Blockchain Technology for the Engineering and Service Sectors E-Book

• Herausgeber: John Wiley & Sons
• Kategorie: Wissenschaft und neue Technologien
• Sprache: Englisch

Seitenzahl: 683

Veröffentlichungsjahr: 2025

Beschreibung

Blockchain Technology for the Engineering and Service Sectors is essential for anyone looking to understand how to harness blockchain technology, driving innovation and efficiency across various sectors

Blockchain technology stands as one of the most transformative innovations of the 21^st century, significantly impacting sectors including finance, manufacturing, and the service industry. Despite its relatively recent emergence, blockchain has the potential to revolutionize a wide array of industries, including tourism, agriculture, healthcare, and automobiles. With the growing interest in decentralized finance, governments and businesses are increasingly investing in research and development to enhance blockchain’s capabilities. As the technology continues to evolve, we can expect even more ground-breaking advancements in the near future.

Blockchain Technology for the Engineering and Service Sectors is designed to provide a comprehensive exploration of blockchain technology, divided into two key areas of study. The first section delves into the history and technical evolution of blockchain, tracing its development from the inception of Bitcoin to its integration with other advanced technologies like the Internet of Things. The second section focuses on the frameworks and applications of blockchain, examining its use across various industries, including supply chain management, tourism, banking, healthcare, and automation. Additionally, the book addresses current challenges, emerging trends, and the future potential of blockchain technology. Through a detailed and structured presentation of these topics, readers will gain a deep understanding and expertise in the field of blockchain technology.

Audience

Researchers, engineers, and industry professionals working in research and development to explore the possibilities of blockchain.

Leseprobe

Table of Contents

Cover

Table of Contents

Series Page

Title Page

Copyright Page

Preface

1 Decoding the Blocks: A Comprehensive Introduction to Blockchain

1.1 Introduction

1.2 The Evolution of Blockchain

1.3 Exploring the Peculiar Characteristics of Blockchain

1.4 Structure of Blockchain Technology

1.5 Types of Blockchain

1.6 Applications of Blockchain

1.7 Factor Consideration for Blockchain Adoption

1.8 The Future Research Directions of Blockchain in Information Systems

1.9 Conclusion

References

2 Challenges and Opportunities of Blockchain

2.1 Introduction

2.2 Challenges of Blockchain Technology

2.3 Opportunities and the Future of Blockchain Technology

2.4 Applications of Blockchain by Field

2.5 Summary

References

3 Blockchain–SDN-Based Secure Architecture for Multi-Edge Computing in Industrial IoT

3.1 Introduction

3.2 Background and Literature Review

3.3 The Promise of Blockchain and SDN for Industrial IoT

3.4 Proposed Architecture for Blockchain–SDNBased Multi-Edge Computing

3.5 Use Cases and Simulations

3.6 Conclusions

References

4 Enhancing Decentralized Privacy Through Integration of Blockchain with IoT for Healthcare Applications

4.1 Introduction

4.2 Related Work

4.3 Technical Overview of IoT, Blockchain, and Its Integration

4.4 Implementation Framework: Integrating Blockchain and IoT in Healthcare

4.5 Various Applications of Blockchain and IoT in Healthcare

4.6 Decentralization and Data Privacy of Blockchain and IoT in Healthcare

4.7 Challenges of Using Blockchain in HealthcareDerived Industrial IoT

4.8 Conclusions

References

5 Blockchain with Cloud Computing

5.1 Introduction

5.2 Related Works

5.3 Summary of Resource Allocation Models Based on Blockchain Technology in the Context of Cloud Computing and Decentralized Edge Computing

5.4 Machine Learning Model in Blockchain Technology

5.5 Benefits of Blockchain for IoT Applications

5.6 IoT Applications Leveraging Blockchain

5.7 Security and Privacy Concerns

5.8 Challenges in Blockchain Networks

5.9 Security Challenges

5.10 Conclusions

References

6 Transforming Healthcare: The Role of Blockchain Technology

6.1 Introduction

6.2 Evolution of Blockchain and Healthcare

6.3 How Blockchain Works in Healthcare

6.4 Mechanisms of Blockchain

6.5 Applications of Blockchain in Healthcare

6.6 Types of Blockchain

6.7 Blockchain Technology’s Benefits for the Healthcare Sector

6.8 Blockchain Connected with Other Technologies

6.9 Benefits of Leveraging Blockchain Technology in the Healthcare Industry

6.10 Challenging Aspects of Adopting Blockchain in Healthcare

6.11 Conclusions

References

7 Revolutionizing Finance: The Power of Blockchain in Banking

7.1 Introduction

7.2 Types of Blockchain

7.3 Advantages of Blockchain in Banking

7.4 Blockchain in Banking

7.5 Review of Literature

7.6 Blockchain Applications in Banking

7.7 Impacts of Blockchain in Banking

7.8 Challenges of Implementing Blockchain in Banking

7.9 Blockchain in Indian Banking

7.10 Future of Blockchain

7.11 Conclusions

References

8 Blockchain and a Revolution in the Food Industry

8.1 An Introduction to the Food Supply Chain

8.2 Introduction of Blockchain and the Structure and Its Components

8.3 The Role of Blockchain in the Food Industry

8.4 Effective Indicators of Blockchain in the Food Industry

8.5 Blockchain in the Food Industry: Use Cases

8.6 Barriers to Adopting Blockchain in the Food Supply Chain

References

9 Blockchain Technology and the Transformation of the Agricultural Industry

9.1 An Introduction to the Agricultural Industry

9.2 Blockchain Solutions and Benefits in the Agricultural Industry

9.3 The Main Drivers of Blockchain Deployment in the Agricultural Industry

9.4 The Application of Blockchain in Various Operations of the Agricultural Industry

9.5 Blockchain Technology and Motivation for Sustainable Ways

References

10 Transforming Tourism: Exploring the Potential of Blockchain Technology

10.1 Introduction

10.2 Blockchain

10.3 Evolution of Blockchain and Tourism

10.4 Features of Blockchain in Tourism

10.5 Blockchain Works in Tourism

10.6 Advantages of Blockchain Technology in the Tourism Industry

10.7 Challenges of Blockchain Technology in Tourism Industry

10.8 Future Trends of Blockchain in the Tourism Industry

10.9 Case Study

10.10 Conclusions

References

11 Application of Blockchain in the Manufacturing Sector

11.1 Introduction

11.2 Tools in the Manufacturing Industry

11.3 Blockchain Technology

11.4 Challenges in the Manufacturing Sector

11.5 Adoption and Integration of Blockchain in Manufacturing

11.6 Blockchain’s Impact on Manufacturing: Technical and Practical Frameworks

11.7 Navigating Implementation Complexities

11.8 Security Measures for Blockchain in Manufacturing

11.9 Potential and Future Developments

11.10 Summary

References

12 Blockchain Integration: Transforming the Automotive Landscape

12.1 Introduction

12.2 Background for Research

12.3 Blockchain Technology

12.4 Components of Blockchain in Automobile Industry

12.5 Blockchain Implementation in Automobile Industry

12.6 Challenges of Blockchain in Automobile Industry

12.7 Benefits

12.8 Disadvantages

12.9 Major Challenges of Automobile in Current Scenario

12.10 Real-Time Case Implementation in Automobile

12.11 Blockchain-Based Automotive Startups

12.12 Indian Regulatory and Legal Terrain for Blockchain

12.13 Conclusions

References

Index

End User License Agreement

List of Tables

Chapter 3

Table 3.1

Parameters of the simulation environment grouped by reference techno...

Chapter 5

Table 5.1

Blockchain smart contract categories.

Chapter 7

Table 7.1

List of literatures reviewed.

Chapter 11

Table 11.1

Comparing blockchain consensus protocols.

Table 11.2

Challenges and strategies for implementing blockchain in manufactur...

Table 11.3

Trends in blockchain technology and manufacturing.

Chapter 12

Table 12.1

Detailed description with adopted feature of blockchain in real-tim...

List of Illustrations

Chapter 1

Figure 1.1 History of blockchain adopted from Guo and Yu [13].

Figure 1.2 Fundamental structure of BCT (adopted from Min [44]).

Figure 1.3 A general blockchain-layered architecture adopted from Xie

et al

. [...

Figure 1.4 An overview of the blockchain’s underlying technology (adopted from...

Figure 1.5 An example of a blockchain adopted from Perera

et al.

[28].

Figure 1.6 Types of blockchains.

Chapter 2

Figure 2.1 Challenges of blockchain technology.

Figure 2.2 Ecosystems.

Chapter 3

Figure 3.1 Proposed architecture of blockchain-enabled SDN–IoT ecosystem.

Figure 3.2 Throughput vs. number of nodes in SDN Openflow nodes and the propos...

Figure 3.3 Packet arrival rate vs. bandwidth in the SDN architecture with BC.

Figure 3.4 Bandwidth based on the BCF model and our proposed architecture.

Chapter 4

Figure 4.1 Architecture of IoT.

Figure 4.2 Proposed framework.

Figure 4.3 Wearable medical devices.

Chapter 5

Figure 5.1 Structure of cloud computing.

Figure 5.2 Tree structure of blockchain with cloud.

Figure 5.3 Integrated blockchain with cloud.

Figure 5.4 Deployment of ML in blockchain.

Figure 5.5 Integration challenges of blockchain and machine learning.

Figure 5.6 Blockchain characteristics.

Chapter 6

Figure 6.1 How blockchain works (adopted from Ng

et al.

, [1]).

Figure 6.2 Characteristics of blockchain (adopted from Hasselgren

et al.

, [12]...

Figure 6.3 Mechanism of blockchain in healthcare.

Figure 6.4 How blockchain works in healthcare (adopted from Taloba

et al.

, [15...

Figure 6.5 How blockchain works in healthcare (adopted from Farouk

et al.

, [16...

Figure 6.6 How blockchain works (adopted from Namasudra S.

et al.

, [17]).

Figure 6.7 Blockchain in electronic health records (adopted from Shahnaz

et al

...

Figure 6.8 Blockchains in pharmaceutical industry and research (adopted from Z...

Figure 6.9 Blockchain in clinical trials (adopted from Kumar

et al.

, [8]).

Figure 6.10 Blockchain in supply chain and counterfeit drug detection (adopted...

Figure 6.11 Blockchain in dentistry (adopted from Hassani

et al.

, [30]).

Figure 6.12 Organ transplantation and blood donation (adopted from Soltaniseha...

Figure 6.13 Blockchain technology’s benefits for the healthcare sector (adopte...

Figure 6.14 Application of blockchain with cloud computing (adopted from Adere...

Figure 6.15 Benefits of leveraging blockchain technology in the healthcare ind...

Figure 6.16 Challenging aspects of adopting blockchain in healthcare (adopted ...

Chapter 7

Figure 7.1 Generic blockchain architecture (adopted from Mehrotra

et al.

, 2020...

Figure 7.2 Work flow of blockchain.

Chapter 10

Figure 10.1 Evolution of blockchain (retrieved from Mourtzis

et al.

[4]).

Figure 10.2 Working of blockchain (adopted from Chirag [6]).

Figure 10.3 Working of blockchain in the tourism industry (adopted from Balasu...

Figure 10.4 Blockchain technology in tourism (adopted from Erceg

et al.

[10]).

Figure 10.5 Blockchain works in tourism (adopted from Chirag [6]).

Figure 10.6 Transaction workflow in blockchain (adopted from Euromoney [13]).

Chapter 11

Figure 11.1 Blockchain models.

Figure 11.2 Guiding strategies for effective integration of blockchain in manu...

Figure 11.3 Blockchain’s impact on manufacturing.

Chapter 12

Figure 12.1 Typical automotive supply chain.

Guide

Cover Page

Series Page

Title Page

Copyright

Preface

Table of Contents

Begin Reading

WILEY END USER LICENSE AGREEMENT

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Scrivener Publishing100 Cummings Center, Suite 541JBeverly, MA 01915-6106

Publishers at ScrivenerMartin Scrivener ([email protected])Phillip Carmical ([email protected])

Blockchain Technology for the Engineering and Service Sectors

Edited by

V. Vaishnavi

Dept. of Management Studies, Kongu Engineering College, Tamil Nadu, India

R. Rajasekar

Dept. of Mechanical Engineering, Kongu Engineering College, Tamil Nadu, India

C. Moganapriya

School of Mechanical Engineering, Vellore Institute of Technology, Chennai, India

and

P. Sathish Kumar

Academic Enhancement Department, King Mongkut’s University of Technology North Bangkok, Bangkok, Thailand

This edition first published 2025 by John Wiley & Sons, Inc., 111 River Street, Hoboken, NJ 07030, USA and Scrivener Publishing LLC, 100 Cummings Center, Suite 541J, Beverly, MA 01915, USA© 2025 Scrivener Publishing LLCFor more information about Scrivener publications please visit www.scrivenerpublishing.com.

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Library of Congress Cataloging-in-Publication Data

ISBN 978-1-394-23800-2

Front cover images supplied by Adobe FireflyCover design by Russell Richardson

Preface

Blockchain technology is one of the most revolutionary innovations of the 21st century, impacting a wide range of sectors, from finance and manufacturing to healthcare and entertainment. Despite its relatively brief history, blockchain has rapidly evolved beyond its origins in cryptocurrency to become a versatile tool with applications across numerous industries. This swift evolution, coupled with the growing interest in decentralized finance, has driven governments, businesses, and researchers to explore blockchain’s full potential, pushing the boundaries of what this technology can achieve.

This book provides a comprehensive exploration of blockchain technology, focusing on two key areas. The first section delves into the history and technical foundations of blockchain, tracing its development from the inception of Bitcoin to its integration with advanced technologies such as the Internet of Things (IoT). This part aims to equip readers with a solid understanding of blockchain’s technical aspects, fostering a deeper appreciation of how it operates and continues to evolve.

The second section shifts focus to the practical applications and frameworks of blockchain technology. We examine its implementation across various industries, including supply chain management, retail, banking, healthcare, food, tourism, and automation. By analyzing these real-world applications, we highlight blockchain’s transformative impact and its potential to reshape traditional business models. This section also explores the current challenges facing blockchain technology, as well as its future prospects, offering insights into where the field may be headed in the coming years.

Through this book, we aim to provide a well-rounded guide to blockchain technology, blending theoretical concepts with practical applications. Our goal is to equip readers—whether students, researchers, professionals, or enthusiasts—with the knowledge and tools necessary to understand and leverage blockchain in diverse contexts. By the end of this book, readers should have a thorough grasp of blockchain technology, its evolution, and its vast potential across multiple industries.

We extend our deepest gratitude to Martin Scrivener and the Scrivener Publishing team for their unwavering support in bringing this book to life. We hope this work serves as a valuable resource in the ever-evolving field of blockchain technology and inspires further exploration and innovation.

V. VaishnaviR. RajasekarC. MoganapriyaP. Sathish Kumar

March 2025

1Decoding the Blocks: A Comprehensive Introduction to Blockchain

Vaishnavi Vadivelu1*, R. Rajasekar2 and Mogana Priya Chinnasamy3

1Department of Management Studies, Kongu Engineering College, Perundurai, Erode, Tamil Nadu, India

2Department of Mechanical Engineering, Kongu Engineering College, Perundurai, Erode, Tamil Nadu, India

3School of Mechanical Engineering, Vellore Institute of Technology, Chennai Campus, Chennai, India

Abstract

Blockchain technology (BCT) ensures network security, visibility, and transparency by combining special characteristics such a decentralized structure, storage mechanism, distributed nodes and consensus algorithm, smart contracts, and asymmetric encryption. Numerous industries, including energy supply companies, startups, technology developers, financial institutions, national governments, and academics, have expressed a great deal of interest in it. Numerous sources have identified blockchains as a major source of innovation and advantages. They offer safe, transparent, and tamper-proof platforms that enable new business solutions, especially when combined with smart contracts. This current chapter delves into the intricacies of blockchain, exploring its fundamental structure, operational intricacies, defining traits, historical evolution, broad applications, diverse types, implementation nuances, and future prospects. Starting with an examination of its core architecture and operational mechanisms, the chapter clarifies the decentralized nature, cryptographic foundations, and immutable ledger underlying blockchain functionality. Through a retrospective lens, it traces blockchain’s evolution from its inception alongside Bitcoin to its current status as a disruptive force across industries. Real-world case studies and theoretical frameworks illustrate blockchain’s diverse applications, extending beyond cryptocurrencies to transform sectors like finance, supply chain management, and healthcare. Additionally, the chapter categorizes blockchain types and assesses key factors affecting their implementation, including scalability, interoperability, regulatory frameworks, and sustainability considerations. Looking forward, the chapter offers insights into blockchain’s future trajectory, foreseeing ongoing innovation, experimentation, and collaboration driving new possibilities. Anticipating widespread adoption as blockchain matures and trials yield successful outcomes, the chapter predicts its transformative impact on society will continue to grow. In summary, this book chapter serves as a comprehensive resource for understanding BCT providing valuable insights for policymakers, practitioners, researchers, and enthusiasts. By elucidating its structure, mechanics, history, applications, types, implementation factors, and future prospects, the chapter underscores blockchain’s profound implications in shaping the future of technology and society.

Keywords: Blockchain, cryptocurrencies, decentralization, transparency, immutable ledger, evolution, applications, implementation

1.1 Introduction

The foundational principles and ideas behind BCT have roots dating back to the 1980s. Digital signatures on documents were made possible in 1991 by the use of a chain of information as an electronic record. By the early 2000s, this concept merged with electronic cash, leading to the creation of Bitcoin, the pioneering blockchain application widely accepted across sectors. Bitcoin allowed direct transactions without intermediaries, initially providing user anonymity, though their transactions became visible. The term “pseudo-anonymous” was coined emphasizing the need for trust mechanisms in an environment where user identification was not straightforward. Before blockchain, trust was facilitated by intermediaries [1, 2].

In the absence of trusted intermediaries, BCT is recognized for its four key characteristics: ledger, security, shared, and distributed. These attributes create trust among users, even without their explicit knowledge [3, 4]. Over the past decade, information technology disruptions have reshaped industries and businesses, prompting questions about sustainability. Sustainability, in this context, entails reducing financial saving costs, the cost of mistrust, disruptions from other fintech companies, and eliminating the need for intermediaries [4, 5]. Nevertheless these difficulties, new business paradigms have been brought about by the internet, with blockchain being a widely used application in the banking industry following the global financial crisis of 2008. Paired with artificial intelligence, IoT, and virtual reality, blockchain’s decentralization, transparency, and immutability contribute to trust and security in network [6]. The application of blockchain extends beyond finance promising radical changes in telecommunications, healthcare, music and entertainment, energy, real estate, insurance, and other sectors. This chapter presents a complete introduction of BCT, including its various uses and future research directions. It illuminates the function and features of blockchain in numerous businesses uncovering hidden areas that provide opportunity to address obstacles.

1.2 The Evolution of Blockchain

The foundational ideas and principles of BCT have been in existence since the 1980s. In 1982, Chaum published his dissertation thesis, which was the first to explicitly suggest a system similar to blockchain [7]. In 1991, an electronic record for digitally signed documents was created using a chain of blocks that was cryptographically secured, as later reported by Haber and Stornetta [8]. Merkle trees were included into this encryption method [9]. In 1998, Szabo developed the idea for “bit gold,” a decentralized system of electronic money [10]. In the early 2000s, this concept was integrated with electronic cash eventually leading to the creation of Bitcoin. When Nakamoto first introduced Bitcoin in 2008, it was a peer-to-peer (P2P) network that offered electronic currency [11]. Additionally, this year saw the introduction of the term “blockchain,” referring to the distributed ledger technology that enables Bitcoin transactions [12]. Bitcoin, being the first widely accepted blockchain application, allowed users to engage in direct transactions without the need for third-party mediation. Unlike previous electronic cash schemes, Bitcoin gained widespread acclaim due to its decentralized nature providing users with control over their electronic cash without a single point of failure. Bitcoin initially allowed users to remain unidentified, but their transactions were visible resulting in pseudo-anonymous accounts. The need for trust mechanisms in an environment where user identification is not straightforward is becoming crucial. Prior to BCT, trust relied on intermediaries.

In 2013, Ethereum was introduced by Buterin through his whitepaper. Crowd sourcing was used to support Ethereum’s development in 2014, and on July 30, 2015, the Ethereum network was operational. Ethereum was the first project to provide Blockchain 2.0, setting itself apart from other endeavors that were only concerned with producing altcoins that resembled Bitcoin. In contrast to these initiatives, Ethereum used distributed apps on its blockchain to enable connections without trust. Ethereum was created for distributed data storage and smart contracts, which are small computer programs, whereas Bitcoin was intended for a distributed ledger. Over the course of three phases, the Ethereum 2.0 upgrade from 2020 to 2022 sought to improve the network’s speed, scalability, efficiency, and security [13].

Figure 1.1 History of blockchain adopted from Guo and Yu [13].

In 2015, the Linux Foundation unveiled the Hyperledger project, an open-source software initiative for blockchains. Geared toward constructing enterprise blockchains, Hyperledger blockchain frameworks differed from Bitcoin and Ethereum. Hyperledger encompasses eight blockchain frameworks (Hyperledger Besu, Hyperledger Fabric, Hyperledger Indy, Hyperledger Sawtooth, Hyperledger Burrow, Hyperledger Iroha, Hyperledger Grid, and Hyperledger Labs), five tools (Hyperledger Avalon, Hyperledger Cactus, Hyperledger Caliper, Hyperledger Cello, and Hyperledger Explorer), and four libraries (Hyperledger Aries, Hyperledger Quilt, Hyperledger Transact, and Hyperledger URSA) [14]. The history of blockchain, as depicted in Figure 1.1, showcases Bitcoin and Ethereum as public blockchains allowing anyone to participate in their networks (permission less blockchains). In contrast, the diverse Hyperledger blockchain networks are private blockchains necessitating participant verification before network entry (permissioned blockchains).

1.2.1 Development of Blockchain Generation

The progression of BCT can be classified into three clear phases as follows: Blockchain 1.0, focusing on digital currency; Blockchain 2.0, centered around the digital economy; and Blockchain 3.0, aimed at shaping the digital society [15–17].

Blockchain 1.0—Digital Currency:

The first phase of BCT, known as Blockchain 1.0, focuses on fundamental components, including public ledger, hashing, and mining. This phase comprises the underlying protocol, transaction enablement, and the introduction of digital currencies such as Bitcoin. Bitcoin distinguishes out as a real implementation that predates theoretical talks [

18

]. Its principal features are much lower transaction costs for online transactions, greater anonymity compared to credit cards through pseudonymous accounts, and a decentralized architecture that protects against inflation by utilizing cryptography to keep a relatively constant money supply [

19

].

Blockchain 2.0—Digital Economy:

Blockchain 2.0 encompasses an extensive array of economic and financial applications beyond basic payments and transactions. This phase includes traditional banking products, complex financial market instruments, such as stocks and derivatives, legal documents like titles and contracts, as well as services like loans and mortgages. Notable applications involve payment clearing systems, bank credit information systems, and the emergence of smart contracts. Smart contracts, executed automatically upon meeting predefined conditions, have found applications in various fields, including leasing cars [

20

]. Platforms, like Ethereum, while prominent, face security challenges that developers aim to address using tools like Oyente [

21

].

Blockchain 3.0—Digital Society:

Blockchain 3.0 ushers in applications that extend beyond economic realms, spanning areas such as art, health, science, identity, governance, education, public goods, culture, and communication. Noteworthy applications include the advancement of smart cities, integrating facets like smart governance, mobility, living standards, resource management, citizen engagement, and economic activities [

22

]. The Internet of Things (IoT) emerges as a pivotal platform for e-business, facilitated by blockchain’s support for P2P trade and smart contracts, enabling transactions involving smart property and paid data [

23

,

24

]. In the chemical industry context, blockchain facilitates machine-to-machine (M2M) interactions and establishes M2M electricity markets [

25

]. Additionally, the technology enhances large-scale data management in electronic medical records (EMR) systems ensuring interoperability, accessibility, and auditability [

26

]. Digital identity, empowered by blockchain, holds the potential to transform lives, especially for the unbanked population, by providing access to financial services and regulatory compliance. Additionally, the BCT introduces opportunities to redesign reputation systems in the cyber world, addressing vulnerabilities associated with fraud rating [

26

].

1.3 Exploring the Peculiar Characteristics of Blockchain

BCT represents a cutting-edge approach with the potential to revolutionize equality, accountability, decentralization, and transparency on the internet [27]. Rooted in an egalitarian philosophy, its objective is to establish a decentralized structure for P2P transactions promoting trust and circumventing intermediaries. Blockchain utilizes a secure and transparent technology to facilitate data storage and transmission among users obviating the necessity for a central control point [28]. As expressed by Rodrigues et al. [29], blockchain redistributes control from centralized entities to users in a decentralized and transparent fashion.

Decentralization:

In traditional centralized systems, every transaction must be validated by a central authority, like a central bank, which requires confidence. However, decentralization seeks to overcome the trust issue by adding a decentralized P2P blockchain architecture. Unlike centralized systems, in which transactions need authentication from a central agency, blockchain allows any two peers to conduct transactions without such authentication [

30

]. Blockchain uses a variety of consensus processes to address trust problems providing benefits such as lower server costs and decreased performance overheads at the central server. It is worth noting that, despite these advantages, some tradeoffs remain, notably in consensus techniques, like Proof of Work (PoW) used in Bitcoin and Ethereum, where server and energy costs are greater, and speed may suffer [

28

].

Persistence:

Blockchain establishes an infrastructure that facilitates the objective measurement of truth and validates the data provided by producers and consumers [

31

]. Assuming a 10-block Blockchain, each block, beginning with Block No. 10, has the hash of the one before it, and the information in the block at hand is utilized to create a new one. This interconnection creates a linked chain, where all blocks are intricately tied together. Every present transaction is inherently connected to the preceding one. Any attempt to update a transaction would significantly alter the block’s hash, and modifying information would necessitate changing the hash data for all prior blocks—an intricate and labor-intensive task. Once a miner creates a block, other network users must validate it providing protection against any data modification or fabrication. Because of this, blockchain offers a degree of tamper-proof security that is comparable to an immutable distributed ledger.

Anonymity:

People can interact with a blockchain network by utilizing many randomly generated addresses within the network to protect their identity [

32

]. Blockchain, a decentralized system, makes guarantee that there are no central authority records or keeps track of users’ personal information. Blockchain has the potential to provide a significant level of anonymity by utilizing its trustless environment [

22

].

Auditability:

Every transaction in a blockchain network is carefully recorded and verified by means of a digital distributed ledger and a digital timestamp [

33

]. When any network node is accessed, the thorough recording makes it possible to easily audit and trace past records. Consider Bitcoin as an example. It permits the iterative tracking of every transaction guaranteeing the integrity and transparency of the data state within the blockchain. However, tracking down the source of money becomes extremely difficult when it is purposefully transferred between many accounts [

34

].

Security:

Blockchain prevents fraud and protects data using encryption techniques like asymmetric public-key cryptography. Authenticity, data integrity, and non-repudiation are ensured via digital signatures [

35

].

Immutability:

Because of the peer-to-peer (P2P) network’s protection, data recorded on a blockchain are considered immutable. Recording transactions makes them irreversible and creates an immutable history of previous transactions [

36

].

Veracity:

Blockchain enhances the veracity of stored records through replication across a network of nodes. Consensus mechanisms validate each record minimizing the risk of bogus entries [

28

].

Transparency:

Every transaction on a public blockchain is open to the public and transparent. Depending on the needs, the level of openness can be changed [

37

].

Disintermediation:

By doing away with the need for third parties to act as middlemen, blockchain lowers operating expenses and improves the effectiveness of sharing services. Better value sharing between buyers and sellers is made possible by the elimination of middlemen [

22

,

28

].

Trust:

By requiring consent from the majority of participants before adding data to the blockchain, blockchain promotes trust among users. The necessity for middlemen is reduced as a result of this growing trust [

38

,

39

].

Turing-Complete:

Smart contracts are supported by contemporary blockchain networks enabling programmers to create and execute a wide range of applications. To create networked applications with comprehensive capabilities, this Turing-complete capacity is essential [

40

,

41

].

Performance and Scalability:

Any system must have performance, which includes speed, efficiency, and resource usage. Scalability, or blockchain’s capacity to manage a growing amount of labor and activities, is an issue [

26

].

Because of these unique qualities, blockchain is a flexible technology that can be used in many kinds of blockchains at varied degrees of significance. The characteristics of blockchain may lead to its adoption for prospective applications depending on the particular requirements and needs in the construction business. To provide public transparency, for example, registering land on a public blockchain can be done. According to Yli-Huumo et al. [1], the main objective of BCT is to create a decentralized ecosystem in which no outside entity controls data or transactions. Reducing the number of middlemen in the building process can lower opportunity and transaction expenses. This part discusses the fundamental characteristics of blockchain technology, while the next section looks at the dangers, obstacles, and factors that will affect its acceptance.

1.4 Structure of Blockchain Technology

Each node in a decentralized blockchain network initiates transactions— which are digital assets exchanged as data structures between network peers— using digital signatures based on private-key cryptography [28, 42]. First, every transaction is kept in an unconfirmed transaction pool. The Gossip protocol, a flooding mechanism, is used to spread these transactions around the network. Peers then pick transactions and verify them according to predetermined standards. As a decentralized mesh network of interconnected computers, a blockchain operates without a central server and is governed by multiple layers that define protocols for BCT applications. Considering this, Figure 1.2 presents a blockchain architecture comprising five modules as follows [43, 44]:

The Data Source Module makes it easier for distributed, shared databases—also known as ledgers—to become blockchains. These work in a client-server network without centralized control, in contrast to conventional databases. As a result, there is no need for user credentials to go via central authority verification, which lowers the possibility of hacking and manipulation. Rather, new additions to the blockchain are validated by consensus among all members of the peer-to-peer (P2P) network ensuring data integrity. This guarantees that all users get data that have not been tampered with or altered when they are retrieved. Unlike typical databases, where data may also be updated and destroyed, this module only allows for the writing and reading of data through searches and retrievals.

The Transaction Module oversees the validation and recording of new transactions representing value transfers between sellers and buyers, thereby altering the data state within the block. While past entries in the block remain unchanged, new entries can modify the data state in preceding entries. This module begins with a transaction agreement between the buyer and seller. Once agreed upon, the transaction is broadcasted to the peer-to-peer (P2P) network, where miners collect and process it within a block earning rewards for their efforts. Once verified, miners distribute the new, immutable block across the entire P2P network. Within this module, an input refers to an output from a previous transaction, with multiple inputs often listed. The values of all new transaction inputs are summed ensuring that the total input value equals or exceeds the total output value.

The Block Creation Module is responsible for permanently recording transaction data in a file known as a block. When a block is connected to preexisting blocks and organized into a linear sequence over time, it forms the blockchain. However, it is important to note that a new block cannot be submitted and added to the P2P network without mining. Mining involves the process of adding transaction records to the public distributed ledger of past transactions by solving complex mathematical puzzles.

The Consensus Module plays a crucial role in confirming and validating transactions through consensus algorithms such as proof of work, proof of stake, or Byzantine fault tolerance. This module is essential for maintaining the integrity of the transaction data recorded on the blockchain and ensuring the order of transactions and blocks. Hence, selecting an optimal consensus mechanism is pivotal to prevent data corruption within the blockchain.

The Connection and Interface Module facilitates web interfaces for users, including those without coding, technical, or legal skills. It synchronizes and integrates all Information Technology (IT) platforms, software (e.g., bitcoin wallets), and algorithms required for blockchain applications. This module aims to provide real-time information regarding contractual status and transaction tracking using mobile devices. Additionally, it fosters integration among different companies or industries enabling seamless communication and sharing of digital assets. Consequently, the interoperability enhanced by this module enables the establishment of more partnerships among different companies and drives greater business value through shared blockchain solutions.

Figure 1.2 Fundamental structure of BCT (adopted from Min [44]).

1.4.1 Blockchain System Architectures

Depending on how it will be used and what its intended purpose is, a blockchain network or system might have a variety of rules and structures. In the literature, a broad blockchain design is described as a tiered architecture for creating distributed applications, as seen in Figure 1.3. Blockchain systems typically comprise validators and network users. User nodes are capable of starting or stopping transactions and keeping track of copies of the ledger. In addition to having read access rights, validators have the responsibility of validating ledger alterations and reaching an agreement on the legitimate ledger state throughout the network. Access and validation permissions can be set up differently depending on the system, and they can be applied either universally or partially. Any internet user can join in public blockchain systems, while access to private blockchains is limited [45].

Permissionless ledgers are completely shared and censorship resistant since every network member may participate in transaction validation. Permissioned ledgers, on the other hand, restrict write access to particular validator nodes. Since validators and users are unknown to one another in public and permissionless ledgers, game-theoretic rewards and equilibria encourage cooperation and trust. Typically, incentive structures entail the use of resources such as electricity, computing power, or penalties designed to discourage self-centered behavior. Similar to know-your-customer procedures, user identities are known in private and permissioned ledgers (KYC). Since validator nodes are believed to behave honorably, artificial incentives are not required to guarantee system functionality. Therefore, increased speed, flexibility, and efficiency may be possible with private and permissioned ledgers, but at the cost of immutability and censorship resistance. Furthermore, certain ledger systems may be classified as consortium blockchains, which function as a cross between public and private blockchains [47].

Figure 1.3 A general blockchain-layered architecture adopted from Xie et al. [46].

Separating blockchains into generaland specific-purpose categories may also be done depending on their development objective. Some examples are Bitcoin, which is especially made for cryptocurrency transactions, and Ethereum, which is made for a wide range of uses. There are two types of blockchain governance and protocol rules, which are open and closed source. All network participants can participate in opensource designs, which provide ongoing, transparent peer review, open discourse, and community decision making. Closed-source blockchains function like private companies, with modifications to the rules made behind closed doors. It is imperative to recognize that a single blockchain architecture is insufficient for every application or use case. Therefore, hybrid strategies with different levels of centralization that fall between public and private blockchains may be investigated. Important performance characteristics, like speed, scalability, and resource efficiency, are mutually determined by the resultant system design and the implemented consensus method [48]. Blockchain is acknowledged as a decentralized consensus network, and Figure 1.4 illustrates how a P2P network worked together to develop it.

Figure 1.4 An overview of the blockchain’s underlying technology (adopted from Perera et al. [28]).

1.4.2 Consensus Algorithms

Anonymity is one of the desirable aspects of BCT, but there are trust issues as well. It is crucial to make sure anonymous users are truthful while adding transactions to a ledger. Every transaction needs to be verified to confirm legality to solve this and stop nefarious practices like double spending. Transactions are appended to a block upon validation. A consensus algorithm is essential for reaching a consensus when adding a new block to the blockchain. These algorithms make use of the majority of users’ common interest in preserving the blockchain’s integrity. Convergence algorithms are the fundamental building blocks of blockchain transactions since they verify transactions and guarantee their correct storage on blocks [13, 47].

A consensus protocol is a set of guidelines that all users of a distributed technology, such as blockchain, must abide by. A distributed consensus mechanism is required for participants to reach a consensus on the present state of the blockchain since blockchain is not universally trusted. The consensus of the blockchain is based on scarcity, wherein greater control over a limited resource allows for greater authority over the network’s functioning. Proof of Work (PoW), Proof of Bandwidth (PoB), Proof of Importance (PoI), Tendermint, Ripple Directed Acyclic Graph (DAG), Delegated Proof of Stake (DPoS), Proof of Authority (PoA), Scalable Byzantine Consensus Protocol (SCP), Proof of Burn, Proof of Stake (PoS), Practical Byzantine Fault Tolerance (PBFT), and Proof of Capacity are some of the unique requirements that have been addressed by these consensus mechanisms [49–52]. The most popular ones are DPoS, PBFT, PoW, and PoS. Among consensus algorithms, DAG stands out as the most unique, whereas Intel Corporation invented PoET, which is utilized in Hyperledger Sawtooth. We go into more detail about these 10 consensus techniques below.

1.4.2.1 Proof of Work (PoW)

The “Hashcash” proof of work, which was first created to tackle denial of service assaults on internet services, served as the model for PoW. By figuring out a cryptographic problem and trying to produce a hash output with a certain number of consecutive zeros, miners, also known as validators, compete to add a new block to the current blockchain. This entails computing the hash output of the block header, which contains details such as the hash of the previous block and a unique hash of all transactions (Merkle tree). It also involves adding a nonce, a unique integer used once, to the block. Miners engage in a lot of computational work to discover a hash output that is less than a goal number [53].

When a miner discovers the correct hash output, the block is accepted by the Bitcoin network, and the successful miner earns a financial reward. Other miners then begin working on the next block. Each new block includes the hash outputs from previous blocks creating a chain where only the longest chain, presumed to be generated by the majority of computational power, is deemed valid. This ensures the ledger’s most accurate state. Although PoW can accommodate a large number of users, its transaction rates and finality times may not suit all use cases. For example, the original Bitcoin network handles approximately seven transactions per second, with confirmation times fluctuating based on network activity and transaction fees. While scalable, PoW is resource intensive, consuming significant amounts of electricity, raising sustainability concerns. To mitigate these issues, alternative methods, like PoS, have been suggested [54].

1.4.2.2 Proof of Stake (PoS)

The critique of PoW has prompted the development of a new replacement algorithm identified as PoS. PoS substitutes a random selection process for computing labor, in which the quantity of validators directly influences the probability of successful mining. The likelihood of a node creating a block is determined by their level of stake, or coin ownership, in the system. This strategy may result in blockchains that operate quicker, use a lot less power, and are less susceptible to a 51% assault. Furthermore, since miner incentives are entirely generated from transaction fees rather than hardware expenditure, such as ASICs, there is no need to continuously issue new currencies to encourage validation [55].

PoS leverages game-theoretical mechanisms to deter collusion and centralization often penalizing dishonest and malicious behavior. However, PoS systems face the “nothing at stake” problem, where voting or claiming rewards for multiple chains is cheap. To counter this, various solutions have been proposed, such as punishing validators who create blocks on multiple chains simultaneously by automatically deducting their coins. Another approach penalizes validators for creating blocks on the wrong chain, similar to PoW, where validators incur electricity costs. Although this increases the risk for validating nodes, it eliminates the need for their identities to be known beforehand. PoS-based algorithms come in many forms and are applicable in both public blockchains, where validators are unknown and untrustworthy, and private or business-oriented settings, where validators are a known set of trusted entities. Ethereum, a leading blockchain platform for developers and enterprises, is considering a transition from PoW to PoS solutions. In trusted or semi-trusted environments, voting-based algorithms like PBFT can offer suitable solutions. PBFT is discussed in the following section [54].

1.4.2.3 Practical Byzantine Fault Tolerance (PBFT)

The idea of Byzantine faults, first presented by Lamport et al. in a landmark computer science publication, is the foundation of PBFT algorithms. The core of this challenge is how a collection of Byzantine generals, or nodes in a blockchain environment, can agree upon a common course of action, like arranging military maneuvers. The difficulty lies in ensuring that loyal generals can agree on the plan despite the possibility of lost or sabotaged messages, as well as the presence of traitorous generals sending false information. This means, in terms of blockchain terminology, making sure that the validity of blocks or groups of transactions cannot be jeopardized by a small number of potentially malevolent nodes. This problem has been addressed by Castro and Liskov’s [55] PBFT method, which introduces main and secondary replicas. Secondary replicas keep an eye on the primary replica’s accuracy and responsiveness and have the ability to transition to a new primary in the event that the original is damaged [56].

PBFT algorithms are a cornerstone of modern blockchain systems that employ a voting-based consensus approach. In PBFT, transactions are individually verified and signed by known validator nodes making it ideal for trusted environments rather than public permissionless ledgers. Once a sufficient number of signatures are gathered, transactions are considered valid, and consensus is achieved. PBFT provides instant finality ensuring that globally verified blocks cannot be reversed. However, it relies on at least two-thirds of the network behaving honestly, and the message overhead can increase as the network grows, affecting both speed and scalability. Various BFT-based protocol variants have been proposed by notable developers, including those associated with Hyperledger and Tendermint [55].

1.4.2.4 Delegated Proof of Stake (DPoS)

DPoS revolutionizes validation through a dynamic voting system empowering network members to elect delegates and witnesses. These elected witnesses generate blocks on a precise schedule, often every few seconds, ensuring lightning-fast confirmation times. Reputation is key—dishonest witnesses can be swiftly voted out by the community. Beyond witnesses, delegates are chosen to set protocol rules and system parameters, like transaction fees and block size. DPoS stands out as a shareholder voting consensus model allowing every member to decide whom to trust, unlike traditional PoS, which favors the wealthiest participants. This approach promises speed, high transaction rates, and minimal energy use. However, it comes with the risk of centralization if voter participation dwindles [47].

1.4.2.5 Federated Byzantine Agreement (FBA)

FBA depends on a limited group of validators that every participant believes to be reliable. Transactions that have previously been authorized by their trustworthy validators are accepted by network members. Different versions of the FBA concept are used by protocols such as Stellar and Ripple. In numerous rounds, users create a “candidate set” of transactions and broadcast them to the network to reach an agreement in Ripple. After that, nodes cast votes on the transactions using the results to modify their list of candidates. This procedure keeps on until the chosen candidate group wins more than 80% of the vote. Stellar uses a comparable variant in which a block is approved if it bears the signature of a particular quorum of validators, which is the minimum number of nodes needed to come to an agreement [47].

1.4.2.6 Proof of Authority (PoAu)

Proof of Authority (PoAu) operates by granting special permissions to one or more members to modify the blockchain. For example, a designated member with a specific key might be responsible for generating all the blocks. Essentially, PoAu is a variant of the Proof of Stake algorithm where validators’ “stake” is their own identity. Network participants trust authorized nodes, and a block is accepted if the majority of these nodes sign it. New validators can be added through a voting process. While PoAu is more centralized, it is particularly useful for governance or regulatory bodies and is becoming popular among utility companies in the energy sector. This approach is ideal for specialized use cases where security and integrity are paramount, such as the Energy Web blockchain, which achieves confirmation times of 3–4 s and can scale to several thousand transactions per second [47].

1.4.2.7 Proof of Elapsed Time (PoET)

PoET was first created and suggested by the Sawtooth project at Intel. The goal of this method is to provide an energy-efficient, scalable, and equitable consensus process that works with thousands of nodes. PoET aims to imitate a random and equitable block creation process without using up priceless resources like energy, computing power, or money. New CPU instructions and a reliable execution environment are used to achieve this. A general-purpose processor’s trusted function is contacted by validator nodes to get a waiting time; the node that generates the block with the least wait time is the winner. The setting confirms that a leadership claim is legitimate based on the allotted wait period. The main critique of this strategy is its dependence on the environment created by Intel, which implies that confidence is still placed in unique authority [47, 57].

1.4.2.8 Proof of Activity (PoAc)

PoW and PoS are combined in the hybrid system known as PoAc. Using a classic PoW method, miners create block templates that are empty of transactions. Next, a group chosen at random on the basis of their investment in the system validates the block. When all of the group’s validators have signed the block, block validation is complete. If no nodes are accessible, a new group is selected. PoAc tackles problems, like resource waste and validators, signing twice by combining the benefits and drawbacks of PoW and PoS [47].

1.4.2.9 Proof of Burn (PoB)

By demanding currency payments from validator nodes to validate blocks, PoB aims to mimic the cost of validation in PoW. By committing coins that are subsequently “burned,” or irretrievably lost, validator nodes raise their chances of being chosen at random for validation. In PoB, validation is contingent upon financial commitment, which leads to needless resource waste. But unlike PoW, centralization issues in PoB are independent of hardware [47].

1.4.2.10 Proof of Capacity (PoC)

To increase their chances of generating the next block and receiving rewards, validator nodes are required to devote hard drive space under Proof of Capacity (PoC) and its variations, such as Proof of Space or Proof of Storage. Large datasets known as “plots” are created throughout the proof of concept process using up storage space. This method does not need the purchase of pricey ASIC hardware and can result in large energy savings. PoC must, however, deal with problems akin to the “nothing at stake” conundrum. Pylon-Core, created by the Spanish firm Pylon Networks, is an example of a PoC network with a throughput rate of 7,000 transactions per second [47].

Numerous distributed consensus methods are described in the literature, each with special characteristics and trade-offs. Performance metrics, including scalability, transaction speed, finality, security, and resource consumption, are all greatly impacted by consensus mechanisms. They have to be resistant to malicious nodes, message delays, and node failures. Techniques vary from voting-based techniques, like PBFT, to lottery-based techniques, like PoW. There are trade-offs between speed, finality, and scalability in each approach, and there are constant efforts to improve both. To overcome scalability issues, sharding, side chains, and payment channels are suggested methods. Network validation frequently necessitates resource investment that is matched with security concerns. To ensure the security and integrity of blockchain technology, incentive systems and incentives are essential. Whether an application requires an open, censorship-resistant platform, instantaneous transaction finality, or high transaction rates will determine which consensus method is best [58].

1.4.3 Smart Contracts

Smart contracts represent a pivotal aspect of BCT enabling not only the maintenance of a distributed and immutable ledger but also the execution of precise computer code dictating the management of various processes and responses to specific events. Originally introduced within Ethereum to surpass the constraints of Bitcoin, smart contracts are essentially pieces of code designed to react to predefined events, regardless of whether they involve multiple parties or are legally binding. The recent surge in blockchain interest has revitalized the adoption of smart contracts within the main network offering substantial advantages by bypassing intermediaries and facilitating, immutability, self-verification, and self-execution. Ethereum’s blockchain framework has propelled the proliferation of smart contracts empowering developers to implement decentralized applications across financial and non-financial domains. Solidity, a comprehensive high-level programming language, has emerged as the primary tool for crafting decentralized applications on Ethereum’s main network fostering innovative solutions across sectors, including healthcare [6].

The concept of smart contracts traces back to 1994, coined by cryptographer Nick Szabo, in tandem with the inception of the internet. Szabo defined smart contracts as digital commitments wherein parties execute predefined actions without requiring mutual trust, as the code enforces compliance automatically, impervious to interference. Triggering a smart contract hinges on meeting predefined conditions specified in temporal descriptions. Once conditions are satisfied, the smart contract autonomously issues preset data resources. The essence of a smart contract system entails a series of transactions and events channeled into the contract. The process encompasses the construction, dissemination, and execution of smart contracts within the blockchain network. Users collaboratively formulate smart contracts, which propagate across nodes through P2P networks and are stored within the blockchain. Smart contracts periodically validate transaction statuses executing and notifying users upon consensus agreement [59].

Smart contracts serve as computer protocols for propagating, validating, or executing contracts in an information-centric manner, facilitating trusted transactions without intermediaries, while ensuring traceability and irrevocability. Despite their advantages in efficiency, low maintenance costs, and precise execution, the comprehensive exploration and application of smart contracts are ongoing, with potential risks inherent in emerging technologies [60].

1.4.4 Cryptography for Blockchain

BCT builds reliance between entrusted parties, allowing for safe and trustworthy transactions and records without the need for a centralized intermediary. By leveraging cryptography and collaboration, blockchain eliminates the reliance on centralized institutions for trust verification. Information stored on the blockchain ledger is secured using various cryptographic building blocks [45, 61].

1.4.4.1 Public Key Cryptography

This cryptographic technique is utilized for digital signatures and encryption. Public key cryptography maintains transaction validity by allowing users to authorize communications with private keys that can subsequently be confirmed with the associated public keys. Blockchain uses public key cryptography to confirm the validity of transactions. During this cryptographic procedure, each user keeps a private key safely saved in a digital wallet, which can be a hardware device or a software program such as a desktop or mobile wallet. To begin a transaction, a user signs a message with their private key resulting in a digital signature. This signature and the transaction details are then communicated to the blockchain network. Miners use the client’s public key to decode the digital signature and generate a hash value. Simultaneously, they hash the incoming transaction data to produce another hash. Miners verify the legitimacy of a transaction by comparing its hash values. The sole ownership of the private key assures transaction authorship [28].

This cryptographic approach permits digital signatures on transactions by depending on each users’ unique private keys. The public and private keys form the backbone of blockchain allowing user transactions to be signed and verified. Both Ethereum and Hyperledger Fabric use digital signatures on transactions and blocks to verify the creator’s identity and assure data integrity. Public–private key pairs are generated using the commonly used Elliptic Curve Digital Signature Algorithm (ECDSA). The public key acts as a user’s identification inside the blockchain network, and knowledge of it is required for digital signature validation. It offers a technique for managing user identities while preserving privacy by preventing the revelation of real-world identities [61].

1.4.4.2 Zero-Knowledge Proofs

Users can demonstrate their knowledge of a secret without actually disclosing it thanks to zero-knowledge proofs. This cryptographic approach improves privacy by allowing clients to verify the accuracy of information rather than providing sensitive information. Zero-knowledge proofs have significant applications in BCT. For instance, when a user initiates a transaction to transfer funds to another user, the blockchain needs to ensure that the sender possesses sufficient funds without necessarily disclosing their identity or total balance. In essence, the blockchain operates without possessing any knowledge of the sender’s identity or the exact amount of funds involved in the transaction [61]. Zero-knowledge proofs serve as a cryptographic mechanism to enhance user privacy within certain blockchain implementations. While Ethereum currently lacks native support for zero-knowledge proofs, plans to integrate zkSNARKS, a specific sort of zero-knowledge proof, are included in Ethereum’s development roadmap.

1.4.4.3 Hash Functions

Hash functions are one-way mathematical functions that generate a unique output (hash) for any given input. They are used to maintain data integrity and security on the blockchain. Hashing functions are an essential part of the construction of Merkle trees, which are data structures used to effectively store and check the integrity of enormous amounts of data. BCT relies heavily on hash functions, which provide five essential cryptographic features as follows [61]:

Fixed Capacity: Data may be compressed into a consistent size because hash algorithms, independent of the input, provide outputs of a fixed size. Blockchains use this feature to compress messages for digital signatures.

Preimage Resistance: Although it is simple to calculate a hash output given an input, it is not possible to deduce the original input from the hash result analytically. The only workable approach is to produce inputs at random until the intended result is achieved.

Second Preimage Resistance: It is computationally impossible to locate another input that yields the same hash output given one input and its hash output.

Collision Resistance: Finding two different inputs that result in the same hash output is not computationally possible.

Sensitivity to Change: A slight modification to the input yields an entirely new hash output.

Each block in a blockchain architecture is comprised of the hash of the header of the previous block forming a linked chain. A Merkle tree is used to organize the hashes of several transactions within a block. An example of this may be seen in the graphic. This structure yields the Merkle root, which is put in the block header to guarantee the ledger’s immutability and security. The blockchain’s integrity is preserved by instantly detecting any changes made to a block.

Cryptographic hash functions are also integral to Bitcoin’s P2PKH addresses providing secure means for fund transfers. These addresses cannot be reverse engineered ensuring transaction security. By employing these cryptographic blocks, BCT creates secure, trustless environments for storing and verifying records without intermediaries enhancing security, transparency, and efficiency.

Additionally, in blockchain architecture, blocks are interconnected to form a chain, with each block containing transactions, block index, hash of the previous block, timestamp, block hash, and nonce for hash validation, which are depicted in Figure 1.5. Understanding cryptographic hashing is crucial for digital identity comprehension. Any attempt to tamper with block data requires altering the block’s hash necessitating changes to subsequent blocks. However, tampering across a majority of ledgers is challenging making data tampering nearly impossible. Hashes serve as essential security elements safeguarding blockchain integrity. The following key components of a strong hashing algorithm are emphasized by Kaushik et al. [62] and Selmanovic [63], with SHA256 being the most often used hashing algorithm on blockchain platforms:

Figure 1.5 An example of a blockchain adopted from Perera et al. [28].

The output length of the hashing method must be constant (ideally 256 bytes).

Considerable variations in the output should follow even small changes to the input data.