Distributed Technologies and Consensus Algorithms for Blockchain

Introduction

Centralized systems have a single point of control. They work based on the client-server paradigm. Issues in centralized systems are single-point failure, less fault tolerance, easy to hack, and lack of trust. It has less maintenance cost. Decentralized systems have multiple authoritative nodes that coordinate the system. In decentralized systems, there is no single-point failure, it is difficult to hack, trust is higher and is more reliable. Nodes of distributed systems are located in a distributed fashion; they have equal authority and act as peer nodes. They prevent single-point failure and are more robust because of data replication. It has high throughput and is more reliable.

A database is a centralized ledger that stores data in a structured fashion. It is maintained by an administrator and is designed for Create, Read, Update and Delete (CRUD) operations. It works based on client-server architecture. It is recommended to store confidential relational data that need not be verified. A blockchain is decentralized and works based on distributed ledger architecture. It has READ and APPEND operations. It has complex algorithms for maintaining the blockchain. It is recommended where sharing, validation, and verification are required. Blockchain is a decentralized distributed ledger that stores information as a trusted entity by avoiding any middlemen. Various implementations of distributed ledger technologies are discussed by El Ioini and Pahl (2019).

A Group of transactions is held in a block, and the blocks are linked as a chain by storing the next block's hash in the previous block. A blockchain is recommended if redundant copies are to be maintained in distributed nodes if participating entities are not known to each other and are from different organizations; if a trusted 3^rd party is required and if state information is to be stored.

Monrat et al. (2019) have curated blockchain architecture, structure, consensus algorithms, challenges, and typical use cases. Albayati et al. (2020), recommends regulatory support from the government, and enhanced user support has a major impact on building trust amongst users to adopt blockchain. Rizal Batubara et al. (2019) have also stressed the need for transparency and accountability for the widespread usage of blockchain. Al-Jaroodi and Mohamed (2019) have identified the requirements and benefits of blockchain implementation for healthcare, finance, logistics, manufacturing, energy, agriculture, robotics, and entertainment applications. Zheng et al. (2018) and Risius and Spohrer (2017) have reviewed the research perspective of blockchain framework.

This chapter gives an overview of blockchain properties, components, types, structure, operations, technologies, and consensus algorithms. Blockchain technologies focus on different technologies available to build a blockchain-based application and underlying framework. Each of these technologies provides additional support for authentication, transaction verification, consensus algorithm, identification, access control, and rewarding mechanism. Consensus algorithms are those used by peer nodes present in a distributed blockchain network to arrive at a consensus to decide on the next block that must be added to the blockchain. The nodes that run these algorithms are rewarded in public networks and are designated in the case of a private network.

Properties Of Blockchain

Following are the properties of blockchain that aid in building trust amongst unknown peers and various entities that use the information stored in a blockchain.