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)

Network discovery

Network discovery in a P2P network is crucial. No network is defined when a new node boots up. The new node must detect at least one blockchain node to be a part of the network. There are several ways in which a node can identify peers and thus discover a network.

Different blockchain frameworks use their own protocols to perform peer discovery and efficient routing. We're going to start by exploring basic P2P network discovery by taking a look at Bitcoin's original implementation.

The simplest way to find the list of peers to connect to is by hardcoding a few of the well-known peers. Using a central server that maintains a list of peers is another approach. Bitcoin holds information about DNS seeds, which provide a high level of reliability when a node is initially set up, and will respond with a list of the IP addresses of the Bitcoin nodes. Once...