Principles and Applications of Blockchain Systems E-Book

Hui Li

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

Seitenzahl: 658

Veröffentlichungsjahr: 2025

Beschreibung

Technical theory, key technologies, and practical applications for consortium blockchains, with a solution to the CAP trilemma problem

Principles and Applications of Blockchain Systems provides a comprehensive introduction to consortium blockchains, including the physical, network, consensus, and contract layers, covering technical theory, key technologies, and practical applications. Beyond the technical side, this book visually showcases the application potential of consortium blockchains, with information on implementation cases in network management (Multi-Identifier System) and secure storage (Mimic Distributed Storage System).

This book thoroughly addresses the CAP trilemma problem for consortium blockchains, a major barrier to scalability, by presenting a novel quantifiable impossibility triangle with a solution. Additionally, optimization techniques in consortium blockchains, such as P2P protocols for future networks and consensus algorithms, are discussed in detail.

Written by two highly qualified academics with significant experience in the field, Principles and Applications of Blockchain Systems discusses topics such as:

• Peer-to-peer networks in consortium blockchains, covering P2P network architecture and node discovery, data synchronization, and gossip protocols
• Basic concepts of distributed consistency, including the SMR model in blockchain systems, assumptions for distributed networks, and the Byzantine Generals problem
• Consensus mechanisms evolution process from voting-based, including PBFT, RPCA, SCP, and CoT; to proof-based including PoW, PoS, and PoX; finally optimized by fusion both voting-based and proof-based, including PoV, PPoV, HotStuff
• Types of vulnerability for smart contracts, covering solidity code, EVM execution, and blockchain system layers
• Historical trend of upgrade from electronic consensus to quantum consensus

With highly comprehensive coverage of the subject, Principles and Applications of Blockchain Systems serves as an ideal textbook for blockchain students and researchers, and a valuable reference book for engineers and business leaders involved in developing real-world blockchain systems.

Leseprobe

IEEE Press445 Hoes LanePiscataway, NJ 08854

IEEE Press Editorial BoardSarah Spurgeon, Editor‐in‐Chief

Moeness Amin

Ekram Hossain

Desineni Subbaram Naidu

Jón Atli Benediktsson

Brian Johnson

Tony Q. S. Quek

Adam Drobot

Hai Li

Behzad Razavi

James Duncan

James Lyke

Thomas Robertazzi

Joydeep Mitra

Diomidis Spinellis

Principles and Applications of Blockchain Systems

How to Overcome the CAP Trilemma in Consortium Blockchain

Hui Li

Peking University

China

Han Wang

Peking University

China

Copyright © 2025 by The Institute of Electrical and Electronics Engineers, Inc. All rights reserved.

Published by John Wiley & Sons, Inc., Hoboken, New Jersey.Published simultaneously in Canada.

No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, scanning, or otherwise, except as permitted under Section 107 or 108 of the 1976 United States Copyright Act, without either the prior written permission of the Publisher, or authorization through payment of the appropriate per‐copy fee to the Copyright Clearance Center, Inc., 222 Rosewood Drive, Danvers, MA 01923, (978) 750‐8400, fax (978) 750‐4470, or on the web at www.copyright.com. Requests to the Publisher for permission should be addressed to the Permissions Department, John Wiley & Sons, Inc., 111 River Street, Hoboken, NJ 07030, (201) 748‐6011, fax (201) 748‐6008, or online at http://www.wiley.com/go/permission.

Trademarks: Wiley and the Wiley logo are trademarks or registered trademarks of John Wiley & Sons, Inc. and/or its affiliates in the United States and other countries and may not be used without written permission. All other trademarks are the property of their respective owners. John Wiley & Sons, Inc. is not associated with any product or vendor mentioned in this book.

Limit of Liability/Disclaimer of Warranty: While the publisher and author have used their best efforts in preparing this book, they make no representations or warranties with respect to the accuracy or completeness of the contents of this book and specifically disclaim any implied warranties of merchantability or fitness for a particular purpose. No warranty may be created or extended by sales representatives or written sales materials. The advice and strategies contained herein may not be suitable for your situation. You should consult with a professional where appropriate. Further, readers should be aware that websites listed in this work may have changed or disappeared between when this work was written and when it is read. Neither the publisher nor authors shall be liable for any loss of profit or any other commercial damages, including but not limited to special, incidental, consequential, or other damages.

For general information on our other products and services or for technical support, please contact our Customer Care Department within the United States at (800) 762‐2974, outside the United States at (317) 572‐3993 or fax (317) 572‐4002.

Wiley also publishes its books in a variety of electronic formats. Some content that appears in print may not be available in electronic formats. For more information about Wiley products, visit our web site at www.wiley.com.

Library of Congress Cataloging‐in‐Publication Data is applied for:

Hardback ISBN 9781394237227

Cover Design: WileyCover Image: © Yuichiro Chino/Getty Images

Foreword by Peter Major

It is with great pleasure that I provide my heartfelt recommendation for the book, Principles & Applications of Blockchain Systems: How to Overcome the CAP Trilemma in Consortium Blockchain. As the Vice‐Chairman of the United Nations Commission on Science and Technology for Development (CSTD) and the Founding Chairman of the World Digital Technology Academy (WDTA), my commitment lies in fostering sustainable development within the digital economy.

In this digital age, ensuring the trustworthy exchange of digital assets and effective governance of cyberspace stands as a paramount objective. Blockchain technology is a fundamental tool in establishing digital trust and advancing the digital economy. However, it faces a significant challenge known as the CAP trilemma, which restricts the simultaneous achievement of strong consistency, high availability, and partition fault tolerance within distributed systems. This book skillfully expounds upon the core principles of blockchain technology, empowering readers to gain a comprehensive understanding of the CAP trilemma. Furthermore, the author presents an innovative and unprecedented solution that provides both theoretical and practical support for consortium blockchains, effectively resolving the CAP trilemma conundrum.

I firmly believe that the benefits of digital technology and economic achievements should be accessible to all individuals. Beyond addressing the CAP trilemma, this book delves into essential concepts such as Web3, multilateral governance of cyberspace, DAO, DID, the digital economy, and digital assets. Web3 signifies the future direction of the Internet, paving the way for a more open, transparent, and secure network environment through decentralization and blockchain technology. Governance of cyberspace emphasizes democratic, inclusive, and cooperative global cyber governance, empowering all stakeholders to participate collaboratively in decision‐making and rule‐making processes. DAO and DID, as significant applications of blockchain technology, embody the decentralized autonomy of organizations and personal identity, profoundly impacting the future of the digital economy and digital asset management.

The author, Prof. Hui Li, is a prominent expert in the field of blockchain at our WDTA organization, with impressive achievements in both research and practical applications. The works presented in this book offer valuable insights and serve as a source of inspiration for readers. Through a meticulous dissection of the principles and mechanisms underlying blockchain technology, this book presents an innovative solution that empowers consortium blockchains to overcome the CAP trilemma. Whether you are a newcomer intrigued by blockchain or an experienced professional, this book will provide you with a profound understanding of the subject matter and practical solutions to address the challenges at hand.

I hope that this book provides you with valuable insights into the utilization of blockchain technology and effective resolutions to the CAP trilemma. Let us join forces to drive sustainable development within the digital economy. By immersing yourself in this book, you will acquire a comprehensive grasp of the fundamental concepts and principles of blockchain technology, thereby offering robust support for your research and practical endeavors within the realm of the digital economy. May this book enrich your knowledge and serve as an abundant source of inspiration, empowering you to make positive contributions to the advancement of the digital economy.

Peter Major

Vice‐Chairman, United Nations Commission on Science and Technology for Development

Founding Chairman, World Digital Technology Academy

Foreword by Zhang Jing‐an

In the current era of rapid development in the digital economy, the rise of blockchain technology has undoubtedly injected strong innovative momentum into various industries. With its unique attributes – decentralization, immutability, and high transparency – blockchain is profoundly reshaping our business models and data governance frameworks. Against this backdrop, the monograph “Principle and Applications of Blockchain Systems: How to Overcome the CAP Trilemma in Consortium Blockchain,” authored by Prof. Hui Li and Dr. Han Wang from Peking University, arrives at a crucial moment. It systematically and deeply analyzes the foundational theoretical framework, core key technologies, and extensive practical applications of blockchain, making significant academic contributions and offering strategic insights for guiding policy practice.

This monograph not only systematically explains the core concepts of blockchain but also provides an in‐depth analysis of key technologies such as consensus mechanisms, physical topology, and P2P networks. It builds a solid foundation for academic research while offering rigorous and practical references for policymakers. In particular, the book's profound examination of the CAP trilemma provides a fresh perspective on the limitations and challenges faced by blockchain technology in practical applications, which is vital for promoting healthy technological development.

The Chinese government places a high priority on the development of blockchain technology. Since 2019, Chinese leaders have repeatedly emphasized the strategic importance of blockchain, and relevant government departments have introduced a series of policies aimed at accelerating the deep integration and widespread application of blockchain in sectors such as finance, logistics, and healthcare. The timely publication of this monograph undoubtedly provides policymakers with rich theoretical nourishment and practical guidance, helping us better understand the potential and risks of blockchain technology while fostering a positive interaction between technological and social development.

Additionally, the monograph proactively addresses cutting‐edge topics such as privacy protection, quantum computing, and cross‐chain technology, showcasing the vast application prospects of blockchain. It offers valuable theoretical support and practical insights for exploring compliant application paths for blockchain under the evolving landscape of laws and regulations, ensuring data security and privacy protection.

I believe “Principle and Applications of Blockchain Systems: How to Overcome the CAP Trilemma in Consortium Blockchain” serves not only as a high‐quality textbook for students and faculty in higher education but also as an important reference for researchers in technology policy and colleagues in the blockchain industry. I hope that readers will seize this opportunity to gain deeper insights into the essence of blockchain technology and boldly explore its application potential across various domains, collectively contributing wisdom and strength to promote the high‐quality development of China’s digital economy and accelerate technological innovation. Let us work together, using this monograph as a key to unlock the doors to a new technological era and contribute to the scientific formulation and effective implementation of global technology policies.

Zhang Jing-an

Academician of the International Eurasian AcademySecretary-General of the International Eurasian Academy (Beijing)

Chairman of the China Science and Technology SystemReform Research AssociationFormer President of Science and Technology Daily

Former Secretary-General of the Ministry of Science and Technology of China.

Foreword by Yale Li

It is an honor to introduce this groundbreaking work, Principles and Applications of Blockchain Systems: How to Overcome the CAP Trilemma in Consortium Blockchain, authored by Prof. Hui Li and Dr. Han Wang. As the Chairman of the Cloud Security Alliance (CSA) Greater China Region and Executive Chairman of the World Digital Technology Academy (WDTA), I recognize the immense potential that blockchain technology presents, especially in the rapidly evolving domain of consortium blockchains. Blockchain technology has revolutionized the way we think about distributed systems, offering unprecedented levels of security, transparency, and efficiency.

However, blockchain is not without its challenges. The CAP trilemma – balancing Consistency, Availability, and Partition tolerance – has been a significant barrier to the widespread adoption of blockchain technology, particularly in large‐scale, enterprise‐level consortium blockchains. In this context, the authors delve deep into the theoretical and practical aspects of addressing this issue. In an interconnected Web3 era where decentralized applications are becoming the norm, their detailed focus on reliable physical networks and smart contract security is particularly noteworthy, providing invaluable guidance for developing robust and secure blockchain systems in the Web3 era.

Prof. Hui Li, with his extensive background in future networks, cyberspace security, and blockchain technology, has been a pioneer in the field. His contributions to the development of the highly secure Multi‐Identifier Network (MIN) and his recognition as a leading figure in the international digital technology community underscore his authority on this subject.

Further, the exploration of CAP‐solving cases, including a mimic secure storage system and a co‐governed multi‐identifier system, illustrates how combining consortium blockchain technologies can innovate distributed applications. This approach enhances data and user safety and reliability, offering new insights into efficient and secure blockchain systems, which are crucial for enterprise‐level applications.

Lastly, the forward‐thinking exploration of quantum blockchain technology and the CAP trilemma provides a glimpse into the future of blockchain. The unique advantages of quantum computing may offer revolutionary solutions to the traditional security challenges of distributed theory and blockchain systems, positioning this book at the cutting edge of technological advancements.

In summary, this book combines meticulous research with practical insights, making it a significant contribution to the field of blockchain technology. I am confident that it will serve as an indispensable guide for anyone looking to navigate the complexities and harness the full potential of consortium blockchains. This book is a valuable resource not only for students and academics but also for engineers and practitioners developing and implementing secure, scalable blockchain solutions without being limited by the CAP trilemma.

Prof. Yale Li

Executive Chairman, World Digital Technology Academy

Chairman, Cloud Security Alliance Greater China Region

Foreign Academician, Ukrainian Academy of Engineering Sciences

Foreword by Feng Han

In 2008, Satoshi Nakamoto introduced Bitcoin, a decentralized and self‐operating electronic cash system. This innovation, powered by a distributed computing network, established a new global consensus on value and currency without relying on centralized control. Bitcoin is often considered the digital equivalent of gold, as its design prevents arbitrary currency creation and circumvents the need for centralized monetary authorities. At the time of writing, Bitcoin’s market capitalization has surpassed two trillion dollars, reaching an all‐time high. According to the Web3 industry consensus, Bitcoin is expected to continue its growth trajectory in the coming decades.

Building on Bitcoin’s legacy, Ethereum introduced smart contracts in 2014, enabling programmable execution of economic protocols directly on the blockchain. This innovation allowed for the automation of complex agreements, further advancing the vision of decentralized, self‐executing economic systems. In 2024, a group of Harvard students and alumni launched the New Bretton Woods (NBW) project, which then secured a student membership at Harvard Innovation Labs to advance the initiative independently. This project leverages Bitcoin‐Elastos Layer 2 blockchain technology to expand the utility of the Bitcoin ecosystem. Integrating advancements in artificial intelligence, particularly large language models, with the NBW monetary framework, the team explores the intersection of AI and blockchain technology.

Central to their vision is the concept of “AI Kallipolis,” inspired by Plato’s Republic. The NBW team aims to develop a fully autonomous economic management AI agent capable of on‐chain asset issuance, decentralized private key management, and full Decentralized Autonomous Organization (DAO) operations. The NBW project envisions a digital economic system free from human intervention, aligning with Friedrich Hayek’s advocacy for an economy governed by conscience and consensus rather than an extractive central authority. This model aspires to promote universal values of openness, fairness, transparency, security, and freedom, potentially elevating human civilization to new levels of economic autonomy and equity.

The concept of computational power lies at the heart of artificial intelligence, a point widely acknowledged by scholars. This idea aligns with Leslie Gabriel Valiant’s influential concept of the “ecorithm.” Valiant, a Turing Award‐winning computer scientist, introduced ecorithms as computational theories that explain how natural processes – such as learning and evolution – operate through algorithmic mechanisms. This solar‐powered “natural algorithm” has enabled millions of species, beginning with single‐celled organisms, to “compute” iteratively across generations, adapting to their environments. Darwin’s insight into natural selection, often summarized as “survival of the fittest,” exemplifies this process, and it shows just how natural computation over billions of years has led to the emergence of complex traits in species: the flight of birds, the swimming of fish, and the cognitive abilities of mammals, including highly intelligent humans.

Arithmetic computation also underpins foundational economic theories, as seen in the work of Adam Smith and Friedrich Hayek, who demonstrated how free‐market dynamics can be understood through principles akin to algorithmic computation. In this view, each transaction represents a form of “computation” that fosters the division of labor, promotes the efficient distribution of goods, and enables the rise of urban centers and trade hubs. Over time, these economic “computations” give rise to complex social structures, from ethical norms to legal frameworks, which collectively form the foundations of modern civilization. From the perspective that all systems – biological, social, or economic – can be framed as computational processes, the development of advanced artificial intelligence appears not as an anomaly, but as an inevitable outcome of this computational paradigm.

The AI Kallipolis project, developed by NBW, represents a new phase in the evolutionary trajectory of computational and economic systems. Designed as an impartial executor of market rules, AI Kallipolis operates without the influence of external interest groups, and it promises a freer, more transparent marketplace where interactions between humans and AI are secured, and the integrity of market dynamics is upheld. In this model, AI functions as a tool for advancing societal goals, fostering an “algorithmic harmony” that aligns with the natural and economic order. This system, in principle, reflects the Buddhist ideal of the “equality of all beings,” ensuring that every entity, whether carbon‐ or silicon‐based, is respected within this computational ecosystem.

This vision aligns with Elon Musk’s aspiration for an “interstellar civilization,” but here, NBW anticipates a future where such a civilization is not limited to humanity alone. A Mars‐based civilization could well be predominantly composed of AI agents, converging with human society within a unified digital economy. On that day, AI Kallipolis, underpinned by Bitcoin’s decentralized framework, could serve as a bridge between carbon‐based and silicon‐based civilizations, giving Bitcoin’s narrative economy a critical and tangible role. As the GDP of this encrypted economy expands into the trillions, Bitcoin may indeed take on the function that Ray Dalio predicts, addressing global debt challenges and fostering economic resilience on an unprecedented scale.

It is with this profound understanding of the importance of AI and blockchain governance for the future of human civilization that we eagerly anticipate Professor Hui Li’s monograph, “Principles and Applications of Blockchain Systems: How to Overcome the CAP Trilemma in Consortium Blockchain”.

Feng Han

Independent Researcher

Harvard University

Foreword by Ramesh Ramadoss

I feel honored to write this foreword. I have witnessed firsthand the rapid evolution, groundbreaking innovations, and gradual adoption of blockchain and distributed ledger technologies (DLTs).

The CAP theorem for distributed systems has demonstrated that the software optimization of blockchain, as a distributed system, is constrained by the CAP trilemma, which reveals the impossibility of simultaneously achieving strong consistency, high availability, and partition tolerance. While several blockchain trilemmas have emerged in recent years, the CAP trilemma remains the only one that has been rigorously proven. This book squarely addresses the challenges posed by the CAP trilemma in the blockchain field by conceptually linking the CAP theorem with blockchain challenges. Particularly, this book discusses consistency, scalability, and partition tolerance as the focal points of the trilemma and explores potential solutions in the context of permissioned blockchains.

In terms of content, this book delves deeply into the core layers of the blockchain system, such as the physical layer, the network layer, and the consensus layer. It proposes a practical design framework for a consortium blockchain system that effectively addresses the CAP trilemma. The design is inspired by engineering practice, where the domain of P includes both the failure scenario (when partitioning occurs) and the correct scenario (when partitioning occurs but is handled correctly). The former scenario requires a trade‐off between CA, while the latter does not. The consortium blockchain solution, from an engineering perspective, eliminates partition failures at the hardware level through meticulous implementation strategies. At the same time, it ensures strong consistency and high availability by leveraging the software level to implement CA in most cases. The practical application cases in the book demonstrate the feasibility of this solution in future network management and secure storage applications.

Furthermore, the book explores the impact of quantum computing on classical distributed theory and discusses the potential of quantum blockchain to transcend the limitations of the FLP and CAP theorems. This perspective sheds light on the future direction and potential impact of blockchain systems, presenting exciting possibilities for the field.

Prof. Hui Li and Dr. Han Wang, with their extensive research backgrounds and practical experience, provide a comprehensive guide that bridges the gap between theory and practice. I highly recommend this book to anyone seeking to understand and address the challenges of the CAP trilemma and its application to blockchain technology. The theoretical foundations and practical solutions presented here are certain to leave a lasting impact on both the current understanding and the future development of blockchain technology.

I have no doubt this significant contribution will inspire further research and development in this field. The work presented here stands as a testament to the authors' relentless pursuit of innovation and excellence. Their work is not merely an academic treatise; it is a practical guide for engineers, researchers, and students.

September 12, 2024Oxford, UK

Ramesh Ramadoss, PhD

Chair, IEEE Blockchain Technical Community

Member, Board of Governors, IEEE Standards Association

About the Author

Hui Li is a Emeritus professor of Peking University, chief information scientist of IASTIC (International Academician Science & Technology Innovation Center); foreign academician of Russia Academy of Natural Science, member of the National Academy of Artificial Intelligence US (NAAI), member of Expert Committee of World Digital Tech. Academy under guidance of UN Commission on Sci. & Tech. for Developments, fellow of IET, distinguished member of CCF China. He is director of PKU Lab of CENI (China Environment for Network Innovations), National Major Research Infrastructure; Technology Execute Director of Sino‐EU Intelligent Connected Vehicle and Autonomous Driving Industry Innovation Alliance (SASD). He received his BEng and MS degrees from School of Information Engineering, Tsinghua University, Beijing, China, in 1986 and 1989, respectively, and PhD degree from Department of Information Engineering, The Chinese University of Hong Kong in 2000.

Prof. Hui Li proposed the first co‐governed sovereignty network MIN (Multi‐Identifier Network) based on future network architecture and blockchain technology, and implemented its prototype and system on operator’s network in the world. MIN was obtained the award of World Leading Internet Scientific and Technological Achievements by the 6th World Internet Conference (WIC) on 2019, WuZhen, China. He was invited to give keynote speech on topic MIN more than hundred conferences around the world, including at the International Side Event of 2023 WIC Wuzhen China held by IEEE, 2023 World AI Conference Shanghai; 2024 Digital World Conference Geneva Summit organized by WDTA (World Digital Technology Academy), The 27th Session of the United Nations Commission on Science & Technology for Development “Shaping the Future of AI” Side Event (UN CSTD 2024). He was invited as guest editor of ZTE COMMUNICATIONS March 2020 Vol. 18 No. 1 (Issue 69), with topic: Domain Name and Identifier of Internet: Architecture & Systems. The first English monograph by theme of “Cyberspace UN” in the world has been published by Springer Publisher with title Co‐governed Sovereignty Network: Legal Basis and Its Prototype & Applications with MIN Architecture on 2021. His research interests include network architecture, cyberspace security, blockchain, distributed storage. As the first author, he has published four monographs with field on Future Network Architecture, Consensus Algorithms on Blockchain, and Distributed Storage Theory and System.

Han Wang received her BSc degree in communication engineering from Jilin University in 2017, followed by the completion of her PhD degree in computer application technology from Peking University in 2024. Currently, she holds the position of a postdoctoral fellow at PengCheng Laboratory. Her research interests include multi‐identifier network architecture, blockchain technology, and cybersecurity.

Preface

Undoubtedly, as an attempt to improve the shortcomings of the current global mainstream financial and monetary system, the birth of the decentralized peer‐to‐peer electronic money system – Bitcoin system in early 2009, and the birth of its core technology blockchain will be the most influential, long‐term, far‐reaching, and most disruptive technology in human history. Here are some examples:

Blockchain technology has the characteristics of decentralization, immutable, high security, and high trust due to its data distribution. Its function of executing trading orders or agreements according to the software of smart contracts is the first time in human history that make trust relationship being evolved from blood trust, clan trust, party institutional trust, and intermediary trust to the technological trust based on mathematical cryptography and global network.

The blockchain system is a trust machine, which subverted the Nobel Prize‐winning economist Herbert A. Simon's assertion that “trust and attention cannot be transferred, cannot be mass‐produced, and therefore cannot become a commodity.” Therefore, without intermediary, it directly realizes the low‐cost, high‐reliability trust commodity that can be supplied on a large scale and is the accelerator and catalyst for the progress of global social and economic activities.

The blockchain system is a truth machine, so it will end the past in which heroes can modify history, or even reverse history and fabricate history. With a decentralized record that global majority agrees to confirm, the truth about major historical events will be preserved forever.

The blockchain Internet makes the management of human society gradually enter the DAO era, that is, decentralized autonomous organization. It will gradually reduce the importance and management costs of traditional state management institutions. It will effectively curb the abuse of power by individual officials and significantly reduce the cost to fighting corruption. On the economic, financial, and monetary wealth system, the digital asset digital currency based on the blockchain gradually replaces the current sovereign paper money endorsed by the state, and the preservation of wealth may be easier. Seigniorage in every sovereign country will be gradually reduced.

The digital economy supply‐chain system combined with blockchain and smart contracts will likely end the historical economic model dispute between market economy and planned economy or the long‐term debate between private ownership and public ownership social system. After entering the industrial revolution, the improvement of productivity made the cyclical product surplus and unsalable leading to the cyclical economic crisis of capitalism. As an attempt to improve, the planned economy model was first realized in the former Soviet Union, but its highly centralized managing pattern and low efficiency made it fail in the Cold War. By the end of the Cold War, the world's leading scholars believed that the competition between social systems had been resolved.

However, the global financial crisis triggered by Wall Street in 2008 has not recovered, and it is clear that the market economy is not a panacea. The economy could continue to function well if real demand can be converted into supply and satisfaction at efficient market prices. Before the information technology has not reached the highly developed level of today's mobile Internet, the two extremes of overproduction or product shortage are easy to appear.

The blockchain smart contract system allows the commodity plans of valid demand to be satisfied at a reasonable price recognized by the market. Demand and supply are highly matched, plan and market are perfectly combined. In theory, the economic system can be sustainable, efficient, and stable, and all parties are satisfied. Therefore, the original economic theory needs to be reassessed. Thus, some economic experts believe that the blockchain‐based smart contract supply‐chain system enables humans to enter the blockchain welfare society, or the computer welfare society, and the reconstruction of economic theory is urgent.

Blockchain technology makes the Internet into the second half of blockchain Internet. The first half of the network is a centralized Internet, network management agencies and social platforms control the user's data, so Twitter can block the present US President's account, with tens of millions of fans instantaneously lost contact. In the second half of the decentralized network supported by blockchain, users have personal data, and the on‐chain data is immutable, making the historical truth recorded by most people forever exist.

Blockchain technology has been born for 15 years. Many of the goals outlined above are still in the development stage, waiting for real breakthroughs. Before they could be completely realized, there are a series of problems that need to be effectively solved, including the CAP trilemma of the consensus algorithm for consortium chain, the trusted security and reliability of smart contract technology, and the efficient cross‐chain protocol, etc., which are essential conditions for the large‐scale mature application of the blockchain Internet.

This monograph focuses on solving the blockchain CAP trilemma. The CAP conjecture, proposed in 2000, is that distributed systems cannot simultaneously satisfy strong consistency C, availability A, and guaranteed partition tolerance P. In 2002, it was proved to be a theorem. The long‐term successful operation of the Bitcoin system proves the correctness of the CAP theorem in the public blockchain. It gives up the strong consistency C, and replaced the consistency with high probability C， but guarantees the two characteristics of A and P, and the performance TPS of A is not high.

Public chains are constrained by the CAP theorem and cannot support large‐scale high‐intensity applications. Our research focuses on whether the consortium blockchain can release the constraint of CAP theorem. This monograph systematically reviews and summarizes the history of the development of consensus mechanism in distributed systems and introduces the principles of major algorithms in detail, including the earliest voting‐based consensus algorithm for Byzantine fault tolerance in history, and the proof‐based consensus algorithms in the recent years.

The team of authors first proposed the fusion of proof and vote consensus algorithm PoV, or PnV exactly, which combines the advantages of consortium chain voting‐base consensus algorithm and public chain proof‐base consensus algorithm. Its bandwidth usage reaches the lower bound of information theory and its availability. TPS performance can increase linearly with capacity of node resource. The PoV series protocols use verifiable random functions to ensure the security of the billing rights election process, and pipelining and parallelization methods are adopted in the consensus process to improve throughput performance while maintaining strong consistency. Theoretical analysis shows that under ideal conditions, the consensus throughput of PoV series protocol increases linearly with the increase of node resource capacity, and linear scalability is achieved in terms of availability.

In terms of partition tolerance of consortium blockchain, a multidimensional hypercube physical topology is proposed to solve the partition failure problem of physical layer, so as to ensure the stability and reliability of the system in the face of network component failure and avoid the occurrence of network partition failure. At the same time, a hierarchical recursive construction method of hypercube topology is proposed to reduce the number of long links required to construct physical networks. Theoretical analysis shows that in a large‐scale network with 256 nodes, the probability of partition failure per hour in the hypercube topology is only at the amount of 10 to the minus 18.

We believe that the scheme of PoV algorithm combined with the recursive N‐dimensional hypercube is the optimal solution of consortium blockchain CAP. The algorithm has won bids for technology projects from industry giants and has also been deployed and verified on five continents. This scheme will still applicable in the quantum age.

We apply the CAP‐free consensus algorithm of consortium blockchain to the identity management of Post‐IP multilateral co‐managed future network, and user logging of distributed storage systems. Think of it this way: when every user's access log can be traced, with the suitable cryptography to ensure the balance of privacy and management, the abstract and shadowy cyberspace will have an eternal sun light for the first time. Remember what the proverb said: “There is no sin under the Sun”; and Buddhism said, “There is nothing, where to provoke dust?” The security of cyberspace and the protection of digital assets have seen the dawn.

Hui Li

Professor of Peking University

Director PKU Lab, China Major Sci. & Tech. Infrastructure for Future Network

Chair of Tech. Committee, IEEE Blockchain Shenzhen Section

Member of the NAAI, Fellow of IET

Foreign Academician of Russia Academy of Natural Science

Member of Expert Committee of World Digital Tech. Academy, UN, Geneva

Tech. Exe. Director of Sino‐EU Intelligent Connected Vehicle & Autonomous Driving Industry Innovation Alliance (SASD)

Acknowledgments

The delivery of this book means a phased result of nine years' continuous exploration and practice in a laboratory of more than thirty people. In December 2015, we started to find a technical solution for post‐IP multilateral co‐managed global cyberspace, or the Cyber‐space United Nations. Consortium blockchain becomes a natural choice for us. However, the performance of the consortium blockchain at that time simply could not meet the needs of more than 200 sovereign countries in the world to jointly manage the world's top layer identity.

Nearly 80 people participated in the research and contributed to the results during the nine‐year academic journey, so the results of this book are essentially the summary of a laboratory team. We two authors are the beading artisans of these results, stringing together the pearls scattered all over the floor in our lab and around the world into what is now this necklace.

Prof. Hui Li was responsible for the overall planning, coordination, and partial writing of the book. The book is divided into nine chapters. Each chapter is almost the crystallization of some people's work, so it is difficult for us to tell who wrote which chapters. If must be quantified, it is probably the first author completed 2/3 of the work, and the second completed 1/3. We also sincerely thank Qiufan Wu, Rui Chen, Qi Lyu, Xinyuan Pei, Ranran Dang, Yongxin Song, Xiaopeng Wang, Jianming Lin, Shibiao Tan, and others from the MIN Team of Peking University Shenzhen Graduate School, part of a major national scientific and technological infrastructure, participated in the preparation of materials for some chapters. Hongjian Xing, Zhuoliang Xiao, Wuyang Li, Hang Li, Hong Tan, Xiaopeng Wang, Guogui Shi, Zhan Guo, Zheming Bao, Jiaqing Lv, and others were involved in the development of blockchain‐supported systems from MIN Team. We express our gratitude to all of them.

Hui Li has special thanks to Dr. Peter J. Major, Vice‐Chairman of United Nations Commission on Science and Technology for Development, and Founding Chairman of World Digital Technology Academy; Prof. Zhang Jing‐an, Academician of International Eurasian Academy of Sciences (IEAS Europe), and Chairman of the China Science and Technology System Reform Research Association; Prof. Yale Li, Chairman of Cloud Security Alliance (CSA) Greater China, Region Executive Chairman of the World Digital Technology Academy (WDTA) and Dr. Ramesh Ramadoss, Chair of IEEE Blockchain Technical Community, Member of Board of Governors, IEEE Standards Association for their prefaces to this book.

The research achievements of this monograph were supported by PKUSZ‐China Mobile Internet Joint Lab. for Sovereign & Trustworthy Internet funded by The China Mobile Internet Co. Ltd. [No.CMIC‐202400488]; Guangdong Provincial Key Laboratory of Ultra High Definition Immersive Media Technology; the National Keystone Research and Development Program of China [2017YFB0803204]; Foshan Innovation Team [2018IT100082]; Basic Research Enhancement Program of China [2021‐JCJQ‐JJ‐0483]; China Environment for Network Innovation GJFGW [2020]386, SZFGW [2019]261; Guangdong Province Research and Development Key Program [2019B010137001]; Guangdong Province Basic Research [2022A1515010836]; Shenzhen Research Programs [JCYJ20220531093206015, JCYJ20190808155607340]; Shenzhen Fundamental Research Program [GXWD20201231165807007‐20200807164903001]; ZTE Co. Ltd. Funding [2019ZTE03‐01] and Huawei Tech. Co. Ltd. Funding [TC20201222002].

Finally, we thank all reviewers for their invaluable comments and suggestions that improved the quality of this book, and the staff members from IEEE Press & John Wiley & Sons, Inc., for their efforts on publishing this work. Besides, thank you, the reader for reading this book. We wish that this book can help you with the scientific research and practical problems in Blockchain.

Prof. Hui Li, Dr. Han Wang

Shenzhen Graduated School

Peking University

Shenzhen China

On November 2024

Introduction

Blockchain technology, as a form of distributed ledger system, faces inherent constraints related to consistency, availability, and partition tolerance as defined by the CAP theorem from distributed theory. While consensus protocol optimizations at the software level have mitigated these constraints to some degree in recent years, such approaches ultimately represent trade‐offs between the properties rather than achieving the optimal theoretical values for all three simultaneously. That is, fundamental trade‐offs implied by CAP trilemma are an inescapable consideration for the architecture of blockchain networks. As the CAP trilemma establishes fundamental boundaries for distributed systems, software modifications alone cannot fully surmount the limitations it imposes on blockchain system design.

Compared to public blockchains, consortium blockchains have garnered considerable recent interest due to their node access control and promising efficiency performance, affording unique advantages for enterprise and industrial applications. However, as consortium blockchain networks scale to accommodate more participants and increased transaction volume, they increasingly confront constraints implied by the CAP trilemma. Unlike public blockchains, controllable node configuration within consortium blockchains potentially provides a means to address the CAP trilemma fundamentally at the physical layer. However, existing research exploring solutions to overcome trilemma constraints specifically for consortium blockchains remains limited.

This book aims to comprehensively solve the CAP trilemma challenge for consortium blockchains, considered a root factor impacting its real‐world adoption. Based on distributed theory and technologies, key techniques supporting the physical, network, consensus, and contract layers are presented for fully resolving the trilemma in large‐scale consortium blockchains. Practical application cases for network management and secure storage domains demonstrating efficient, stable operation are also examined. With quantum devices predicted to increasingly penetrate personal and enterprise use, the book further discusses the impact of quantum computing's unique advantages on classical distributed and blockchain theories, and prospects for quantum blockchains to overcome trilemma limitations.

The remaining chapters are structured as follows: fundamental concepts are covered in Chapter 1. Chapters 2–5 introduce technologies in each layer for trilemma resolution in large consortium blockchains, such as future‐oriented P2P protocols and proof‐and‐voting‐integrated consensus protocols. Chapters 6 and 7 present practical use cases. Chapter 8 provides an overview of emerging quantum blockchains. Chapter 9 discusses practical applications. This book is intended for use as an undergraduate/graduate textbook and reference for blockchain principles and applications, as well as a resource for engineers developing blockchain systems.

1Fundamentals of Blockchain

Blockchain, originating from Bitcoin, has emerged as one of the most revolutionary technologies in recent years. Its decentralized nature enables the establishment of trust, making it highly disruptive across various industries including finance, and offering a wide range of applications. Consequently, it has garnered significant attention from governments, financial institutions, technology companies, enthusiasts, and the media worldwide.

1.1 Introduction to Blockchain

In September 2008, the financial crisis, triggered by the bankruptcy of the American investment bank Lehman Brothers, erupted in the United States and rapidly spread globally. In response, governments and central banks worldwide implemented unprecedented fiscal stimulus measures and expansive monetary policies, offering emergency assistance to major financial institutions that found themselves in turmoil due to their own missteps. However, these actions sparked widespread skepticism about the traditional financial system and eroded public trust in currency systems underpinned by national credit.

In October of the same year, a cryptographic researcher, pseudonymously known as “Satoshi Nakamoto,” disseminated a paper (Nakamoto 2008) on Bitcoin with members of the enigmatic CypherPunk community through an email. The paper delineated a peer‐to‐peer electronic cash system that functioned without the need for a trusted third‐party entity and introduced the concept of the blockchain for the first time. By November, Nakamoto released an initial version of the Bitcoin code. In January 2009, he mined Bitcoin's first block, known as the “genesis block,” on a small server in Helsinki, Finland, marking the inception of Bitcoin. Nakamoto embedded the headline “Chancellor on brink of second bailout for banks” from The Times into the genesis block, symbolizing not only the dawn of a new era for decentralized currency but also a satirical jab at the old financial order.

Since its inception, Bitcoin has established itself as the most adopted system underpinned by blockchain technology. As the foundational technology derived from the Bitcoin system, blockchain is believed to possess the potential to revolutionize a myriad of sectors, including financial services, supply chain management, entertainment, smart manufacturing, public welfare, education, and employment.

By definition, a blockchain is a mechanism in a peer‐to‐peer networking environment that, through transparent and trustworthy rules, creates a chained data structure that is immutable, inalterable, and traceable, intended to execute and manage transactions. In a narrower sense, the blockchain is a sequential data structure where blocks of data are chronologically linked together and safeguarded cryptographically to ensure immutability and authentication. In a broader sense, it represents a novel distributed foundation and computing paradigm, utilizing a chained data structure to verify and store information. This approach employs distributed consensus algorithms to generate and update data, cryptographic methods to ensure secure data transmission and access, and smart contracts to program and manipulate data with automated script codes (Yuan and Wang 2016, pp. 481–494).

In the “Internet of Information” era, while online data was transparent and openly accessible, its credibility was questioned due to potential tampering, necessitating trusted third‐party institutions to vouch for its authenticity. Should these intermediaries collapse, such trust evaporates, rendering the inherent value of Internet data insubstantial. However, with the advent of blockchain, data on the Internet has been imbued with a newfound trustworthiness. Stored across countless global machine nodes, data becomes “stable,” “trustworthy,” and “unalterable.” Fundamentally, blockchain technology relies on a tamper‐resistant, shared distributed ledger, maintained collectively by all network member nodes. Cryptographic technology, rather than external trust, ensures the integrity of this ledger as nodes work to validate incoming data and transactions. It records all transactional data comprehensively through a chained data structure. As a result, the blockchain is seen as the most promising driver in transitioning from the “Internet of Information” to the “Value of Information.” The blockchain is characterized by three prominent features: decentralization, immutability, and trustlessness.

Decentralization

: The network structure of blockchain adopts a peer‐to‐peer architecture, with equal status among nodes and no existence of a super administrative node, thus embodying the decentralized characteristic of blockchain. This is different from the centralized architecture of the client/server (C/S) service model. In a peer‐to‐peer network, each node is both a server and a client, relying on user groups rather than central servers to exchange information. All nodes collectively maintain the resources and services within the network, and the transfer of information and the provision of services are carried out directly between nodes, eliminating the need for intermediary nodes and servers. Since services are distributed among various nodes, an attack or damage to part of the network has minimal impact on other parts, making the entire system resilient and highly fault‐tolerant. On the other hand, the middle cost of data value exchange in peer‐to‐peer networks is very low, reducing the resource and time costs induced by centralization.

Immutability