Blockchain and Its Integration as a Disruptive Technology

Blockchain and Its Integration as a Disruptive Technology

Dhanalakshmi Senthilkumar
Copyright: © 2020 |Pages: 30
DOI: 10.4018/978-1-5225-9687-5.ch010
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Blockchain is the process of development in bitcoin. It's a digitized, decentralized, distributed ledger of cryptocurrency transactions. The central authorities secure that transaction with other users to validate transactions and record data, data is encrypted and immutable format with secured manner. The cryptography systems make use for securing the process of recording transactions in private and public key pair with ensuring secrecy and authenticity. Ensuring bitcoin transaction, to be processed in network, and ensuring transaction used for elliptic curve digital signature algorithm, all transactions are valid and in chronological order. The blockchain systems potential to transform financial and model of governance. In Blockchain, databases hold their information in an encrypted state, that only the private keys must be kept, so these AI algorithms are expected to increasingly be used, whether financial transactions are fraudulent, and should be blocked or investigated.
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Blockchain is a decentralized, distributed database used to maintain a continuously growing list of records, called blocks. Each block contains a timestamp and a link to a previous block. Blockchain serves as an open distributed ledger that can record transactions between two parties efficiently and in a verifiable and permanent way (Bruyn, 2017). Blockchain technology uses bitcoin; bitcoin is the first official cryptocurrency in the form of electronic cash. Bitcoin and its underlying Blockchain technology were first conceptualized by Nakamoto (2008) but implemented in 2009, as a core peer-to-peer version of an electronic cash system. These cash systems allow online payments to send directly from one party to another party without the central trusted authorities like bank systems or payment services (Nakamoto, 2008). Blockchain consists of a peer-to-peer network. It consists of a network of nodes that maintain a decentralized shared database of records. Records on the other hand, transfer the transactions of bitcoin cryptocurrency between participating parties. Each party in the transaction has a public and private key pair of public key infrastructure (PKI). Transaction parties sign the transactions using their private key, verified by other parties using a public key. The transactions are broadcast to all the other nodes in the network (Shen & Pena-Mora, 2018). This permits bitcoin to be used like other assets in exchange for goods and services. Additionally, it is easily portable, divisible and irreversible. Bitcoin uses blockchain technology to maintain its public ledger of every single transaction ever made with Bitcoin.

In the understanding of blockchain technology, four kinds of keywords are essential. The four keywords are open, distributed or decentralized ledger, efficient, verifiable and permanent. The first keyword is open; whatever information you are putting inside the blockchain should be accessible to all; everyone will be able to observe and validate that information. The second keyword is a distributed ledger, where a copy of that public ledger to every individual party who is there in the platform as well as their communicating with each other is kept, so that the platform can be either distributed or decentralized based on a given application. The third keyword is efficiently. It is important to ensure the efficiency of the information and efficiency of the protocol. Furthermore, the protocol needs to be fast and scalable. The fourth keyword is verifiable. It is a crucial keyword that permits all on the network to check the validity of information. The final keyword is permanent, which indicates that all information registered in the blockchain remains persistent. It is sometimes referred to as tamper proof (Iansiti & Lakhani, 2017). Tamper proof signifies that once the information is registered into the blockchain, the information will not be able to be modified nor updated in future time. The blockchain technique thus ensures that all bitcoin transactions are recorded, organized and stored in cryptographically secured blocks, chained in a verifiable and persistent manner.

In the course of blockchain implementation, three basic capabilities are supported in the bitcoin network techniques; They are; a) hash chained storage where two fundamental building blocks can be used for hash chained storage capabilities, namely, hash pointer and merkle trees, b) digital signature: by using cryptographic algorithm, establishes the validity of data items, and c) commitment consensus: this technique secures the expansion of the global ledger and precludes malicious attacks (Zhang, Xue & Liu, 2019).

Blockchain can be classified into three categories: Public blockchain, Consortium blockchain, and Private blockchain.

Key Terms in this Chapter

Bitcoin: Bitcoin is a complete decentralized peer to peer and permission less cryptocurrency, it’s a form of electronic cash system with completely decentralized; cannot be any central party for ordering or recording or controlling your currency like bank or government.

Hyderledger Fabric: Is responsible for ordering a sequence of transactions into blocks and it go it is going to deliver these sequence of totally ordered transactions to all the pears in the network.

Artificial Intelligence: Simulation of human intelligence processes by machines; these processes include learning, reasoning, and self-correction. To perform tasks commonly associated with intelligent beings.

Supply Chain Management: the management of the flow of goods and services involves the movement and storage of raw materials, of work-in-process inventory, and of finished goods from point of origin to point of consumption. It’s the network to be connected of individuals, organizations, activities, resources and technologies, sale of product or service.

Merkle Tree: Merkle tree is a tree structure, where the leaf nodes they will contain the hash of the document and every individual node or intermediate node, they will contain the hash of the combination of the left child under a right child.

Permissioned Blockchain: It works in open environment and large network of participants, so the participants do not need to reveal their own identity, the users do not need to reveal their own identity to other peers. It’s something called private model. In a permissioned blockchain, only a restricted set of users have the rights to validate the block transactions.

Blockchain: Blockchain is a decentralized computation and information sharing platform which enables multiple authoritative domains that do not trust each other to cooperate coordinate and collaborate in a rational decision-making process.

Digital Signature: It is a mathematical scheme for presenting the authenticity of digital messages or documents, it uses public and private keys to encrypt and decrypt the data.

Permissionless Blockchain: Here anyone can join the network, participate in the process of block verification to create consensus and also create smart contracts. Permissioned blockchains do not have to use the computing power-based mining to reach a consensus since all of the actors are known.

Distributed Ledger Technology: It’s a decentralized technology to eliminate the need for a central authority or intermediary to process, validate or authenticate transactions or other types of data exchanges.

Smart Contracts: Its basically provide a decentralized platform, which can be utilized to avoid the intermediately in a contract. It’s an automated computerized protocol used for digitally facilitating, verifying or enforcing the negotiation or performance of a legal contract by avoiding intermediates and directly validating the contract.

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