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- Herausgeber: John Wiley & Sons
- Kategorie: Wissenschaft und neue Technologien
- Sprache: Englisch
Blockchain for Real World Applications A comprehensive examination of blockchain architecture and its key characteristics Blockchain architecture is a way of recording data such that it cannot be altered or falsified. Data is recorded in a kind of digital ledger called a blockchain, copies of which are distributed and stored across a network of participating computer systems. With the advent of cryptocurrencies and NFTs, which are entirely predicated on blockchain technology, and the integration of blockchain architecture into online and high-security networked spaces more broadly, there has never been a greater need for software, network, and financial professionals to be familiar with this technology. Blockchain for Real World Applications provides a practical discussion of this subject and the key characteristics of blockchain architecture. It describes how blockchain technology gains its essential irreversibility and persistency and discusses how this technology can be applied to the information and security needs of different kinds of businesses. It offers a comprehensive overview of the ever-growing blockchain ecosystem and its burgeoning role in a connected world. Blockchain for Real World Applications readers will also find: * Treatment of real-world applications such as ID management, encryption, network security, and more * Discussion of the UID (Unique Identifier) and its benefits and drawbacks * Detailed analysis of privacy issues such as unauthorized access and their possible blockchain-based solutions Blockchain for Real World Applications is a must for professionals in high-security industries, as well as for researchers in blockchain technologies and related areas.
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Blockchain for Real World Applications
Rishabh Garg
Birla Institute of Technology and Science – Pilani, India
This edition first published 2023
© 2023 John Wiley & Sons, Inc. All rights reserved.
Published by John Wiley & Sons, Inc., Hoboken, New Jersey.
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Library of Congress Cataloging-in-Publication Data
Names: Garg, Rishabh, author.Title: Blockchain for real world applications / Rishabh Garg.Description: Hoboken, New Jersey : John Wiley & Sons, 2023. | Includes index.Identifiers: LCCN 2022041346 (print) | LCCN 2022041347 (ebook) | ISBN 9781119903734 (hardback) | ISBN 9781119903741 (pdf) | ISBN 9781119903758 (epub) | ISBN 9781119903765 (ebook)Subjects: LCSH: Blockchains (Databases) | Electronic funds transfers.Classification: LCC QA76.9.B56 G37 2023 (print) | LCC QA76.9.B56 (ebook)| DDC 005.74--dc23/eng/20220920LC record available at https://lccn.loc.gov/2022041346LC ebook record available at https://lccn.loc.gov/2022041347
Cover image: © Yuichiro Chino/Getty Images
Cover design by Wiley
Set in 9.5/12.5pt STIXTwoText by Integra Software Services Pvt. Ltd, Pondicherry, India
Contents
Cover
Title page
Copyright
Illustrations
Foreword
Preface
1 Introduction
2 Distributed Ledger Technology
2.1 Different Types of Distributed Ledger Technology
2.1.1 Blockchain
2.1.2 Directed Acyclic Graph
2.1.3 Hashgraph
2.1.4 Holochain
2.1.5 Tempo (Radix)
2.2 Chronological Evolution
2.2.1 Blockchain 1.0
2.2.2 Blockchain 2.0
2.2.3 Blockchain 3.0
2.2.4 Blockchain 4.0
2.3 Blockchain Architecture
2.3.1 Block
2.3.2 Hash Function
2.3.3 Encryption
2.3.3.1 Problems
2.3.4 Keys: Public and Private
2.3.5 Decentralized Identifier
3 Blockchain Ecosystem
3.1 Working of Blockchain
3.2 Key Characteristics
3.2.1 Decentralization
3.2.2 Persistence
3.2.3 Anonymity
3.2.4 Auditability
3.3 Unspent Transaction Output
3.4 Classification of Blockchain on Access Management
3.4.1 Public Blockchain
3.4.2 Private Blockchain
3.4.3 Consortium Blockchain
3.5 Consensus
3.5.1 Proof-of-Work
3.5.2 Proof-of-Stake
3.5.3 Peercoin
3.5.4 Practical Byzantine Fault Tolerance
3.5.5 Delegated Proof-of-Stake
3.5.6 Ripple
3.5.7 Tendermint
3.5.8 Consensus Algorithms: A Comparison
3.5.8.1 Node Identity Management
3.5.8.2 Energy Saving
3.5.8.3 Tolerated Power of Adversary
3.5.9 Advances in Consensus Algorithms
3.6 Payment Verification in Blockchain
3.6.1 Simple Payment Verification
3.6.1.1 Key Features
3.6.2 Full Payment Verification
3.6.2.1 Key Features
3.7 Hashgraph
3.7.1 Elements of Hashgraph
3.7.2 Diagrammatic Representation
3.7.3 How Does Hashgraph Work?
3.8 Scalability
4 Transactions in Bitcoin Blockchain
4.1 Coinbase Transactions
4.1.1 Structure
4.1.2 Key Features of Coinbase Transactions
4.1.3 Computation of Transaction Value
4.2 Transactions Involving Fiat Currency
4.2.1 Cryptocurrency Exchanges
4.2.2 Bitcoin Debit Card
4.2.3 Bitcoin ATMs
4.2.4 Metal Pay
4.2.5 Peer-to-Peer Exchanges
4.3 Top Fiat Currencies for Bitcoin Transactions
4.3.1 US Dollar
4.3.2 Japanese Yen
4.3.3 Euro
4.3.4 Korean Won
4.3.5 Chinese Yuan
4.3.6 Indian National Rupee
4.4 Price Determination for Bitcoin in Transactions
4.4.1 Cost of Mining Bitcoin
4.4.2 Market Supply and Demand
4.4.3 Bitcoin Rewards
4.4.4 Exchanges
4.4.5 Competing Cryptocurrencies
4.4.6 Regulatory Provisions
4.4.7 Internal Governance
4.4.8 Value of Bitcoin
4.4.9 Can the Bitcoin Price Be Zero?
4.4.10 Why Is Bitcoin’s Price Volatile?
4.5 Controlling Transaction Costs in Bitcoin
4.5.1 History of Bitcoin Cash
4.5.2 Concerns about Bitcoin Cash
4.5.3 Bitcoin Cash Core Features
4.5.4 Utility of Bitcoin Cash
4.5.5 Advancements over Bitcoin
4.5.5.1 Maximum Block Size
4.5.5.2 Cost Efficiency
4.5.5.3 Smart Contract Support
4.5.5.4 Issue of Token
4.5.5.5 Nonfungible Tokens
4.5.5.6 No Replacement-by-Fee
4.5.5.7 Schnorr Signatures
4.5.5.8 Difficulty Adjustment Algorithm
4.5.6 Bitcoin Cash – Ease of Use
4.5.7 Challenges to Bitcoin Cash
5 Ethereum and Hyperledger Fabric
5.1 Early Attempts to Program Cryptocurrencies
5.2 Smart Contracts
5.3 Working of Ethereum
5.3.1 Gas
5.3.2 Ether
5.4 Hyperledger
5.5 Working of Hyperledger
5.5.1 Components
5.5.2 Workflow
5.5.2.1 Proposal
5.5.2.2 Endorsement
5.5.2.3 Transmission to Ordering Service
5.5.2.4 Updating the Ledger
5.5.3 Industrial Applications of Hyperledger Fabric
5.5.3.1 Production
5.5.3.2 B2B Contract
5.5.3.3 Supply Chain
5.5.3.4 Asset Depository
5.5.3.5 Trading and Asset Transfer
5.5.3.6 Insurance
5.5.3.7 Real Estate
5.5.4 Benefits of Hyperledger Fabric
5.5.4.1 Open Source
5.5.4.2 Private and Confidential
5.5.4.3 Access Control
5.5.4.4 Chaincode Functionality
5.5.4.5 Performance
5.5.4.6 Modular Design
5.6 Ethereum Versus Hyperledger
5.6.1 Purpose
5.6.2 Cryptocurrency
5.6.3 Participation
5.6.4 Privacy
5.6.5 Governance
5.6.6 Computer Code
5.6.7 Smart Contracts
5.6.8 Consensus Mechanism
5.6.9 Rate of Transactions
5.6.10 Use-cases
5.7 Decentralized Applications
5.7.1 Merits of Decentralized Applications
5.7.1.1 Zero Downtime
5.7.1.2 Privacy
5.7.1.3 Resistance to Censorship
5.7.1.4 Absolute Data Integrity
5.7.2 Demerits of Decentralized Applications
5.7.2.1 Maintenance
5.7.2.2 Performance Overhead
5.7.2.3 Network Congestion
5.7.2.4 User Experience
5.7.2.5 Centralization
5.8 Tokens
6 Identity as a Panacea for the Real World
6.1 Identity Systems
6.1.1 Contemporary ID Systems
6.2 Centralized Model
6.2.1 A Case Study of World’s Largest Biometric ID System – Aadhaar
6.2.1.1 Salient Features of Aadhaar
6.2.1.2 Biometric and Demographic Standards
6.2.1.3 Enrollment Set-up
6.2.1.4 Entities and Their Roles
6.2.1.5 Process of Authentication
6.2.1.6 Budget and Outlay
6.2.1.7 Enrollment Status and Saturation
6.3 Cost and Benefits
6.3.1 Merits
6.3.2 Demerits
6.3.2.1 Waste of Resources
6.3.2.2 Lack of Neutrality
6.3.2.3 Technical Glitches
6.3.2.4 Security Procedures
6.3.2.5 Unauthorized Access
6.3.2.6 Absence of Data Protection Act
6.3.2.7 Involvement of Private Players
6.3.2.8 Freedom of Choice as an Illusion
6.3.2.9 Implicit Coercion
6.4 Quest for One World – One Identity
7 Decentralized Identities
7.1 Identity Models
7.1.1 Centralized Identity
7.1.2 Federated Identity
7.1.3 User-centric Identity
7.1.4 Self-sovereign Identity
7.2 Blockchain-based Solutions
7.3 Identity Management
7.3.1 Current Challenges
7.3.1.1 Absence of Compatibility
7.3.1.2 Identity Theft
7.3.1.3 KYC Onboarding and Weak Authentication Protocols
7.3.1.4 Lack of Control
7.4 Identity Storage | Interplanetary File System
7.4.1 How Does IPFS Access the Documents?
7.4.2 Transactions Involved in Accessing Documents on IPFS
7.4.3 IPFS Commands
7.5 Biometric Solutions
7.5.1 Fingerprint Verification
7.5.2 Iris Scan
7.5.3 Vascular Technology
7.5.4 Palm Vein Pattern
7.5.5 Facial Recognition
7.5.1.1 Verification of Government ID
7.5.1.2 Verification of a User
7.5.1.3 Creation of a Digital ID
7.5.2 System Overview
7.5.2.1 Identify Creator
7.5.2.2 Identity User
7.5.2.3 Identity Manager
7.5.2.4 Identity Device
7.5.3 Blockchain Identity Protocol
7.5.3.1 Creation of Digital ID
7.5.3.2 Use of Digital ID
7.5.3.3 Digital ID Management
7.5.4 Security Audit
7.5.4.1 Binding
7.5.4.2 Privacy
7.5.5 Authentication Protocol
7.6 Identity Access
7.6.1 Identity Encryption
7.6.2 Zero Knowledge Proof
7.6.3 Revocation
7.7 Merits of a Proposed System
7.7.1 Seamless Navigation
7.7.2 Accessibility
7.7.3 Easy and Secure
7.7.4 Decentralized Public Key Infrastructure
7.7.5 Decentralized Storage
7.7.6 Manageability and Control
7.7.7 Data Portability
7.7.8 Prevention of Identity Theft
7.8 Disadvantages of the Proposed System
7.8.1 Privacy Leakage
7.8.2 Selfish Mining
7.8.3 Admin Conflicts
7.9 Challenges
7.9.1 Storage Optimization and Redesign
7.9.2 Privacy Protection
7.9.3 Random Beacons and Timestamps
7.10 Solutions with Hyperledger Fabric
7.10.1 Warning Pointers
7.10.2 Safety Protocols
8 Encryption and Cybersecurity
8.1 Cryptography
8.1.1 Different Types of Cryptography
8.1.1.1 Symmetric Key Cryptography
8.1.1.2 Asymmetric Key Cryptography
8.1.1.3 Hash Functions
8.1.2 Cryptographic Schemes
8.1.2.1 Simple Substitution Cipher
8.1.2.2 Caesar Cipher
8.1.2.3 Vigenére Cipher
8.1.2.4 Transposition Cipher
8.2 Playfair Cipher
8.2.1 Encryption Algorithm
8.2.1.1 Step 1 – Generate Squares (5 * 5)
8.2.1.2 Step 2 – Algorithm to Encrypt Plaintext
8.2.2 Decryption Algorithm
8.2.2.1 Step 1 – Generate Squares (5 * 5)
8.2.2.2 Step 2 – Algorithm to Decrypt the Ciphertext
8.2.3 Advantages and Disadvantages
8.2.3.1 Advantages
8.2.3.2 Disadvantages
8.3 Hill Cipher
8.3.1 Substitution Scheme
8.3.1.1 Encryption
8.3.1.2 Decryption
8.4 RSA Algorithm in Cryptography
8.4.1 Working Mechanism
8.4.1.1 Generating the Public Key
8.4.1.2 Generating a Private Key
8.5 Multiple Precision Arithmetic Library
8.5.1 GNU Multiple Precision Arithmetic Library
8.5.2 RSA Algorithm Implementation Using GMP Library
8.5.3 Weak RSA Decryption with Chinese Remainder Theorem
8.6 SHA-512 Hash in Java
8.7 Cybersecurity
8.7.1 Common Cyberattacks
8.7.1.1 Denial-of-Service Attacks
8.7.1.2 Malware
8.7.1.3 Man-in-the-Middle Attack
8.7.1.4 Phishing
8.7.1.5 Structured Language Query Injection
8.7.1.6 Latest Cyberthreats
8.7.2 Key Cybersecurity Features
8.7.3 Blockchain for Cybersecurity
8.7.4 Pros and Cons of Blockchain in Cybersecurity
8.7.4.1 Pros
8.7.4.2 Cons
8.7.5 Real-world Examples
8.7.5.1 Australian Government
8.7.5.2 Barclays
8.7.5.3 Chinese Military
8.7.5.4 Cisco
8.7.5.5 Coinbase
8.7.5.6 Colorado State
8.7.5.7 Founders Bank
8.7.5.8 Health Linkage
8.7.5.9 JP Morgan
8.7.5.10 Mobile Coin
8.7.5.11 Philips Healthcare
8.7.5.12 Santander Bank
8.7.5.13 Wall Street
Reference
9 Data Management
9.1 Data Science
9.1.1 Challenges for Data Scientists
9.1.2 Blockchain-based Solutions
9.2 Education and Employment Verification
9.2.1 Existing Verification Process
9.2.2 Blockchain as an Option
9.2.2.1 Enrollment Process
9.2.2.2 Validation Process
9.2.2.3 Double Layer Encryption
9.2.3 Learner’s Console
9.2.4 Assessment Portal
9.2.5 Background Verification
9.2.5.1 Maintenance of Track Record
9.2.5.2 CV Validation
9.2.5.3 Opportunities for Job Aspirants
9.2.6 Bureaucratic Disintermediation
9.2.7 Advantages of Blockchain-based Verification
9.3 Health Care
9.3.1 Potential Uses in Health Care
9.3.1.1 Digital Health Records
9.3.1.2 Drug Supply Chain
9.3.1.3 Health Insurance
9.3.1.4 Remote Health Monitoring
9.3.1.5 Organ Transplantation
9.3.1.6 Credential Verification
9.3.2 Real-world Use-Cases
9.3.2.1 Akiri
9.3.2.2 Avaneer Health
9.3.2.3 Block Pharma
9.3.2.4 BurstIQ
9.3.2.5 Centers for Disease Control and Prevention
9.3.2.6 Chronicled
9.3.2.7 Coral Health
9.3.2.8 Embleema
9.3.2.9 Factom
9.3.2.10 Guardtime
9.3.2.11 MedicalChain
9.3.2.12 Patientory
9.3.2.13 Professional Credentials Exchange
9.3.2.14 RoboMed
9.3.2.15 Tierion
9.4 Genomics
9.4.1 Real World Use-Cases
9.4.1.1 doc.ai
9.4.1.2 EncrypGen
9.4.1.3 Nebula Genomics
9.5 Food Supply Chain
9.6 Real Estate
9.6.1 Title Management
9.6.2 Smart Assets
9.6.3 Trust and Transparency
9.6.4 Financing
9.6.5 Cost and Efficiency
9.6.6 Tokenization
9.6.7 Pros and Cons of Tokenization
9.7 Crowd Operations
9.7.1 Decentralized Voting (Electoral Process)
10 Banking and Finance
10.1 Banking and Investment
10.1.1 Identity Authentication
10.1.2 Banking Charges
10.1.3 Fast Payments
10.1.4 Withdrawal and Settlements
10.1.5 Credit and Loans
10.1.6 Transfer of Assets
10.1.7 Peer-to-Peer Transfers
10.1.8 Hedge Funds
10.1.9 Fundraising
10.1.10 Enhanced Security
10.1.11 Accountability
10.2 Trade Finance
10.2.1 Smart Contracts
10.2.2 Enterprise Resource Planning
10.2.3 Data Repositories and Registries
10.2.4 Tokenization of Fiat Money
10.2.5 Lightning Network
10.2.6 Pre- and Post-trade Processes
10.2.7 Accounts and Audit
10.2.8 Latent Benefits
10.2.8.1 Decentralization
10.2.8.2 Information Transmission
10.2.8.3 Incorporation of IoT
10.2.8.4 Defense Mechanism
10.2.8.5 Transparency
10.2.8.6 Disintermediation
10.2.8.7 Corporate Lending
10.2.8.8 Cost Efficiency
10.2.8.9 Loyalty Rewards
10.2.9 Impending Challenges and Remediation
10.2.9.1 Security
10.2.9.2 Storage Capacity
10.2.9.3 Block Time
10.2.9.4 Privacy
10.2.9.5 Cyberattacks
10.2.9.6 Robustness
10.2.9.7 Legal Enforcement
10.3 Auction Process
10.4 Decentralized Finance
10.4.1 DeFi Financial Products
10.4.2 Total Value Locked in DeFi
10.4.3 Use Cases for Decentralized Finance
10.4.3.1 Asset Management
10.4.3.2 Tokenization
10.4.3.3 Tokenized Derivatives
10.4.3.4 Decentralized Exchanges
10.4.3.5 Decentralized Autonomous Organization
10.4.3.6 Data Analytics and Assessment
10.4.3.7 Payments
10.4.3.8 Lending and Borrowing
10.4.3.9 Identity
10.4.3.10 Know Your Transactions
10.4.3.11 Insurance
10.4.3.12 Margin Trading
10.4.3.13 Marketplace
10.4.3.14 Gaming
10.4.3.15 Yield Farming
10.4.4 Ethereum as a DeFi Platform
10.4.4.1 Fast Money Transfer around the World
10.4.4.2 Stream Money across the Globe
10.4.4.3 Programmable Money
10.4.4.4 Access Stable Currencies
10.4.4.5 Borrowing
10.4.4.6 Lending
10.4.4.7 No-loss Lottery
10.4.4.8 Exchange Tokens
10.4.4.9 Advanced Trading
10.4.4.10 Fund Aggregation
10.4.4.11 Portfolio Management
10.4.4.12 Quadratic Funding
10.4.4.13 Crowd Funding
10.4.4.14 Insurance
10.5 Prediction Markets
10.5.1 Scope for Decentralized Markets
10.5.2 Real World Examples of Prediction Markets
10.5.2.1 Augur
10.5.2.2 TotemFi
10.5.2.3 Finance.vote
10.5.2.4 OptionRoom
10.5.2.5 Polymarket
10.5.3 Summary
11 Growing Landscape of Blockchain
11.1 Blockchain Applications in Real World: An Overview
11.2 e-Governance
11.3 Supply Chain Management
11.3.1 Data Logging on Ledger
11.3.2 Access to a Ledger
11.4 e-Commerce
11.4.1 Backend
11.4.2 Smart Contracts
11.4.3 Ethereum Front-end
11.4.4 Currency Store
11.5 Distributed Resources and Internet of Things
11.5.1 Tracking and Compliance
11.5.2 Delivery Consignment
11.5.3 Maintenance Record
11.6 Decentralized Streaming
11.6.1 Operative Mechanism
11.6.1.1 Orchestrator
11.6.1.2 Delegators
11.6.1.3 Participation Rewards
11.6.2 Video Mining
11.6.2.1 Dual Mining
11.6.2.2 Trade-offs and Considerations
11.6.2.3 Earnings
11.6.2.4 Rewards
11.6.2.5 Fees
11.6.2.6 Costs
11.6.2.7 Per Pixel Pricing
11.6.2.8 Probabilistic Micropayments
11.6.2.9 Automatic Price Adjustments
11.6.2.10 Transcoding Pools
11.6.2.11 Private Pools
11.6.2.12 Public Pools
11.6.2.13 Selection
11.6.2.14 Economic Security
11.6.2.15 Latency
11.6.2.16 Other Considerations
12 Functional Mechanism
12.1 Software Requirements
12.2 Installing a Mobile Application
12.3 Fetching or Uploading the Documents
12.4 Government or Third-party Access
12.5 Credibility Through Smart Contracts
12.6 User-Optimized Features
Appendices
Glossary
Index
End User License Agreement
List of Figures
Chapter 2
Figure 2.1 Different milestones during...
Figure 2.2 Blockchain – a continuous...
Figure 2.3 An illustration of...
Figure 2.4 Components of a...
Figure 2.5 A cryptographic hash...
Figure 2.6 Asymmetric key encryption...
Figure 2.7 Decentralized identifier (DID...
Chapter 3
Figure 3.1 Working of blockchain...
Figure 3.2 Creating blockchain account...
Figure 3.3 Adding peers on...
Figure 3.4 Checking peer account...
Figure 3.5 Checking account balances...
Figure 3.6 Transacting on the...
Figure 3.7 Key characteristics of...
Figure 3.8 Input and output...
Figure 3.9 Proof-of-work...
Figure 3.10 Limenberg’s representation...
Chapter 4
Figure 4.1 Input of raw...
Figure 4.2 Different subdivisions of...
Figure 4.3 Instance of a...
Figure 4.4 Coinbase transaction: reward...
Figure 4.5 Bitcoin halving
Figure 4.6 Bitcoin debit card
Figure 4.7 Top fiat currencies in the world
Figure 4.8 Bitcoin value
Figure 4.9 Bitcoin hard forks
Chapter 5
Figure 5.2 Working of Hyperledger Fabric
Figure 5.3 B2B working of HPL
Figure 5.4 Comparison between centralized...
Chapter 6
Figure 6.1 Paper identities across the world
Figure 6.2 Digital identities across...
Figure 6.3 Digital identities across...
Figure 6.4 Aadhaar – An identity...
Figure 6.5 Entities involved in...
Figure 6.6 Process of authentication...
Figure 6.7 Budget and expenditure...
Figure 6.8 Numbers of UID...
Figure 6.9 Saturation status (in...
Figure 6.10 Areas, where Aadhaar...
Chapter 7
Figure 7.1 Online identity models...
Figure 7.2 Centralized identity
Figure 7.3 User-centric identity
Figure 7.4 Comparison between the...
Figure 7.5 Characteristics of self...
Figure 7.6 Use cases of...
Figure 7.7 Biometric solution – system...
Figure 7.8 Security audit – binding...
Figure 7.9 Identity and access...
Figure 7.10 Disadvantages of blockchain...
Chapter 2
Figure 8.1 Cipher encryption: If...
Figure 8.2 Cipher encryption: If...
Figure 8.3 Cipher encryption: If...
Figure 8.4 Cipher encryption: Plaintext...
Figure 8.5 Cipher decryption: If...
Figure 8.6 Cipher decryption: If...
Figure 8.7 Cipher decryption: If...
Figure 8.8 Cipher decryption: Ciphertext...
Figure 8.9 Letters (left) and...
Figure 8.10 Hill Cipher encryption...
Figure 8.11 Hill Cipher decryption...
Figure 8.12 Cyber threats (Man...
Chapter 9
Figure 9.1 Blockchain application for...
Figure 9.2 Enrollment process
Figure 9.3 Record management process
Figure 9.4 Validation process
Figure 9.5 Two-layer encryption model
Figure 9.6 Learner’s assessment record
Figure 9.7 Blockchain in healthcare supply chain
Figure 9.8 Food supply chain management
Chapter 10
Figure 10.1 Parties and their role in trade finance
Figure 10.2 Integration of enterprise...
Figure 10.3 Deployment of smart contracts using remix IDE
Figure 10.4 Truffle test for smart contracts
Figure 10.5 Yield.vote as a DeFi platform
Figure 10.6 Augur betting platform
Figure 10.7 TotemFi prediction platform
Figure 10.8 Finance.vote market
Figure 10.9 Finance.vote market
Figure 10.10 OptionRoom market
Figure 10.11 Polymarket
Chapter 11
Figure 11.1 Applications of blockchain...
Figure 11.2 Applications of blockchain...
Figure 11.3 Blockchain for supply...
Figure 11.4 A sample template...
Figure 11.5 Blockchain enabled Internet...
Figure 11.6 Video mining through...
Chapter 12
Figure 12.1 Blockchain-enabled identity
Figure 12.2 Blockchain for recording citizen data
Figure 12.3 Endorsement of documents on user’s profile
Figure 12.4 One World – One Identity
Figure 12.5 Third party access
Figure 12.6 Rise and fall of trust score
List of Code Cells
Chapter 3
3.1 Content of genesis file
3.2 Connected peer node – 1
Chapter 7
7.1 IPFS commands
7.2 App.js logic
7.3 Storing the hashes
7.4 Creation of Digital ID
7.5 Use of Digital ID
7.6 Fingerprint authentication code for iPhone
Chapter 8
8.1 Playfair Cipher – Encryption using C
8.2 Playfair Cipher – Decryption using C
8.3 Encryption and decryption in Hill Cipher using C++
8.4 RSA Asymmetric Cryptography using C
8.5 RSA Algorithms using C
8.6 Chinese Remainder Theorem
8.7 Calculating SHA-512 hash value
Chapter 9
9.1 Voting process using smart contracts
9.2 Decentralized voting process
9.3 Python-based frontend
Chapter 10
10.1 Smart contract code for lending and borrowing (Interface)
10.2 ERC3156 code
10.3 Auction process using smart contracts
10.4 Truffle test for smart contracts
10.5 dApp to implement auction smart contract
10.6 Limit orders in smart contracts
Chapter 11
11.1 e-Commerce app (Backend)
11.2 e-Commerce app (Server.js file)
11.3 Smart contract for currency minting
11.4 Deployment of smart contract by the owner
11.5 Smart contract for Payments (transferring money to admin)
11.6 Ethereum (Frontend)
11.7 Transacting on the dApp using Currency store
List of Tables
Chapter 3
Table 3.1 Comparisons among public blockchain, consortium blockchain, and private bloc...
Table 3.2 Comparisons among Typical Consensus Algorithms.
Chapter 5
Table 5.1 Constants.
Table 5.2 Flow control.
Table 5.3 Computation Fee in Gas Points.
Chapter 6
Table 6.1 Demographic and biometric details collected by UIDAI.
Table 6.2 Different entities and their role in UID cycle.
Chapter 7
Table 7.1 Comparison between a Typical ID Management and a Blockchain ID Management.
Chapter 10
Table 10.1 Global trade pain points and potentials benefits of using blockchain platfor...
Table 10.2 Impact of blockchain on trade finance.
Chapter 11
Table 11.1 Blockchain applications across the real world.
Table 11.2 Use of blockchain across different countries.
Guide
Cover
Title page
Copyright
Table of Contents
Illustrations
Foreword
Preface
Begin Reading
Appendices
Glossary
Index
End User License Agreement
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Illustrations
List of Figures
2.1 Different milestones during the evolution of blockchain
2.2 Blockchain – a continuous sequence of blocks
2.3 An illustration of a block
2.4 Components of a block
2.5 A cryptographic hash function
2.6 Asymmetric key encryption in blockchain
2.7 Decentralized identifier (DID)
3.1 Working of blockchain
3.2 Creating blockchain account
3.3 Adding peers on the blockchain
3.4 Checking peer account
3.5 Checking account balances
3.6 Transacting on the blockchain
3.7 Key characteristics of blockchain
3.8 Input and output UTXOs references
3.9 Proof-of-work – Fault tolerance mechanism
3.10 Limenberg’s representation of hashgraph
4.1 Input of raw data
4.2 Different subdivisions of the raw data
4.3 Instance of a real coinbase transaction
4.4 Coinbase transaction: reward block
4.5 Bitcoin halving
4.6 Bitcoin debit card
4.7 Top fiat currencies in the world
4.8 Bitcoin value
4.9 Bitcoin hard forks
5.1 Working of Ethereum
5.2 Working of Hyperledger Fabric
5.3 B2B working of HPL
5.4 Comparison between centralized and distributed systems
6.1 Paper identities across the world
6.2 Digital identities across the world – North and South America
6.3 Digital identities across the world – Europe, Asia, and Africa
6.4 Aadhaar – An identity based on biometric and demographic data
6.5 Entities involved in UID project
6.6 Process of authentication
6.7 Budget and expenditure of UIDAI (in 10,000,000 INR)
6.8 Numbers of UID (Aadhaar) generated (× 10,000,000)
6.9 Saturation status (in percentage)
6.10 Areas, where Aadhaar is mandatory
7.1 Online identity models: Stages of evolution
7.2 Centralized identity
7.3 User-centric identity
7.4 Comparison between the existing model and the proposed model
7.5 Characteristics of self-sovereign identity
7.6 Use cases of blockchain
7.7 Biometric solution – system overview
7.8 Security audit – binding
7.9 Identity and access management through blockchain
7.10 Disadvantages of blockchain in ID management
8.1 Cipher encryption: If both the letters in the digraph are in the same column
8.2 Cipher encryption: If both the letters in the digraph are in the same row
8.3 Cipher encryption: If none of the rules apply
8.4 Cipher encryption: Plaintext to ciphertext
8.5 Cipher decryption: If both the letters in the digraph are in the same column
8.6 Cipher decryption: If both the letters in the digraph are in the same row
8.7 Cipher decryption: If none of the rules apply
8.8 Cipher decryption: Ciphertext into plaintext
8.9 Letters (left) and corresponding numbers (right) – Hill cipher encryption uses the above scheme of numbers and letters that can be modified as per condition
8.10 Hill Cipher encryption – ACT encrypts to POH
8.11 Hill Cipher decryption – POH decrypts back to ACT
8.12 Cyber threats (Man-in-the-Middle)
9.1 Blockchain application for data science
9.2 Record management process
9.3 Enrollment process
9.4 Validation process
9.5 Two-layer encryption model
9.6 Learner’s assessment record
9.7 Blockchain in healthcare supply chain
9.8 Food supply chain management
10.1 Parties and their role in trade finance
10.2 Integration of enterprise resource planning with blockchain
10.3 Deployment of smart contracts using remix IDE
10.4 Truffle test for smart contracts
10.5 Yield.vote as a DeFi platform
10.6 Augur betting platform
10.7 TotemFi prediction platform
10.8 Finance.vote market
10.9 Finance.vote market
10.10 OptionRoom market
10.11 Polymarket
11.1 Applications of blockchain technology in real world
11.2 Applications of blockchain technology across government departments
11.3 Blockchain for supply chain management
11.4 A sample template of a product profile
11.5 Blockchain enabled Internet of Things
11.6 Video mining through Livepeer
12.1 Blockchain-enabled identity
12.2 Blockchain for recording citizen data
12.3 Endorsement of documents on user’s profile
12.4 One World – One Identity
12.5 Third party access
12.6 Rise and fall of trust score
Code Cells
3.1 Content of genesis file
3.2 Connected peer node – 1
7.1 IPFS commands
7.2 App.js logic
7.3 Storing the hashes
7.4 Creation of Digital ID
7.5 Use of Digital ID
7.6 Fingerprint authentication code for iPhone
8.1 Playfair Cipher – Encryption using C
8.2 Playfair Cipher – Decryption using C
8.3 Encryption and decryption in Hill Cipher using C++
8.4 RSA Asymmetric Cryptography using C
8.5 RSA Algorithms using C
8.6 Chinese Remainder Theorem
8.7 Calculating SHA-512 hash value
9.1 Voting process using smart contracts
9.2 Decentralized voting process
9.3 Python-based frontend
10.1 Smart contract code for lending and borrowing (Interface)
10.2 ERC3156 code
10.3 Auction process using smart contracts
10.4 Truffle test for smart contracts
10.5 dApp to implement auction smart contract
10.6 Limit orders in smart contracts
11.1 e-Commerce app (Backend)
11.2 e-Commerce app (Server.js file)
11.3 Smart contract for currency minting
11.4 Deployment of smart contract by the owner
11.5 Smart contract for Payments (transferring money to admin)
11.6 Ethereum (Frontend)
11.7 Transacting on the dApp using Currency store
Tables
3.1 Comparisons among public blockchain, consortium blockchain, and private blockchain
3.2 Comparisons among typical consensus algorithms
5.1 Constants
5.2 Flow control
5.3 Computation fee in gas points
6.1 Demographic and biometric details collected by UIDAI
6.2 Different entities and their role in UID cycle
7.1 Comparison between a typical ID management and a blockchain ID management
10.1 Global trade pain points and potentials benefits of using blockchain platform
10.2 Impact of blockchain on trade finance
11.1 Blockchain applications across the real world
11.2 Use of blockchain across different countries
Foreword
Mistaken identity has often produced many delightful works in literature starting from the Comedy of Errors by Shakespeare. Alas, the complex world of today does not admit of that luxury. The modern systems developed by governments and businesses all over the world use individual identities for a large number of functions and delivery of services. Every day, millions of people sign up online to carry out a wide range of activities. Users are routinely coerced to disclose their personal identifiable information before allowing access to online services. With each transaction, the user leaves his digital footprints behind, which have the potential to compromise specific personal information. This is why an identity system that is error free and impervious to manipulation and fraud is a prerequisite for the real world.
Blockchain technology, while ensuring a self-sovereign identity, offers a robust and tamper-proof ecosystem to conduct real-world activities, such as education, health care, real estate, transportation, banking, business, trade/finance, supply-chain management, e-commerce, and decentralized streaming.
The present book expounds the multifaceted nature of blockchain technology, its architecture, and key characteristics, such as irreversibility and persistence. The readers will discover the potential use of blockchain technology in all significant walks of life and learn to handle transactional procedures. The narrative is lucid, with great art-work, and is sure to enthuse readers.
The book also provides associated code cells for IPFS commands, creation of digital IDs, encryption and decryption, a decentralized voting process, auction process, e-commerce with a practical stepwise mechanism for readers to attain breakthrough proficiency in the thrust area.
Rishabh Garg, BITS – India has envisioned blockchain as a panacea for building robust identity systems. Though the technology is in its nascent stage, the present book will serve as a beacon to those seeking crystallized knowledge on blockchain. I have no doubts that with its simple handling of a complex subject this book will find inroads to American and European Universities.
Indraneel Shankar Dani
Former Additional Chief Secretary
Chairman, Land Reforms
Government of Madhya Pradesh, India
Preface
The “Tragedy of the Commons” is a long-held belief that people cannot serve their personal interest and the common good simultaneously. Holding to this concept, millions of people worldwide continue to scavenge for basic necessities in the absence of formal identity, despite incomparable technical advancements.
Identity is the nucleus of all human endeavors across the globe, including education, jobs, banking, finance, health care, business, e-commerce, national security, etc. Nevertheless, 1.1 billion people worldwide have no proof of identity, and 45% of those without an identity are among the poorest 20% on the planet. This problem overly affects children and women in rural areas of Asia and Africa. Given this, the author came up with the current concept for an all-inclusive ID in 2016 and originally called it “Generic Information Tracker” (Dainik Bhaskar, 2016). During the platinum jubilee celebrations of the Council of Scientific and Industrial Research (CSIR) at Vijnana Bhawan, New Delhi, India, the author discussed his concept with Mr. Narendra Modi, the prime minister of India. Mr. Modi praised the author’s work and encouraged him to develop the idea for India Vision, 2020.
After working through the complexities, the author presented the breakthrough to scientists, corporate stalwarts, and policy makers at the India International Science Fest, 2016. The author was honored with the Young Scientist Award by the Ministry of Science and Technology, Earth Science, and Vijnana Bharti (Times of India, New Delhi, 2016).
To make the title more explicit, the prototype was renamed as Digital ID with Electronic Surveillance System (Dainik Jagran, 2017). The National Innovation Foundation, Department of Science & Technology, Government of India, registered the inventive project (NIF, 2018), and the author was conferred with the National Award for Outstanding Innovation, 2017 by the honorable president of India, Mr. Ram Nath Kovind at Rashtrapati Bhawan, New Delhi.
During the last five years, the author deliberated upon the feasibility, benefits, and privacy concerns of a single identity model against multiple identity documents. Following an analysis of the security concerns associated with a centralized database, a number of digital identity models were examined with respect to data security, decentralization, immutability, revocation, accountability, auditability, speed, and user control over personally identifiable information. Finally, blockchain seemed to be the most promising solution to readdress nearly all the issues affecting digital identity and access management.
The book provides a thorough understanding of the blockchain ecosystem, framework, essential features, Ethereum, Hyperledger, and cryptocurrencies. This is followed by a comprehensive discussion on the prospective uses of blockchain cryptography, cybersecurity, identity management, credential verification, job validation, health care, remote health monitoring, organ transplantation, genomics, drug supply chain, food and civil supplies, etc. Vibrant illustrations and corresponding code cells have been provided to help readers to comprehend banking, trade, finance, decentralized finance, prediction markets, portfolio management, quadratic funding, crowd funding, e-commerce, etc.
The very purpose of the book is to help readers adopt this embryonic stage of blockchain technology for multiple use cases, whether they are a budding technologist, a start-up enthusiast, or a nontechnical user of decentralized apps.
The author accords his special thanks to Mr. Hari Ranjan Rao, joint secretary, Ministry of Telecom, Government of India; and Mr. Manish Rastogi, principal secretary, Department of Science and Technology, Government of MP for informal discourses, which helped him to resolve the prevalent inadequacies and put together a coherent picture of the decentralized framework.
The foreword of the book has been written by Mr. Indraneel Shankar Dani, former additional chief secretary, and chairman of Land Reforms, Government of Madhya Pradesh, India, to whom the author is deeply grateful.
1 Introduction
Dating back to Babylonian era, the ledger appears to be a bedrock of civilization as the exchange of value always required two unknown people to trust each other’s claims. Even today, we need a common system, which can provide order to the society, keep track of our transactions, establish public trust in it, and maintain it forever.
A blockchain is fundamentally a digital ledger that carries a list of transactions, that could, in principle, represent almost anything – money, digital stocks, cryptocurrencies, or any other asset. Blockchain can follow instructions to buy or sell these assets and implement inclusive set of terms and conditions through so-called smart contracts.
Blockchain differs from a simple ledger in that all transactions are stored in multiple copies on independent computers, individually within a decentralized network, rather than managed by a centralized institution, such as a bank or government agency. Once a consensus is reached, all computers on the network update their copies of the ledger simultaneously. If a node attempts to retroactively add or subtract an entry without consensus, the rest of the network automatically invalidates the entry.
Unlike a traditional ledger, it is governed by complex mathematical algorithms and impregnable cryptography that adds a layer of integrity to the ledger, what Ian Grigg (2005) referred to as triple-entry accounting – one entry on the debit side, another on the credit side, and a third on an immutable, undisputed, shared ledger.
Thus, Distributed Ledger Technology (DLT) is a technical infrastructure and protocol that allows simultaneous access, verification and updating of records in an irreversible manner over a network spanning multiple entities or locations. Blockchain is one of its many forms – Directed Acyclic Graph (DAG), Hashgraph, Holochain, or Tempo (Radix). It is a sequence of blocks containing a complete list of transactions in the form of a digital public ledger that is replicated and distributed throughout the network. The blockchain ecosystem includes blocks – the data structure used to keep records of transactions, which are distributed among all nodes in the network, and nodes – a user or computer that holds a complete copy of the record or ledger.
The blockchain technology was first mentioned by Stuart Haber and W. Scott Stornetta in 1991. However, Satoshi Nakamoto, a person who goes by the alias, popularized it in 2008 to operate as the public transaction ledger of Bitcoin. Over the past one decade and a half, there have been innovations around blockchain consensus mechanisms, constitutional design, programmable smart contracts, and tokens. Blockchain 1.0 applications were mainly limited to digital currencies, which were used in commercial transactions, foreign exchange, gambling, and money laundering. The expansion of Blockchain 2.0 applications enabled smart-contracts, decentralized applications (dApps), and Decentralized Autonomous Organizations (DAO). Blockchain 3.0 was able to register its presence in areas, such as education, health, science, transportation, and logistics in addition to currency and finance, and now Blockchain 4.0 is evolving as a business-friendly ecosystem for the world of commons. The integration of blockchain with emerging technologies like Internet of Things, cloud, artificial intelligence, and robotics is one of the biggest promises of the times to come.
Blockchain is typically classified into public, private, and consortium blockchain. A public blockchain is a permissionless blockchain in which any user, whosoever wishes to transact with the network, can participate and write on the blockchain. A private blockchain only allows nodes coming from a specific organization to participate in the consensus process. That’s why it is also called permissioned blockchain. A consortium blockchain is a semi-private system in which a group of like-minded companies leverage cross-company solutions to improve workflow, accountability, and transparency.
Blockchain, irrespective of its type, uses an asymmetric cryptography mechanism to validate the authenticity of transactions. It is basically a network of participants that share nodes for common business purpose and process. Each block of the blockchain contains about 1 MB of data. This block stores the information chronologically until its 1 MB data capacity is occupied, and then the second block repeats the same process. All these blocks join in a sequence, and to do this, each block gets a unique hash that exactly matches the string of data in that block. If anything inside a block changes, even to a little extent, the block gets a new hash.
In a blockchain, this hash is created by a cryptographic hash function. A cryptographic hash function is a complex algorithm that takes any string of input and turns it into a 64-digit string of output. A hash is not always qualified. A block on the blockchain will only be accepted if its hash starts with at least ten consecutive zeros. A small, specific piece of data is added to each block called a nonce. The process of repeatedly altering and hashing a block’s data to find a suitable hash is called mining, and this is what miners do. Miners spend a lot of electricity in the form of computational power by constantly changing the block structure (nonce) and hashing it until a qualified signature (output) is found. The more computational power they have, the faster they can hash different block compositions to find a qualified hash.
The process (hash function) used here that converts any information into a string of alphanumeric values (hash), is called encryption. There are mainly two types of encryption – asymmetric encryption and symmetric encryption, depending on whether the same or different keys are used for encryption and decryption. Cryptocurrencies use blockchain to achieve the benefits of a public ledger as well as an advanced cryptographic security system so that online transactions are always chronicled and secure. Transactions are simply data that indicate the flow of cryptocurrency from one wallet to another.
In order to record the flow of currency or data from one wallet to another in an immutable form, nodes communicate with one another to reach consensus on the records of the ledger. However, the transaction is accepted only if majority of the nodes agree on its validity. When all nodes reach a consensus, transactions are recorded on a new block and added to the existing chain. While Bitcoin focused on decentralized payments, Vitalik Buterin and his collaborators introduced arbitrary computer code into the blockchain using transactions. Thus, Ethereum came into being as a peer-to-peer network where each node runs an operating system called the Ethereum Virtual Machine. This securely executes and verifies application code, hitherto called smart contracts, and allows participants on the blockchain to transact with each other without a trusted central authority.
Smart contracts are used for the automation of common centralized processes, such as conditional transfer of digital assets, multisig asset exchange, or waiting for a specific amount of time to execute a transaction. It allows the creation of decentralized applications for B2C trades whereas B2B transactions, which need to keep their data secure and confidential, can adopt Hyperledger. Hyperledger offers a modular architecture that delivers a high degree of privacy, resilience, and scalability. It is an enterprise-level private blockchain network that enables several business entities – such as banks, corporate institutions or trade establishments – to transact with each other.
Thus, digital transactions can be decentralized, encrypted, and held securely on a distributed ledger. It has the potential to cut millions of hours spent on administrative processes every year and bring efficiency through smart contracts in all walks of life. The present book explicates the unrestrained functionality of blockchain and its application in the real world.
It’s a well-known fact that identity is the nucleus of all the activities in the world. In a civilized society, identity entitles the individual to discharge his rights and responsibilities. Over the centuries, governments around the world issued a variety of identity documents to enable citizens to make access to education, health care, business activities, pensions, banking, social benefits, and state welfare schemes.
Many countries issued identity numbers for a singular purpose, but in due course of time, they became a de facto national identification number. In order to provide an official identity to every citizen of India, the Department of Information Technology, Government of India, introduced a biometric-enabled, unique identification number (UID). This project has listed over a billion users with an estimated expenditure of 130 billion INR, till date (UIDAI, 2022). India’s Unique Identification System, called Aadhaar, has been taken as a case study to deliberate over the advantages and disadvantages of a centralized identity model in light of privacy issues, unconstitutional access, absence of data-protection laws, involvement of private partners, etc.
The UID project was expected to portray a more accurate picture of Indian residents and enable them to have hassle-free access to government schemes and public services, but the ground reality has been far from such claims. First of all, the technological framework for such a large database is not available in the country; and second, the Indian bureaucracy is not technically smart enough to handle such big data with burgeoning privacy and data-security issues in India. Also, the lack of interoperability between departments and government levels takes a toll in the form of excess bureaucracy, which, in turn, increases processing time and cost.
At present, the system preserves the personally identifiable information (PII) of millions of users on a centralized government database, supported by some legacy software, with numerous single points of failure (SPoF). Such a centralized system, containing PII, acts like a honeypot to hackers. Following the reports of prevalent data breaches and continuing threats to online data over the past decade, the security of digital identities has emerged as one of the foremost concerns on the national front. Today, a user has to juggle various identities associated with his username across different websites. There is no consistent or homogenous way to use the data generated by one platform on the other. The most threatening and frustrating experience is that a digital identity arises organically from the personal information available on the web or from the shadow data created by a user’s online activities, on a day-to-day basis. The fragile links between digital and offline identities make it relatively easy to create pseudonymous profiles and fake identities, for enactment of fraud.
In a world where a number of vulnerable citizens, not having an identity or bank account, but own a smartphone, echoes the possibility of a mobile-based, digital-identity solution. Due to the increasing sophistication of smartphones, advances in cryptography, and the advent of blockchain technology, a new identity management system can be built on the concept of decentralized identifiers (DID).
Decentralized identity is an approach to identity management that allows individuals to store their credentials and personally identifiable information in an application called a wallet. In such a system, passwords are replaced with non-phishable cryptographic keys that validates identities for business activities while securing users’ communications.
Detailing the models of decentralized identity – federated, user-centric, and self-sovereign – the present book explores the likelihood of storing and managing identity credentials and information in an interplanetary file system or wallet through a blockchain-based solution. Blockchain assures citizens, organizations, and service providers that big data is never stored in a single repository, rather distributed among decentralized databases. Users, without being physically present, can share their digital ID with the service provider through a personal device, such as a smartphone, and receive appropriate services without jeopardizing their privacy.
Further, all the documents that identify users get stored on their personal devices backed by IPFS, making them safe from data breaches. No transaction of user’s information would occur without the explicit consent of the user. It will permit the user to control his personally identifiable information, make the system more interoperable, allow the user to employ data on multiple platforms, and protect the user from being locked into one platform. Thus, blockchain would allow people to enjoy self-sovereign and encrypted digital identities, replacing the need for creating multiple usernames and passwords.
Blockchain identity management can help people to create, manage, verify, and authenticate their identity in real-time. It can provide relief to billions of people holding multiple cards for specific purposes. A single ID (One World – One Identity) comprising 20 digits could be provided to all on the day of census. The Digital ID System (IPFS/Private Ledger) would record all substantive data of a citizen, like digital identity number, citizen name, date of birth, family details, photo, biometric details, digital signature, educational progress, employment details, driver’s license, financial details, passport, visa, medical records, etc. in a distributed ledger like blockchain. While millions of transactions are recorded across hundreds of nodes scattered over thousands of financial institutions, notwithstanding any geographical or political boundaries; likewise, all identity documents from different administrative organizations can be recorded using a private key (Garg, 2019, 2021). The difference between a private key and a public key is that a private key, also called a secret key, is a variable that can be used to both encrypt and decrypt data, whereas a public key is a big numerical number that can only be used to encrypt data.
The main purpose of encryption is that it allows only the actual sender of the message and the intended recipient to read the pertinent information. There has been several milestones in the history of cryptography that led to the formation of the fundamentals of modern algorithms. In early times the cipher was the fundamental component for communicating secret messages, which included letters as a basic element. A few of its variants include Simple Substitution Cipher, Caesar Cipher, Vigenere Cipher, Transposition Cipher, Playfair Cipher, and Hill Cipher. In addition, many cryptographic algorithms, such as the RSA algorithm, Multiple Precision Arithmetic Library, GNU Multiple Precision Arithmetic Library, Chinese Remainder Theorem, and Secure Hashing Algorithm (SHA-512) Hash in Java have also been popular.
Just as encryption protects any data from misuse, cybersecurity protects systems and networks from digital attacks. The cyber-attack landscape has grown exponentially in the last few years. Cyberattacks are carried out by using various malware like Trojans, Rootkits, Virus, etc. and are known as Distributed Denial of Service (DDoS) attack, Man in the Middle (MITM) attack, phishing, Ransomware attack, and Structured Language Query (SQL) injection. Blockchain has emerged as a promising mitigation technology for cybersecurity.
Once an identity management is set up and cryptographically protected, the Ethereum blockchain can allow a credential holder to share all his academic credentials with validators in an encrypted format. The system uses smart contracts, and thus, no document can be shared without the explicit consent of its holder. Thus, blockchain can prove to be a good tool for background verification of a candidate, thereby saving time, cost, and human resources spent on verification and evaluation.
Apart from academic verification, blockchain has a wide range of applications and uses in health care as well. It helps secure the transfer of patient medical records, manage drug supply chains, and unlock biological and genetic codes for health researchers. Besides, there has been a spurt in efforts to scale-up the capabilities of blockchain for decentralized voting and the food supply. Blockchain lets the journey of food items to be tracked directly from the farm to the shelves of the superstore. Many issues, such as food fraud, security recalls, and supply chain inefficiencies, can be solved through blockchain-enabled food traceability.
There has also been an unprecedented boom in the banking and finance industry in the wake of blockchain technology. Blockchain makes it easy for remote untrusted parties to build consensus on the state of a database, without the intervention of gatekeepers. It can handle all financial transactions like payments, settlement systems, fundraising, securities management, loans, credit, and trade finance, etc. like a bookkeeper. This is the reason why it surpasses the traditional system in terms of identity verification, payments, withdrawals, settlements, credits and loans, asset transfers, peer-to-peer transfers, hedge funds, safety, and accountability.
Another area that is poised for a blockchain revolution is trade finance. Trade finance relies heavily on paper-based business operations involving information transmission, asset transfer, and payment processes. Instead of legal terms, these contracts may be better described in Python programming language so that traders can better understand them. Thus, blockchain, along with smart contracts, provides a secure, transparent, auditable, and automated transaction environment for business investors. It has a potential to revolutionize trade finance by rationalization of the processes of smart contracts, enterprise resource planning, lightning network, pre- and post-trade processes, accounts and audits, loyalty rewards, etc.
Beyond the precincts of existing financial networks, decentralized finance (DeFi) is a blockchain-based fintech, which is altogether open and programmable. In the present book, the product and potential of myriad use-cases of decentralized finance, such as asset management, tokenization, token derivatives, decentralized autonomous organization, data analysis and assessment, payments, lending and borrowing, insurance, margin trading, market place, gaming, and yield farming have been delineated. It also outlines Ethereum as a platform for DeFi to transfer funds, streaming money, programmable currency, lending, borrowing, no-loss lotteries, exchange tokens, advance trading, fund aggregation, portfolio management, quadratic funding, crowd funding, and insurance.
The blockchain landscape is expanding quickly, spanning over all facets of the real world, such as agriculture and natural resources, animal husbandry, air travel, billing and payments, construction, drugs supply, entertainment, fisheries, food and drink, gambling, human resource management, information and communications, infrastructure and energy, insurance, Internet of Things, legal enforcement, public assistance, medical claim settlement, messaging, hospitality, postal services, production, public transport, real estate, ride hailing, shipping and freight transport, taxation, travel and mobility, vaccination and community health, vehicles, welfare distribution, and wills and inheritances.
Many nations have tried to create their own e-governance systems to deliver essential civic services during the past few decades, but majority of them ran into privacy and security issues. Blockchain can resolve these issues and assist government agencies to lower labor costs, save time, and enhance operational efficiency.
Another area, the supply chain, is also becoming increasingly more complex, more elaborate, and more global. Due to a serious business restriction called supply chain visibility, most businesses have little to no awareness about their second- and third-tier suppliers. Better results may be expected if blockchain technology is implemented in the supply chain. To trace the product’s origins and manufacturing processes, the supply chain can use a shared, consensus-based public ledger. Blockchain may offer certification and documentation, including information about the product lifecycle, and make it instantly available to all parties. Products can be tracked from factory to storage, transit, delivery, and sale.
Further, e-commerce establishments can leverage the advantages of Ethereum. It is a platform for those e-commerce brands who desire to manage their own blockchain through apps that accept Bitcoin payments. The introduction of blockchain technology into e-commerce will help users to track their purchase orders, store product, and service warranties, and gain access to the data. At the same time, it enables businesses to combine services like payment processing, inventory control, product description, etc. to evade the cost of buying and maintaining separate systems. It can speed up tracking, compliance, maintenance, and delivery of goods by integrating the Internet of Things.
The main advantage of blockchain applications is that almost all of the software, including Hyperledger fabric, are open source, and most of them are designed to work on Linux. Virtual machines or Docker containers can also be used to execute them on Windows. In the present book, blockchain operations have been explained in a vivid and engaging way. By using their private key, a user can quickly create an account on the blockchain. They may then download the smartphone application from the Play Store. The user can self-certify their information using this software, which will retrieve personal information from the supplied ID. Alternately, the user may submit their credentials, which include name, date of birth, location, parents’ names, address, and biometric data (DNA map, finger impression, retinal image, blood sample, etc.).
A government agency may at any moment access the user’s information for authentication purposes. The authorities may use text messages to ask the identity holder for access to certain information. Business logic in smart contracts will produce a credibility score for the user. The higher the score, the higher is the credibility of the individual. Consequently, a banker and a customer, sitting on two sides of the globe, can automate the transfer of money on their decentralized software, thanks to cryptography and smart contracts that run on Ethereum. Distributed record-keeping and algorithmic consensus, two of blockchain’s fundamental properties, are thus primed to allow entrepreneurs to create and implement decentralized apps that have the potential to change the world.
References
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