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Blockchain in Oil and Gas Industry

Blockchain Deal for Chinese Gas Solutions, 2019). To trace, verify and carry out

crude oil transactions, ADNOC is piloting a stable, blockchain-enabled platform for

production wells to the customer. The pilot concentrates on ADNOC activities to

simplify accounting procedures, minimize run-time and increase reliability (Adnoc

Pilots Blockchain Program Across Value Chain with IBM, 2020).

11.5  LIMITATION AND CHALLENGES OF

BLOCKCHAIN TECHNOLOGY

While blockchain technology has its advantages, the existing format is not flawless,

and many risks arise. The four types of challenges that we can’t ignore are threats to

operations, cyber threats, regulatory hazards and legal risks. Risk managers expect

that implementing blockchain can adversely affect the petroleum and gas sector.

Blockchain is still fresh to the industry, with only minor failures as yet, although

several other possible issues could plague the structure. Knowledge can be lost, and

names are usually not accessible despite being requested. Public transfers can be

quite large. Fraud exists between the public realm’s truth and the blockchain’s dis­

tributed ledger structures. There is a risk that EMV cards’ potential to be exchanged

for more money laundering should be checked to protect them. Unlawful contracts

can be published into decentralized blockchains and impose tax evasion (Accenture

Blockchain Benefit, 2018; Surujnath, 2017; Lindman et al., 2017; Walch, 2015; Cao.,

2017). There are always several impediments to the innovation of new technology.

Blockchain technology is also a newly adopted technology and faces challenges.

This section identifies some of the significant challenges to applying blockchain in

the petroleum and gas industry.

11.5.1  Evolution

With an increase in digital technology, the number of transactions is increasing. The

blockchain gets more and more complex with every transaction. Already, the Bitcoin

network has gone through 100 gigabytes. Just a single purchase may be authenticated

and entered into the database. Bitcoin is a very tiny coin that cannot be traded for

any of the value that we would want and cannot, by itself, fulfil billions of dollars

of money at a time. If the market for Bitcoin approaches what is feasible to make,

blockchain may become much less available for all who choose to use it for transac­

tions. If the nodes are far away from each other, the blockchain is broken into several

parts, and then it becomes impossible to resolve the transition. Several algorithms

resolve these issues, one of which is scaling. To solve a complex problem, we need

to optimize data via working parts while managing the outcomes. A novel scheme is

implemented to resolve the security issue of storing data on the blockchain (Bruce,

2014). New transaction data is placed in a “trunk chain” on the network, enabling

consumers to display their balance. A novel authentication system eliminates the

need to keep all previous transactions in memory. The customer may even correct

glitches in the website. The old client is replaced by a new system managed by the

new scheme (Van de Hoof et al., 2014). “VerSum” is an algorithm for computing