Project work- Block Chain- Week 2

A BRIEF INTRODUCTION TO BLOCKCHAIN

The Trust Machine, THE ECONOMIST, Oct. 31, 2015  “To understand the power of

blockchain systems, and the things they can do, it is important to distinguish between three things that are commonly muddled up, namely the bitcoin currency, the specific blockchain that underpins it and the idea of blockchains in general.”

Phone vs. Blockchain

Phone  The idea of a phone network

 A specific phone network (e.g., AT&T)

 A specific use of the phone network (e.g., fax)

Blockchain  The idea of blockchain

 The specific blockchain that underlies Bitcoin or another coin offering

 Bitcoin or another cryptocurrency

What is Blockchain?

A technology that: permits transactions to be gathered into blocks and recorded; cryptographically chains blocks in chronological order; and allows the resulting ledger to be accessed by different servers.

What is a Distributed Ledger?

Centralized Ledger  There are multiple ledgers, but Bank holds

the “golden record”

 Client B must reconcile its own ledger against that of Bank, and must convince Bank of the “true state” of the Bank ledger if discrepancies arise

Distributed Ledger  There is one ledger. All Nodes have some

level of access to that ledger.

 All Nodes agree to a protocol that determines the “true state” of the ledger at any point in time. The application of this protocol is sometimes called “achieving consensus.”

What is a Distributed Ledger?

Single Entity Multiple Entities

How Might A Distributed Ledger Work?

Where Might Blockchain Use Cryptography?

The Power of Distributed Ledgers

 The degree of trust between users determines the technological configuration of a distributed ledger.

The Power of Distributed Ledgers

Participation Open Closed

Permission Permissionless Permissioned

Ledger Design One ledger One ledger or Segregated ledgers

Validation Methodology depends on degree of trust between nodes. Where there is no basis for trust, may be achieved through proof of work, which requires the algorithmic solving of a cryptographic hash.

Consensus Mechanism

Mechanism depends on degree of trust between nodes. Where there is no centralized authority, consensus may be determined algorithmically.

References

 Burns, S. (2019). Blockchain: Hype Vs Reality. Computer Weekly, 21-24. Retrieved from http://search.ebscohost.com/login.aspx?direct=true&AuthType=shib&db=f5h&AN=138564674&site=eds-live

 Carson, B., Romanelli, G., Walsh, P., & Zhumaev, A. (2018). Blockchain beyond the hype: What is the strategic business value? McKinsey Quarterly, (4), 118–127. Retrieved from http://search.ebscohost.com/login.aspx?direct=true&AuthType=shib&db=buh&AN=133693412&site=eds-live

 Stoyanovich, M., & Tanz, F. E. (2019). Coming to Grips with Blockchain. Benefits Magazine, 56(5), 20-25. Retrieved from http://search.ebscohost.com/login.aspx?direct=true&AuthType=shib&db=f5h&AN=135900272&site=eds-live

 Tarzey, B. (2019). Inside Blockchain and Its Various Applications. Computer Weekly, 16-20. Retrieved from http://search.ebscohost.com/login.aspx?direct=true&AuthType=shib&db=f5h&AN=138681123&site=eds-live

 Waldo, J. (2019). A Hitchhiker’s Guide to the Blockchain Universe. Communications of the ACM, 62(3), 38–42. Retrieved from https://doi.org/10.1145/3303868