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)

What blockchain isn't

As we've just discussed, despite blockchain being fascinating due to its cryptography-based security, decentralized nature, and nearly immutable data storage mechanism, it's very important to understand its limitations.

Blockchain's ideal implementation is with atomic events or transactions, where minimal information about an event is stored as a transaction; these transactions can be clubbed together in a single block and added to a blockchain. Although a blockchain network is good at handling a global state, it would not add much value when it comes to storing data in bulk, as there would be scalability issues. It's very important to understand when best to apply blockchain technology to develop an application. We will explore when not to use blockchain in Chapter 11, When Shouldn't We Use Blockchain?.