Blockchain Technology and Its Emerging Applications

N. Rahimi, I. Roy, B. Gupta

Southern Illinois University

P. Bhandari

Southeast Missouri University

Narayan C. Debnath

Eastern International University

Introduction

Blockchain is an intangible public record in the digital world. It can be considered as a ledger that contains all transactions, all of which can be accessed by anyone. Even though blockchain does not give anything in hand, it does provide a sense of ownership. This ownership can be transferred to anyone else. Any transaction performed in blockchain stays in blockchain forever, which is the beauty of this technology, making it more secure than others. Another factor that makes this technology safer is that self-regulation is easily carried out using blockchain technology, which requires multiple confirmations before a transaction is made [1,2].

The chapter begins by developing a common ground with respect to blockchain terminology. Section 7.3 summarizes the history and working of blockchain technology. In Sections 7.4 and 7.5, respectively, types of blockchain are discussed, with their advantages and disadvantages. Section 7.6 investigates the limitations of blockchain technology. Section 7.7 presents applications for blockchain technology. Section 7.8 gives several real-world examples of blockchain technology applications. Section 7.8 concludes.

Terminology

Blockchain combines the terms “block” and “chain.” A block can be seen as a file that contains information about all the transactions that have been processed. Every transaction contains information about the sender and receiver, and some form of identification that makes the transaction unique and connected to the others. For a chain, the blocks are arranged in linear sequence. In blockchain technology, every block or information about the transaction relates to other blocks by adding the previous block’s information. This is the reason why, once placed in blockchain technology, a transaction cannot be reversed or manipulated, because the block is already connected with others [3].

Block

A block is a list of transactions containing information processed on the network. Every piece of information processed by the network is stored one block at a time.

Chain

When a transaction is processed, every computer in a network tries to solve a puzzle of algorithms. Once the calculation is completed, cryptography creates the chain of blocks, placing them in order. The placement of a block in the chain is verified and secured by most computers in network, which causes the chain to keep growing longer with each transaction.

Blockchain Ledger

This is like a traditional accounting ledger, keeping transactions for all accounts in a centralized banking system. However, in the case of blockchain. it is digital and stores all of the accounts and transactions processed in the network. A typical blockchain ledger stores information such as account numbers, transactions, and balances.

Node

A node is made up of every computer on a blockchain network participating in the processing of transactions. These nodes connect with each other in a network and help verify transactions. They can also view all the transactions processed in a blockchain.

Proof of Work

For any transaction to be processed, there is a method of verification used in block- chain technology that verifies that a transaction is real and not processed automatically, trying to hack or do something wrong. This method or information algorithm used for verification or processing transactions is called proof of work. Every computer in a network has its proof of work, and when this has been verified, a block is added to the blockchain.

Key

The security of data transferred in a blockchain is very important. Hence, in this technology, a key is used to encrypt or decrypt data. These keys are very strong, providing a high level of security, while encrypting data and passing it on in a network and/or decrypting it and providing it to the public, for informational purposes [4]. Private keys and public keys are used in this technology. A private key should always be kept secret, as it is used as the digital signature of a user in a network, whereas a public key can be shared publicly. Private keys are therefore very important, as this is where most of the hacking occurs in blockchain technology, and because people can transfer ownership using their private keys [5].

Input

Input refers to any values that any user has received within blockchain through incoming transactions.

Output

When a user wants to contribute in blockchain, they distribute values for the outgoing transactions to all other members of the blockchain. These are called “output.”

Hash Function

A hash function is a computer program used to store large amounts of transactional information processed in blockchain. Because of the hash function, even though blockchain processes large quantities of transactions, the memory is never overwhelmed [6]. Hash functions convert all input values into a string of alphanumeric values, to produce a digital fingerprint. The important characteristic for blockchain is that the two separate input values never create the same hash values using the hash function.

 
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