Cryptocurrencies and Blockchain Technology Applications

Gulshan Shrivastava, Dac-Nhuong Le, Kavita Sharma, Gulshan Shrivastava, Dac-Nhuong Le, Kavita Sharma

• Publisher: Wiley-Scrivener
• Year: 2020
• Print ISBN: 9781119621164
• eBook ISBN: 9781119621157
• Edition: 1
• Topic: Economics
• Subtopic: Economic Theory
• Index: Economics

As we enter the Industrial Revolution 4.0, demands for an increasing degree of trust and privacy protection continue to be voiced. The development of blockchain technology is very important because it can help frictionless and transparent financial transactions and improve the business experience, which in turn has far-reaching effects for economic, psychological, educational and organizational improvements in the way we work, teach, learn and care for ourselves and each other.

Blockchain is an eccentric technology, but at the same time, the least understood and most disruptive technology of the day. This book covers the latest technologies of cryptocurrencies and blockchain technology and their applications. This book discusses the blockchain and cryptocurrencies related issues and also explains how to provide the security differently through an algorithm, framework, approaches, techniques and mechanisms. A comprehensive understanding of what blockchain is and how it works, as well as insights into how it will affect the future of your organization and industry as a whole and how to integrate blockchain technology into your business strategy. In addition, the book explores the blockchain and its with other technologies like Internet of Things, big data and artificial intelligence, etc.

PART I
CRYPTOCURRENCIES AND BLOCKCHAIN TECHNOLOGY

CHAPTER 1
BLOCKCHAIN: A NEW ERA OF TECHNOLOGY

Gururaj H L,^∗ Manoj Athreya A, Ashwin A Kumar, Abhishek M Holla, Nagarajath S M, Ravi Kumar V

Vidyavardhaka College of Engineering, Mysuru, India

Abstract
As the whole world is moving towards digital payments, ethers and transaction methods with quick payment, information is stored in a blockchain in a distributed network. The distributed network is a network system through which data, software and computer programming are spread across more than one node (computers) and these nodes are dependent on each other. It is nothing but a peer-to-peer network which eliminates a single point of failure. The blockchain is a growing list of records called blocks that are linked using cryptography. It is a decentralized, distributed and immutable ledger to store digital transactions. Its databases are managed using a peer-to-peer network where all the nodes in a network are equal and are the major concern in the types of network architecture. The consensus protocol is used for transacting and communicating between the nodes. In this chapter, an approach for storing data in a blockchain is investigated and reported whereby the record is kept safe and secure, preventing it from being manipulated by others. With the help of the above blockchain technology we are able to achieve data that is secure from manipulators.

Keywords: Blockchain, inter-planetary file system, Ethereum, Web 3.0, consensus protocol, mining, distributed P2P network, Ethereum transaction, SHA-256 algorithm, decentralized application

Blockchain is one of the booming words in the field of computer technology, which has the power to change the lives of people as the Internet did in the past twenty years. Blockchain is ready to make a big impact on the lives of people if we adhere to this technology. It is a fundamental and parallel part to the Internet and not just a use case like emails, e-commerce, etc. When people hear the term blockchain many come to a conclusion that it deals mainly with cryptocurrency and Bitcoin but it is not all about that. The cryptocurrency and Bitcoin can be compared to email where the backbone technology behind it is the internet. As such, blockchain is a technology. Blockchain can be broadly described as a digital form of the ledger where you can store whatever data you want and then later access it through the hash value you received. It’s just like the acknowledgment number you get when you produce some documents. Consider a scenario where some person x needs to send money to person y who lives in a different country; it takes at least 5-6 working days to transfer the money because we have middle parties like banks which require time to process it. When it comes to blockchain we have an immutable universal ledger where it stores transaction details of all the individuals in a block. When a transaction is made it adds a new block into the existing set of blocks in the system which is authenticated by everyone. When it comes to security it uses the best cryptographic algorithms and is difficult to hack. It uses the SHA-256 algorithm to keep the hash value secured. When a hacker tries to hack a blockchain system, first of all, he needs computation power of more than 50% of the supercomputer in the word and he also needs to change all the blocks because they are cryptographically linked to each other; moreover, the blocks reside in a distributed node and every time it checks with other nodes to see whether they possess the same details which are based on the consensus protocol. As it is a collection of chained blocks you can trace back to the transactions that have occurred by going back block by block. They also have originated smart contracts which are the logic built into most blockchains, where when an event happens it triggers another event. Finally, all the blocks are not owned by anyone like a bank or any trusted authority. The blockchain is owned by all of us and to maintain it we need resources, electricity, computing power, time, money, etc. So for the people who maintained all these resources, in 2008 Satoshi Nakamoto introduced the concept of Bitcoins to give them as incentives, and the persons who looked after the blockchain mined it and hence they were called miners. In this blockchain the word TRUST plays an important role. Consider an example of a party where ten people put in a thousand rupees each and draw one name from the box; this lucky person will get the entire amount. Here, it is the trust between all ten people which works like a blockchain and brings the trust from a centralized to decentralized platform.

The blockchain works on the following four major features:

1. Consensus
2. Security
3. Provenance
4. Trust

The countries which use this technology are Japan, Canada, Dubai, Estonia and many more. Dubai is transforming itself as the world’s first blockchain-powered government. Estonia is being called Ethereum Island. When it comes to India we have certain blockchain information such as:

1. State Bank of India partnered with BankChain and Intel to develop blockchain solutions.
2. West Bengal and Andhra Pradesh is transitioning to using blockchain software for solving land property issues.
3. The Centre for Development of Advanced Computing (C-DAC) Hyderabad is working on blockchain projects.
4. Blockchain patents are claimed by the Indians and many more.

Some of the recent blockchain technology being hyped in the current industry are as follows:

1. Google is bringing blockchain technology to its cloud services.
2. Facebook has plans for blockchain-based authentication.
3. Microsoft Azure allows the development, testing, and deployment of secure blockchain apps.
4. IBM is now delivering blockchain service around the world.
5. Walmart has partnered with IBM to create a blockchain for tracking food globally through its supply chain.
6. Mastercard has started to build their own blockchain-based payment gateways.
7. Huawei’s blockchain technology offers mobile carriers superb opportunities to subscribers.

Figure 1.1 shows the different sectors in which blockchain technology is being used.

Figure 1.1 Sectors of blockchain.

Blockchain is making its way into many sectors like agriculture, power p...

Table of contents

• Cover
• Table of Contents
• List of Figures
• List of Tables
• Foreword
• Preface
• Acknowledgments
• Acronyms
• PART I: CRYPTOCURRENCIES AND BLOCKCHAIN TECHNOLOGY
• PART II: CRYPTOCURRENCIES AND BLOCKCHAIN APPLICATIONS
• End User License Agreement