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)

A simple cryptocurrency application

Creating a cryptocurrency application will allow us to implement all the blockchain concepts we've looked at so far, along with the transaction structure used in Bitcoin, and we can then deploy it in a fully P2P network. We created a blockchain application in a decentralized P2P network in Chapter 4, Networking in Blockchain. We will be using the same application to create and propagate the blocks in the network, but also extend the application with the concepts of transactions and wallets to create a completely decentralized cryptocurrency:

Figure 5.5: A flow diagram connecting all the components of the application

Figure 5.5 shows how the cryptocurrency application can be extended by adding wallet and transaction functionality. We will walk through the implementation of each component in order to understand its functionality.

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