are of
view to find it suitable to publish in this Volume-11, Issue-1,
Jan-Mar, 2019
citation
Singh
“Analysing the Impact of Blockchain Technology in India’s
Digital Economy”
Volume-11, Issue-1, Jan-Mar, 2019. (www.gjeis.com)
https://doi.org/10.18311/gjeis/2019
Volume-11, Issue-1, Jan-Mar, 2019
online ISSN : 0975-1432, print ISSN : 0975-153X
Frequency : Quarterly, Published Since : 2009
Google citations: Since 2009
H-Index = 96
i10-Index: 964
Source:
https://scholar.google.co.in/citations?user=S47TtNkAAAAJ&hl
=en
conflict of Interest: Author of a Paper had no conflict neither
financially nor academically.
Annexure 1
Copyright of Global Journal of Enterprise Information System is
the property of Kedar Amar

Research & Academic Management Society (KARAMS) and its
content may not be copied or
emailed to multiple sites or posted to a listserv without the
copyright holder's express written
permission. However, users may print, download, or email
articles for individual use.

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