Blockchain for Business

How it Works and Creates Value

S. S. Tyagi, Shaveta Bhatia, S. S. Tyagi, Shaveta Bhatia

• Publisher: Wiley-Scrivener
• Year: 2021
• ISBN:
  9781119711056
• Edition: 1
• Topic: Computer Science
• Subtopic: Artificial Intelligence (AI) & Semantics
• Index: Computer Science

The book focuses on the power of business blockchain. It gives an overview of blockchain in traditional business, marketing, accounting and business intelligence. The book provides a detailed working knowedge of blockchain, user cases of blockchain in business, cryptocurrency and Initial Coin Offering(ICO) along with the risks associated with them. The book also covers the detailed study of decentralization, mining, consensus, smart contracts, concepts and working of distributed ledgers and hyper ledgers as well as many other important concepts. It also details the security and privacy aspects of blockchain.

The book is beneficial for readers who are preparing for their business careers, those who are working with small scale businesses and startups, and helpful for business executives, managers, entrepreneurs, bankers, government officials and legal professionals who are looking to blockchain for secure financial transactions. The book will also be beneficial for researchers and students who want to study the latest developments of blockchain.

1
Introduction to Blockchain

Akshay Mudgal

GD Goenka University, Sohna, Gurugram, India

Abstract

Since its origin, the blockchain innovation has demonstrated promising application possibilities. From the initial crypto-currency to the current shrewd agreement, blockchain has been applied to numerous fields. In spite of the fact that there are a few investigations on the security and protection issues of blockchain, there comes up short on an efficient assessment on the security of blockchain system. Blockchain, as a decentralized and distributed open record technology in distributed system, has gotten significant consideration recently. It applies a connected square structure to check and store information, and applies the believed agreement instrument to synchronize changes in information, which makes it conceivable to make a sealed advanced stage for putting and sharing information. It is accepted that blockchain can be applied to differing Internet intelligent frameworks (e.g., Internet of Things, flexibly chain frameworks, human identity management and so on). In any case, there are some security challenges that may obstruct the wide utilization of blockchain. For all such in this chapter the broader aspects of privacy issues, decentralisation and regulatory challenges will be parleyed, whereas business models in association with blockchain will also be taken care off with a keen focus on security and privacy aspects of the blockchain.

Keywords: Blockchain, security, privacy, de-centralized, crypto-currency, data theft

1.1 Introduction

Since the presentation of Bitcoin in 2009, its fundamental strategy, blockchain, has indicated promising application prospects and pulled in heaps of considerations from the scholarly community and industry [4]. Being the first digital money, Bitcoin was appraised as the top performing cash in 2015 and the best performing product in 2016, also, has more than 300K affirmed exchanges day by day in May, 2017. Simultaneously, the blockchain system has been applied to numerous fields, including medication, financial matters, Web of things, programming designing, etc. [4]. The presentation of Turing-complete programming dialects to empower clients to create brilliant agreements running on the blockchain marks the beginning of blockchain 2.0 time. With the decentralized accord component of blockchain, keen agreements permit commonly doubted clients to finish information trade or exchange without the need of any outsider confided in power [4]. Ethereum is presently (May of 2017) the most broadly utilized blockchain supporting keen agreements, where there are now 317,506 savvy contracts and in excess of 75,000 exchanges happened day by day [4].

Security comes on the top priority or the at most concern for any piece of action that is needed to be done or auctioned, hence the blockchain comes in a role play (Figure 1.1). Blockchain was basically developed by a group of researchers in the year 1991 to impart or emboss a time stamp on the digital documents but that didn’t work well and the experiment was the failure, due to which today’s psychedelic technology was garbaged [2]. In the year 2004 a computer scientist named Hal Finuey again reintroduced the blockchain with an alteration which was RPOW (Reusable Proof of Work).

A blockchain is a collection of four major components which collectively forms a block [2]. A blockchain is a decentralized, distributed, public ledger. It (blockchain) is a place to keep the record (transactional) which is decentralized as it can be created anywhere, whereas it is accessible anywhere, hence it is distributed, but what about the security aspect? as it can be accessed and created by anywhere and by anyone, which means there is a need to make the concept more feasible and secure.

Figure 1.1 Demonstrating the pictorial impression of blockchain [2].

When it is about privacy and security of any element/product/or a system, then it should have the basic working and the architectural knowledge of it. So, that the level of the security which are already existing can be updated or replaced for the better future [2].

In reference to the second chapter of this book, it explains to us about the working of the Blockchain. In this section of this chapter the basic architecture of the blockchain will be discussed, but moving ahead towards the architecture one should discuss few of the important terms which will be majorly used in the security and privacy aspects of the blockchain.

1. Immutable—Making the ledge secures with the digital signature or hash function.
2. POW—Proof of work, which is a protocol which has the main goal to deterring the cyber attacks.
3. Hash—It is unique value being assigned by the set of rules/algorithms/functions or the combination of all to make the ledger unique and separated from other blocks.
4. Digital Signature—It is another means of securing measure of the ledge, so that the data must be verified and treated as authentic.
5. Mining—Mining in general an activity to collect the useful out of whole.

These are the major terms which we may encounter in this chapter commonly. You will get to know more about these terms in the coming sections of this chapter, but before that the different types of blockchain architectures will be discussed below.

Logically, a blockchain is a chain of blocks which contain specific information (database), but in a secure and genuine way that is grouped together in a network (peer-to-peer) as shown in Figure 1.2. In other words, blockchain is a combination of computers linked to each other instead of a central server, meaning that the whole network is decentralized (Figure 1.3) [3].

Understanding it with the help of a relevant example like work on the Google docs and wait for others to make the necessary changes if required the same scenario is in the decentralized architecture of the blockchain. Blockchain allows and permit us to make the relevant docs shared rather copied [2, 3]. This distributed piece of information (ledger) provides the trust factor and the security of data.

Figure 1.2 The diagrammatic representation of the types of blockchain architecture [3].

Figure 1.3 Figure states the types of blockchains in trend.

Whereas the exact different case is there in the centralized architecture, the information or ledger which was shared is now kept private and shared with the authentic and with those who have required and necessary authority to access the...