Blockchain: Past, Present, and Future

Blockchain: Past, Present, and Future

Duarte Teles (The Instituto Politécnico do Porto, Portugal) and Isabel Azevedo (The Instituto Politécnico do Porto, Portugal)
DOI: 10.4018/978-1-5225-7949-6.ch002

Abstract

This chapter provides a conceptual understanding of blockchain, its purpose, and fundamental concepts before discussing two prominent blockchains, Bitcoin and Ethereum, which are, respectively, representative of the first and second generations of this technology. Some applications that are characteristic of the third generation are presented along with their potential and limitations. They also serve to substantiate some of the problems that are discussed later. Thus, the current developments that are addressing the most pressing current issues and the approaches to overcome them are discussed in the vision of the future of blockchain. What will be the fourth generation, with obligatory resolution or mitigation of many of these problems, which could lead to a widespread adoption of the technology in several other sectors, is described.
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Overview Of Blockchain Technology

A blockchain is essentially a public ledger of every transaction ever taken place or, in other terms, a list of records linked together via cryptography called blocks. Each contains transaction data, a timestamp and a cryptographic hash to the previous block (a link), as displayed in Figure 1. Every previous block cannot be altered, changed or edited; cryptography ensures that any change to the contents of a previous block in the chain would invalidate the data in every block after it. This way, a blockchain is by design resistant to modification of its data; it is also immutable and distributed.

Figure 1.

The blockchain: several valid blocks linked together

978-1-5225-7949-6.ch002.f01

A blockchain uses peer-to-peer technology for multiple computers to be connected between them. It can be therefore described as a peer-to-peer network composed of computers (or more commonly known as nodes) where anyone can join, freely and anonymously. This way, it embraces the distributed nature of a computer network, where there is no central authority controlling it and is therefore highly resistant to censorship. For this reason, a blockchain is often characterized as a decentralized network.

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