Blockchain Technology Stack and Protocol
Bitcoin and blockchain can become confused, because Bitcoin denotes the digital currency that is the underlying technology platform of blockchain, which is responsible to transfer the assets over blockchain technology. The technology stack over which blockchain operates includes the following components, as shown in Figure 13.3. A detailed discussion of these components is provided in the following subsection .
The User Experience (UX)
User experience is the highest layer of the blockchain technology stack. It integrates all of the underlying technological developments to support the user application development for day-to-day activities. Specialized Dapps (Decentralized applications) are being continuously developed, in order to access specialized Dapps browsers on the user devices. Blockchain applications are continuously growing, as users are becoming conversant with these applications.
Lots of blockchain applications have been developed in recent years. However, Bitcoin, is the intial and most important application, devised using indigenous blockchain protocol, except for the recent changes that have been introduced. The Bitcoin network is mainly used in the centralized financial sector, banks, resolution agencies, and other financial intermediaries. The decentralized autonomous organization (DAO) was developed with to decentralize the transfer of value between
FIGURE 13.3 Layers of Blockchain Stack and Protocols. [This figure shows the layers of a blockchain stack, and protocols such as the user experience layer, the cryptocurrency layer, the distributed ledger, and the internet infrastructure (TCP/IP.] agencies. In recent years, the development of more complex blockchain-based applications has been needed, to support transaction and data storage and computation.
Ethereum was developed to create an alternate protocol to Bitcoin, to build a decentralized public application by executing smart contracts. Smart contract applications run as programs on a peer-to peer-network, which allows for improvements in security, time, and scaling. Ethereum tokens have been moved up in the technological stack, along with distributed application (dApp) or DAO tokens. This provides a framework to support the development of complex applications using smart contacts, which are critical to the development of new applications based on blockchain.
The Blockchain Protocol
Blockchain is implemented on a peer-to-peer network of computing devices (also called “nodes”), which are connected through the internet (TCP/IP) and operate on blockchain protocols. Each node consists of identical copies of the distributed ledger of completed transactions. A cryptographic consensus algorithm is used to provide security for transactions completed on each node of the P2P. The blockchain protocol is based on the trusted public and an open, shared ledger of transactions, which is not under the control of any single entity in the network. Once recorded on the blockchain, these transactions cannot be changed. These protocols also take care of the financial benefits to the authors/owners and the miners (operators) of devices, in order to retain the cryptographically transactions registered into that distributed ledger. These financial benefits are known as tokens.
New transactions are validated using these tokens, which are generated for that transaction well before these transactions have been appended to the blockchain ledger.
This is the lowest and most basic technological layer. The internet is a network infrastructure that allows all the devices to talk to other devices using the most popular internetwork protocol, TCP/IP. The TCI/IP became popular after the invention in 1989 of the World Wide Web (WWW). The first version of the WWW is referred as Web version 1 (Webl), which provided the facility of the internet to all of its users. Web 1 has provided the facility of web resources such as multimedia, documents, images, services, etc. Each service on the internet has been assigned a URL (uniform resource locater), to access it.
In the early 2000s, technology advanced with the upgradate to the initial version of WWW (i.e., Web 1), which this was referred as Web version 2 (Web2). That innovation gave rise to services such as ecommerce, transactions over the internet, and social networking. There was further growth of the WWW, known as Web version 3.0 (Web3): the Internet of Value. Initially, point-to-point transactions were completed with the help of intermediaries; but with the invention of blockchain protocol, P2P interactions were performed without the help of intermediaries. The absolute first and most significant blockchain was Bitcoin, which allows value (as digital currency) to be moved between people without requiring any of the budgetary delegates of banks. These are situations where blockchain innovation could likewise be utilized for the advancement of web-based life applications without requiring
Facebook and Twitter, the improvement of ride-sharing applications without requiring Uber and Grab, convenience sharing without Airbnb, and interactive media sharing without YouTube. This will prompt a genuinely decentralized web.