Background of Blockchain

Blockchain technology introduced the term “trustlessness” to ensure a secure transmission of data. In the absence of blockchain, there was no such authority who could take account of all the data entries and transactions taking place. Many events led to the evolution of blockchain and made it popular around the globe. In this section, we discuss the history and the complete architecture of blockchain technology, along with its features.

History of Blockchain

Satoshi Nakamoto et al. [13] proposed the idea of blockchain as the fundamental technology in Bitcoin. While blockchain has acquired an adequate amount of consideration outside the domain of cryptocurrencies, it all started with Bitcoin. With the benefit of public-key cryptography and cryptographic hashing, Bitcoin enables its users to be tremendously unique. A digital wallet generally consists of the user’s Bitcoin and the private key for an account, which is helpful in signing all transactions from that particular account. The network will verify any transaction introduced by the account, with the help of the corresponding public key for that account [14], whereas the blockchain platform does not require anonymity [15].

Blockchain can be summarized as a transparent process in the following way. In the first place, before implementing multiple witnesses, an announcement is created. The details of the announcement for each participant are documented in their own distinctive duplicate of the ledger, in the form of “blocks.” On the network, each participant routinely tries to contrast their current block with other participants’ blocks. If a majority of the population has access to common version of the current block, then that version is regarded as the truth. Governments and various established companies, e.g., American Express and Microsoft, are exploring blockchain technology. The most essential and beneficial incidents regarding breakthroughs in the evolution of the blockchain architecture are summarized in Table 14.1.

Ingredients of Blockchain

Various components work together to implement blockchain technology. These components include:

Ledger

At its most fundamental level, blockchain is an entrenched record, similar to a traditional ledger, often used to control and track asset ownership. Blockchain is just an innovative coalescence of various old ideas, approaches, and methodologies, though

TABLE 14.1

Essential Events of the Blockchain Architecture Regarding the Breakthroughs in Its Evolution

Year

Breakthrough

2009

Creation of first Bitcoin block.

2010

December marks the disappearance of Satoshi.

2012

e-Estonia: Estonian blockchain technology.

2015

Hyperledger and Ethereum go live.

2018

Blockchain demand increases.

2019

Produce suppliers demanded by Walmart [16].

2020-2021

Dubai initiative [17].

it is usually expressed as a new and innovative technology. Ledgers, cryptography, group consensus, and immutability are some of these components. The ledger is a record-keeping infrastructure located at the core of blockchain, which enables the users of a ledger to review past transactions. The ownership in the past the ownership itself was the usual element of this story, although any type of data can be recorded with the help of ledgers [18].

Cryptography

The second most fundamental component of blockchain technology, cryptography confidentially specifies the way of communication. In Bitcoin technology, cryptography is used to vindicate claims made by people against the assets being controlled on the blockchain, which provides ledger immutability and preserves anonymity. A “cryptographic hash” is a particular function that implements all the data in a block, in order to chain those blocks. A hash or ID is generated that does not match the true value documented on the upcoming block in the chain when one tries to convert the information in the block. A completely new hash is engendered when we convert the information in any block. As a result, this will break the blockchain and refute all the blocks associated to where the conversion was created, as the newly generated hash will not match the hash in the upcoming block header.

Peer-to-Peer Network

In blockchain, peer-to-peer network (P2P) infrastructure makes extensive use of existing computer network technology. Blockchain operates as a principal element of our contemporary internet, which also uses this networking technology. Redundancy and fault tolerance are increased with the removal of a single point of flaw, using P2P network architecture, generally available in client/server network infrastructure.

Assets

All blockchain solutions have assets as one of their essential component. Assets are those items that are considered in the context of a given solution. Items that require a record of ownership are known as assets. They contain general information, like health records, event tickets, or a patent, and can be monetary as well as nonmonetary. The transfer of Bitcoin and other cryptocurrencies is recorded with the help of blockchain, which initially begin as a record keeping system. Blockchain was born to convert a documentation of digital ownership. Blockchain supplements the internet of knowledge that we have in our contemporary world with the internet of the value that we are inventing for tomorrow, in various ways.

Merkle Trees

Merkle trees in blockchain are used for the quick and methodical validation of data. All the data in a block can be summarized with the help of Merkle trees, by generating a root hash of that particular data. The child nodes of data are paired and hashed repeatedly, until a single node is left, in order to find out the root hash. A Merkle root is defined as the last remaining child node.

Consensus Algorithms

In order to validate transactions and accord with the order of the nodes on the network and their existence on the ledger, a consensus is used. This process is censorious in the case of applications like cryptocurrency, as it fails to avoid the invalid data to be documented to the underlying ledger that acts as a database for all the transactions. There are distinct solutions relevant to distinct situations with consensus. One decides on the basis of expenses related to opportunity (e.g., safety, rapidity, etc.) which consensus mechanism is to be used. Proof of work (PoW) and proof of stake (PoS) are the usual consensus algorithms. Private and permissioned scenarios contain other consensus mechanisms, where we do not require computationally intensive consensus mechanisms, for example in Hyperledger. If blockchain is not public, then there are many more alternatives for consensus.

 
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