Book Image

Foundations of Blockchain

By : Koshik Raj
Book Image

Foundations of Blockchain

By: Koshik Raj

Overview of this book

Blockchain technology is a combination of three popular concepts: cryptography, peer-to-peer networking, and game theory. This book is for anyone who wants to dive into blockchain from first principles and learn how decentralized applications and cryptocurrencies really work. This book begins with an overview of blockchain technology, including key definitions, its purposes and characteristics, so you can assess the full potential of blockchain. All essential aspects of cryptography are then presented, as the backbone of blockchain. For readers who want to study the underlying algorithms of blockchain, you’ll see Python implementations throughout. You’ll then learn how blockchain architecture can create decentralized applications. You’ll see how blockchain achieves decentralization through peer-to-peer networking, and how a simple blockchain can be built in a P2P network. You’ll learn how these elements can implement a cryptocurrency such as Bitcoin, and the wider applications of blockchain work through smart contracts. Blockchain optimization techniques, and blockchain security strategies are then presented. To complete this foundation, we consider blockchain applications in the financial and non-financial sectors, and also analyze the future of blockchain. A study of blockchain use cases includes supply chains, payment systems, crowdfunding, and DAOs, which rounds out your foundation in blockchain technology.
Table of Contents (14 chapters)

Transaction security model

The internet is a system of connected devices that communicate with each other using various protocols. Due to the open nature of communication on the internet, there are both individuals and groups of people trying to harm users' devices or applications by hijacking communications. These are often referred to as bad actors, and can be found in any part of the internet. It's often difficult to keep these bad actors out of any system due to the fragile nature of communication on the internet, and every application implements a security model for protection against bad actors.

Most applications ensure secure communication by encrypting the traffic between the transmitting and the receiving end. In fact, more than half of the traffic on the web is encrypted using the HTTPS protocol. Due to the increased number of attacks on the internet, encrypting...