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.

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Table of Contents (14 chapters)
Preface
Preface
Who this book is for
What this book covers
To get the most out of this book
Get in touch
Free Chapter
1
Introduction
Introduction
What blockchain is
What blockchain isn't
Blockchain definitions
How are blockchains different from databases?
History of blockchain
The motivations behind blockchain
Characteristics of blockchain
Background of DLT
The different types of blockchain
Overview of blocks
Influence of Moore's law on blockchain technology
Summary
2
A Bit of Cryptography
A Bit of Cryptography
Cryptography in blockchain
Classical cryptography
Cryptographic primitives
Symmetric key cryptography
Asymmetric key cryptography
Cryptographic hashing
Encoding schemes
Summary
3
Cryptography in Blockchain
Cryptography in Blockchain
Hashing in blockchain
Digital signatures in blockchain
Summary
4
Networking in Blockchain
Networking in Blockchain
Peer-to-peer (P2P) networking
Network discovery
Block synchronization
Building a simple blockchain in a P2P network
Summary
5
Cryptocurrency
Cryptocurrency
Bitcoin basics
Keys and addresses
Transactions
Mining and consensus
Blockchain
Blockchain networks
Bitcoin hard forks and altcoins
A simple cryptocurrency application
Summary
6
Diving into Blockchain - Proof of Existence
Diving into Blockchain - Proof of Existence
MultiChain blockchain platform
Setting up a blockchain environment
Getting started with MultiChain
Proof of Existence architecture
Building the Proof of Existence application
Summary
7
Diving into Blockchain - Proof of Ownership
Diving into Blockchain - Proof of Ownership
Digital assets and identity
Proof of ownership
Smart contracts
Choosing the smart contract platform
NEO blockchain
Ethereum blockchain
Summary
8
Blockchain Projects
Blockchain Projects
Categorizing the blockchain projects
Financial blockchain projects
Non-financial blockchain projects
Links for the projects
Summary
9
Blockchain Optimizations and Enhancements
Blockchain Optimizations and Enhancements
Blockchain optimizations
Blockchain enhancements
Summary
10
Blockchain Security
Blockchain Security
Transaction security model
Decentralized security model
Attacks on the blockchain
Threats of quantum computing
Summary
11
When Shouldn't We Use Blockchain?
When Shouldn't We Use Blockchain?
Distributed databases versus distributed ledger technology (DLT)
What can we store on a blockchain?
Centralized versus decentralized application architecture
Properties of blockchain
Decision models for blockchain
Summary
12
Blockchain Use Cases
Blockchain Use Cases
Tracking provenance in the supply chain
Financial system
Crowdfunding
Non-profit autonomous organizations
Summary
13
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Centralized versus decentralized application architecture

We have compared DLTs and databases by analyzing their properties. But it's also important to analyze the architecture of the application before implementation. We will describe the architecture for both centralized and decentralized applications so that there will be more clarity about the components and the way in which they communicate with each other.

In an application that uses a basic centralized server architecture, there will only be a single instance of all the components involved. Figure 11.4 shows the architecture diagram of a web server application. The user can communicate with the web server through the user interface provided by the web application. A web application is programmed using a combination of scripting languages, such as JavaScript, and markup languages, such as HTML. A simple web application...

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