Abstract
The global popularity of digital cryptocurrencies and research in a decentralized system have led to the foundation of blockchain, which is fundamentally a public digital ledger to share information in a trustworthy and secure way. The concept and applications of blockchain have now spread from cryptocurrencies to various other domains, including business process management, smart contracts, IoT, and so on. Cryptocurrency is a mechanism designed to work for the online secure payments system using cryptography. Cryptography maintains confidentiality, integrity, and authentication. Cryptocurrency has come as a novel way of making payments that keep all the transactions secure and safe, which avoids any type of intermediaries such as a bank. This chapter will shed light on the concept of blockchain technology, security, and its applications in various domains.
TopIntroduction
The system refers to organisation of different elements which collectively works for a common purpose. In the case of database and computer networking environment, this can be categorised in three basic types as Centralized System, Decentralised System, and Distributed System.
Centralized System: A centralized system has complete reliance on single point which could be turn out to be a complete failure for all associated system if the single point failures occur. Fig. 1 refers to the schematic diagram of centralized system (J. Yli-Huumo, et al., 2016).
Decentralised System: A decentralised system don’t have any central authority in this system each node can take independent decisions. Decentralised system gives freedom for lower level component to compute local information to accomplish global goal (i.e. Transaction). Fig. 2 refers to the schematic diagram of decentralized system.
Distributed System: The distributed system is a network of autonomous components that cooperate, coordinate to achieve a common goal. It help in resource sharing and provide user a view of a single network. They share resources such as software (file, databases, and links), hardware (printer, processor, memory). Fig 3. Refers to the schematic diagram of distributed system (Z. Zheng et al., 2017)
The blockchain is a decentralized computation and information sharing platform that enables multiple authoritative domains, who don’t trust each other, to cooperate, coordinate and collaborate in a rational decision making process.
The decentralised system which exists in blockchain system provides consistent database support for every transactions that happens. It is an open, distributed ledger that can record transactions between two parties efficiently and in a verifiable and permanent way (Chen, G., et al. 2018).
Pros And Cons Of Distributed, Centralised, Decentralised Systems
- 1.
Maintenance /Points of Failure:
- a.
Decentralized have more but still finite numbers of failure.
- b.
Distributed systems are the most difficult to maintain.
- c.
Centralized systems are easy to maintain as there is only a single point of failure.
- 2.
Fault Tolerance / Stability:
- a.
Centralized systems can be highly unstable and intolerable due to single point failure may ruin the whole working system.
- b.
Decentralized are stable system as compared to centralized system as if failure of the leader in decentralized doesn’t harm the rest of the system and still you will have a stable network working in synchronisation.
- c.
Distributed systems are much more stable and a single point of failure doesn’t do much harm.
- 3.
Ease of Development / Creation: Centralized systems can be created rapidly, and in easy way just have to build a central server for commanding/managing the connected components. For Decentralized and Distributed systems, one have to first work out the lower level details like resource sharing (Hardware/Software), trade (Transaction) and communications (Network) and it imposes a certain level of difficulty in maintaining these system to its coherent state.
- 4.
Max Number of Users Added to the System/ Scalability:
- 5.
Diversity / Evolution: As centralized systems shadow a single framework, they don’t have diversity and grow gradually. But for distributed systems and decentralized systems, once the elementary infrastructure is in place, evolution is remarkable.
Key Terms in this Chapter
Block: A block is a container data structure which contain series of transactions. Each transaction within a block is digitally signed and encrypted and verified by the peer node of blockchain network.
Cryptocurrency: Cryptocurrency is a mechanism designed to work for the online secure payments system using cryptography.
Blockchain: The Blockchain is a decentralized computation and information sharing platform that enables multiple authoritative domains, who don’t trust each other, to cooperate, coordinate and collaborate in a rational decision making process.
Bitcoin: Bitcoin is a cryptocurrency, a form of electronic cash. A purely peer-to-peer version of electronic cash would allow online payments to be sent directly from one party to another without going through a financial institution