Blockchain Technology: Principles and Algorithms

Blockchain Technology: Principles and Algorithms

Mohammad Khalid Imam Rahmani
Copyright: © 2022 |Pages: 12
DOI: 10.4018/978-1-7998-8382-1.ch002
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Abstract

Blockchain is a distributed decentralized peer-to-peer network aiming to facilitate the immutability and security of data. Towards the service orientation, blockchain is a collection of distributed blocks having unique hash codes without any point of failure. Each block is stored on distributed ledgers, and transactions with them are secure, transparent, immutable, and traceable. To create a new block and allow a transaction to complete, an agreement between all parties is required. To reach an agreement in a blockchain network, consensus algorithms are used. In this chapter, fundamental principles and algorithms of blockchain networks have been discussed, and a detailed review of the blockchain consensus algorithms PoW, PoS, DPoS, PoET, PoWeight, PoB, PoA, and PoC have been provided including the merits and demerits of consensus algorithms with analysis to provide a deep understanding of the current research trends and future challenges.
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Working Procedure

Ledgers are used to record all transactions of a company through bookkeeping. There are two conventional bookkeeping methods: Single-entry and Double-entry methods. Single-entry ledgers are not transparent so their accountability is questionable. Similarly, one party cannot easily verify another party’s records from a double-entry ledger. Moreover, traditional ledgers can easily be edited by adding, removing, or changing records. Parties would not trust such a system. Public Blockchain technology solves these issues by further enhancing the traditional bookkeeping method to a Triple-entry method wherein, every transaction in a blockchain network is cryptographically sealed by the third entry. This third entry is verified by a distributed consensus algorithm and stored in a secured block of the network. These consensus algorithms also decide how to create a new block in blockchain (Matthew, 2021).

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