Origins and Future Directions of Blockchain Research

REVIEW

Blockchain and the related issues: a review of current research topics

Yang Lua,b*

aDepartment of Information System and Decision Sciences, University of Kentucky, Lexington, KY, USA; bAlliance Manchester Business, University of Manchester, Manchester, UK

(Received 31 January 2018; revised 13 August 2018; accepted 23 August 2018)

The blockchain represents emerging technologies and future trends. For the traditional social organization and mode of operation, the development of the blockchain is a revolution. As a decentralized infrastructure and distributed general ledger agreement, the blockchain presents us with a great opportunity to establish data security and trust for automation and intelligence development in the Internet of Things (IoT) and it creates a new un-centralized programmable smart ecosystem. Our research synthesizes and analyses extant articles that focus on blockchain-related perspectives which will potentially play an important role in sustainable development in the world. Blockchain applications and future directions always attract more attention. Blockchain technology provides strong scalability and interoperability between the intelligent and the physical worlds.

Keywords: blockchain; blockchain-as-a-service (BaaS); smart contract; Internet of Things (IoT); cryptocurrency; Bitcoin; Ethereum; Hyperledger

Introduction

The blockchain consists of non-destructive and immutable decentralized shared ledgers that can group data blocks into specific data structures in chronological order (Narayanan, Bonneau, Felten, Miller, & Goldfeder, 2016). Alternatively, the blockchain is an entirely new approach that uses distributed consensus mechanisms to generate, verify, process, and update data, uses a cryptographic chain block struc- ture to validate and store data, and uses automatic scripting code (smart contracts) to program and manipulate data (Wright &De Filippi, 2015). The blockchain is an inno- vative approach that provides us with secure, transparent, anonymous, decentralized, low-cost, and reliable data or asset transactions in a decentralized network (Crosby, Pattanayak, Verma, &Kalyanaraman, 2016; Iansiti & Lakhani, 2017). Bitcoin (Naka- moto, 2008) is not the starting point of the distributed system, but it has ignited the blockchain.

According to Gartner’s report of hyper cycle for emerging technologies (Gartner Report, 2015, 2016, 2017), cryptocurrency and the blockchain are emerging technol- ogies, among the 2000 technologies. Specifically, cryptocurrency was at a “Trough of Disillusionment” in 2015, and blockchain was at a “Peak of Inflated Expectations” in both 2016 and 2017 (Figure 1). Cryptocurrency is one of the most successful of the many blockchain applications. Globally, more and more businesses are accepting

© 2018 Antai College of Economics and Management, Shanghai Jiao Tong University

*Email: [email protected]

Journal of Management Analytics, 2018 Vol. 5, No. 4, 231–255, https://doi.org/10.1080/23270012.2018.1516523

cryptocurrency as actual currency in transactions. As of June 2018, there are 1591 cryptocurrencies worldwide, with a total market value of over 247 billion U.S. dollars. Among them, Bitcoin’s market value accounts for about 42.5% of the total market value, while Ethereum and Ripple ranked second and third, respectively. In the beginning, except for a few professionals who know about the blockchain, a lot of people knew about Bitcoin because of speculative investment and profits. According to Blockchain.info and Coinmarketcap.com, the peak of bitcoin appeared on 17 December 2017, when it reached a record high value of USD 20,089.00 per coin.

As a decentralized infrastructure and distributed computing paradigm, blockchain can construct new protocols to help countries or organizations to perform previously unsolved affairs. As marijuana became a legitimate consumer product in North America, state by state, Canada (Government of Canada, 2016, 2017) launched a “seed-to-sale” blockchain-embedded supply chain tracking system to reduce regulat- ory costs, to enhance public safety, and to undermine illicit markets. The system has now been extended to some states in the United States (Abelseth, 2018). To solve 78% of unregistered land and related corruption issues (Ogundeji, 2016), a non- profit company uses Bitland to provide property registration and authentication ser- vices to the Ghana Land Commission (Kshetri & Voas, 2018). Three other countries (India, the United Arab Emirates (UAE), and Sweden) have also begun to use block- chain technology to develop property registration systems (LawFuel Editors, 2017). Some international organizations also use the blockchain to help. For example, The UN’s World Food Program (WFP) helped refugees from Pakistan (Menezes, 2017) and Syrian refugees in Jordan (Wong, 2017).

The blockchain is expected to reshape human social activities and Internet. The development of the blockchain has attracted broad attention from leading high-tech

Figure 1. Development position of blockchain in Gartner hype cycle.

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companies and from business markets. IBM first proposed the concept of BaaS (block- chain as a service) in 2016. Baas (Samaniego &Deters, 2016) is a service platform, and the company hopes to use blockchain similar to the way Infrastructure-as-a-service (IaaS), Platform-as-a-service (PaaS), and Software-as-a-service (SaaS) are used, in order to provide services to customers. Microsoft launched blockchain research in 2014 and cooperated with Consens. In December 2015, NASDAQ took the lead in launching the Linq, a securities trading platform based on blockchain technology, which has become an important milestone in the decentralization trend of financial and security markets. In 2016, Microsoft opened a sandbox blockchain service based on the Azure platform. Google and Amazon also joined the BaaS business in 2016.

The paper conducted an extensive literature review by exploring relevant articles from five major academic databases (IEEE Xplore, Web of Science, ACM digital library, INSPEC, and ScienceDirect) to describe and to recognize the current status and the potential research directions regarding the issues of blockchain. Our survey pays attention to identifying the principles and functions of the blockchain process and highlighting practical applications in diversified industries. According to the five databases, there exist a large number of journal articles and conference papers related to blockchain, regarding its expertise in smart contract, IoT, security, and other applications.

The structure is outlined below. Section 2 depicts an in-depth review of blockchain features and open source projects, and we proposed a three-phase blockchain develop- ment trend to explain the blockchain in detail. Two important components, the smart contract and security, are illustrated in Sections 3 and 4, respectively. The major block- chain applications are discussed in Section 5. Section 6 discusses research challenges and future trends. The conclusion is Section 7.

Background and current research in blockchain

Blockchain technology is a miracle, and it is developing so quickly. The blockchain is still in its infancy, but it is already in its second phase. The uniqueness of the block- chain is the reason that more and more practitioners and scholars are paying attention to this technology. The development of the blockchain is discussed and explained below (Figure 2). Then, common features and three types of blockchains are described in details. In addition, we will introduce two outstanding blockchain-based platforms and projects: Ethereum and Hyperledger.

Developing trend

Swan (2015) described the overall development of the blockchain in his book. We classify the development of the blockchain into three streams. The first and second streams are the same as Swan’s (2015) categorization. The first stream is Blockchain 1.0, which basically comprises Bitcoin and other cryptocurrencies in the capital markets. The second stream is Blockchain 2.0, which is mainly embedded in distrib- uted ledger agreements and the related core technologies, such as smart contracts and modified consensus protocols. The next generation blockchain is referred to Extensive Blockchain. The blockchain will revolutionize people’s lives and

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interactions. Blockchain systems with different functions will seamlessly connect and interact.

Blockchain 1.0 & 2.0

Blockchain 1.0 is basically Bitcoin and other cryptocurrencies. With the booming of Bitcoin, the basic technology of the blockchain solves the problems of integrity, secur- ity, and authenticity, quickly attracting public attention (Tschorsch & Scheuermann, 2016). Blockchain technology guarantees the integrity, the non-repudiation, and the security of transaction data through digitally signed transaction chains, blockchain (including pre-hash blocks), and negotiation mechanisms, and there is no trust between related parties.

The importance of the blockchain has been gradually discovered and applied. Satoshi Nakamoto introduced and explained the concept of Bitcoin and Blockchain. The following features have received extensive attention. (1) Decentralization. Without central control, blockchain technology does not rely on third-party organiz- ations or hardware facilities. (2) Openness (Lin & Liao, 2017). Blockchain technology is open source, and its data is open to anyone. Anybody can query blockchain data and can develop related applications through open interfaces. (3) Independence (Conos- centi, Vetro, & De Martin, 2016). Based on agreements and protocols, all nodes can automatically and securely verify and exchange data within the system, without any intervention. (4) Safety. Security is a complex issue that is affected by internal and external factors. Theoretically, if you can control 51% of all of the data nodes (Karame, Androulaki, & Capkun, 2012), you can falsify or alter the data in the block- chain system. In practice, no one will try this, because of the costs. (5) Anonymity (Christidis & Devetsikiotis, 2016; Reid &Harrigan, 2013). Unless it is legally required, there is no need to disclose or to verify the identity or the related information of each node.

Figure 2. The potential developing trend of blockchain.

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For example, in July 2013, Mastercoin (Omni) extended the Bitcoin function through a meta-protocol. In December 2013, NXT (Future Coin) became the first complete PoS blockchain. In 2013, Bitshares (bit stock) appeared, and NXT and CounterParty formed “digital assets.” In addition to Lisk, TheDAO was proposed in May 2016. These cryptocurrencies are based on blockchain technology.

Smart contracts have strengthened the mutual trust mechanism among users in IoT and have become the core technology of Blockchain 2.0. There are two main aspects. One is the digitization of assets, if the assets need to be or could be digitalized in blockchain. The other is the smart contract, which is also the biggest difference in the advancement of Blockchain 2.0, compared with Blockchain 1.0. The smart con- tract can implement real-world logic in Blockchain through an advanced program- ming language, such as Ethereum and Hyperledger. Many real-world complex systems can be achieved through smart contract in the blockchain system.

Digital assets and smart contracts exist in digital form and, as such, they are becoming more and more popular. Blockchain technology applied to digital assets and smart contracts can more effectively track how their content is generated and can prove the attribution and the authenticity of the content.

Blockchain 3.0

The first two streams were similar, but the explanation of the next generation of Block- chain was vague. Swan (2015) only enumerated its potential application, defined as justice, efficiency, and coordination applications that it will reach in the future. It is not easy to precisely define the next generation of the blockchain, because of its rapid development. In the near future, the blockchain will have the ability to integrate and to interoperate (Lu, 2016, 2017) IoT, Artificial Intelligence (AI), and other emer- ging technologies to provide high quality services for society. The blockchain has potential to be the organizational structure for internetting everything and for hetero- geneous data. Blockchain 3.0 describes the era of programmable society. The decen- tralization and the consensus mechanism of blockchain technology will develop to new heights, affecting both human ideology and social form. This phase is the third phase of the development of the blockchain. Blockchain technology is likely to be applied across all aspects of people’s lives and society.

Common features of blockchain

The blockchain has a decentralized structure without central control. Blockchain tech- nology does not rely on third-party organizations or on hardware facilities (Croman et al., 2016). There is no top-down centralized or hierarchical management structure in the blockchain, but rather, a macro-auto-adapted system in which moves from bottom to top, micro-interaction and competition, among network nodes. The rights and obligations of any node in the blockchain are the same, and each node has a complete record of transactions. Thus, the damage to, or loss of, one or any node or nodes will not affect the blockchain system (Viriyasitavat & Hoonsopon, 2018; Yli-Huumo, Ko, Choi, Park, & Smolander, 2016).

The blockchain employs a consensus-based data update mechanism. The newly generated data must be verified by all or most of the nodes before it can be written into the shared ledger maintained by all blockchain nodes. Hence, it is difficult to

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modify or forge. Any node in a distributed system can participate in the process of reading, writing, validating data, and building consensus on the chain, and can obtain incentives based on one of four common consensus mechanisms: Proof-of- Work (PoW), Proof-of-Stake (PoS), Delegate Proof of Stake (DPoS), or Practical Byzantine Fault Tolerance (PBFT).

The difference among the first three consensus mechanisms is who has authority rights. Specifically, in PoW, all nodes compete for the rights fairly through computing power (Gervais et al., 2016). PoW is the popularly deployed consensus mechanism in existing blockchains (Garay, Kiayias, & Leonardos, 2015). With PoW, the probability of mining a block depends on the work done by the miner. In PoS, account permissions belong to the node of highest interest with less vulnerability to attacks (Szabo, 1997). PoS is an energy-saving alternative to PoW. In DPoS, the delegates are selected by sta- keholders to control the permissions for verification and for accounting (Larimer, 2014). DPoS is the backbone of Bitshares (Wright, 2015). PBFT is a replication algorithm to tolerate byzantine faults (Castro & Liskov, 1999). Hyperledger is one blockchain plat- form that implements PBFT. How to improve scalability poses a challenge to the devel- opment of consensus mechanisms. Vukolić (2015) integrated PoW with the PBFT protocol to achieve a high level of scalability. With the different requirements of block- chain applications, a diversity of modified protocols has been established.

The blockchain system establishes a privacy-based reliable public data reading mechanism (Narayanan et al., 2016). Based on agreements and protocols, all nodes can automatically and securely verify and exchange data within the system without any intervention. The data in the blockchain system is encrypted and has varying degrees of anonymity (Heilman, Baldimtsi, & Goldberg, 2016). SHA-256 series are the most popular hash functions used in blockchain and cryptocurrency.

Unless legally required, there is no need to disclose or verify the identity or the related information of each node. Data needs to be verified with a timestamp before it is written into the blockchain. The entire blockchain system is open and transparent; everyone can access and read data and nodes with maintenance functions. Anyone can query blockchain data and can develop related applications through open interfaces (Bonneau et al., 2015).

Basic types of blockchain

Blockchain technology has evolved into three modes: the public blockchain, the consortium (hybrid) blockchain, and the private blockchain. The public chain is a fully decentralized blockchain. Bitcoin is public cryptocurrency that represents the public chain. The consortium blockchain is a partially distributed (or multi- center) blockchain. It applies to the union of multiple entities. The consensus process is controlled by a set of predefined nodes. For example, the generated block needs to be verified by at least five of the ten pre-selected consensus nodes. Hyperledger lies on this scale; it is employed to financial markets and healthcare pro- jects. The private blockchain is a centralized blockchain. It applies to internal data management and to the auditing of specific organizations. The written permission is controlled by the central management authority, and the read permission can be selectively opened by related entities. Healthcare management and governance are potential areas for adopting the private blockchain (He et al., 2016; Lin & Liao, 2017; Zheng, Xie, Dai, Chen, & Wang, 2017).

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Key open source projects of blockchain

Ethereum

Ethereum1 (Buterin, 2013) is a good blockchain smart contract platform that runs arbitrary user-defined programs, optimizes the number of tree structures in the block, and improves scalability, security, and flexibility. It is a platform to facilitate the development of decentralized applications on top of the blockchain. The data structure is the Merkle Patricia tree, which is an encrypted authentication data struc- ture for storing key-value pairs. Ethereum uses different trees for different objects: a transaction tree, a receipt tree, and a status tree. Each tree, in the three trees, has its own responsibility and handles different tasks. The transaction tree handles trans- action information, such as whether a transaction occurs, which transaction is blocked, transaction queries, etc. The receiving tree is responsible for recording all operations. The status tree handles information such as account validity, account balance, and so on (Wood, 2014).

Ethereum (Buterin, 2015) also provides a good upper service/application develop- ment platform: EVM language (Ethereum Virtual Machine code). The EVM runs as a sandbox and provides an isolated execution environment. Ethereum is a widely used open-source smart contract application platform based on the blockchain; this system is specifically designed to use Solidity language (compiler). Solidity language can implement various types of smart contracts, such as supply chain, accounting, and shopping. Ethereum provides Json-RPC, JavaScript, Geth for external interfaces (Wood, 2014).

Hyperledger

Hyperledger2 was originally an Open Blockchain project developed by IBM. It was later donated to the HyperLedger Project under the Linux Foundation to form the current hyperledger. According to HyperLedger’s design goals, different regions require different networks and different types of blockchains. Hyperledger satisfies the common attributes of multiple networks: identity verification of asset affiliation and trading parties, confidential transactions using disconnected identities and trans- actions, confidential encryption for contracts, value-added system portability, and interoperability between different services. Hyperledger incubates and develops a series of business blockchain technologies, including distributed ledger frameworks, smart contract engines, client libraries, graphical interfaces, utility libraries and sample applications: SAWTOOTH, IROHA, FABRIC, BURROW, INDY, CALIPER, CELLO, COMPOSER, EXPLORER, QUILT.

Hyperledger is mainly an enterprise application solution with customizable net- working rules that help different consensus protocols operate. For instance, (1) IBM provides a smart contract solution for the Bank of Tokyo-Mitsubishi UFJ (BTMU). This is one of the first projects of the Hyperledger Fabric (Androulaki et al., 2018). Under one Master Service Agreement (MSA), the hyperledger is used to manage a series of complex contracts that involve service level agreements (SLAs), payments, and penalties. The solution increases the efficiency of dispute resolution and, ideally, prevents disputes by providing clear evidence of synchronization among all parties in the network (IBM News Room, 2016). (2) Walmart.3 Walmart’s food origin tracking system provides a single view of the purchase order lifecycle

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throughout the supply chain, and identifies the source of the damaged food. It will reduce recalls and make regulation easier to implement (Higgins, 2017). By integrating hyperledger, smart contract, and cross-chain technology, the blockchain establishes a consensus and a co-governance mechanism. This mechanism employs computer pro- gramming to solidify the data stream, consisting of time, space, and instant multi- dimensional stacks, and to form recordable, traceable, definable, priced, and tradable technical constraints.

Blockchain technology is not limited to cryptocurrency and capital markets. It also conducts in-depth practice on smart contracts, network security and privacy, and other applications and platforms.

Blockchain and smart contract

The concept of a smart contract was first proposed by scholar Nick Szabo in 1994. Due to the lag in computing methods and the lessened development of application scenarios, smart contract has not received much public attention. The boom in Bitcoin and the development of the blockchain have redefined smart contracts. Smart contract uses computer language instead of legal provisions to record trans- action (Christidis & Devetsikiotis, 2016). It can be seen as a program that can be auto- matically run on the blockchain. Smart contract consists of programming languages, compilers, virtual machines, events, state machines, fault-tolerance mechanisms, etc. The smart contract is one of the core components of the blockchain and the computer program running on the duplicable shared ledger. Smart contract supports the active or passive processing of data, the acceptance, storage, and delivery of an asset, as well as the control and management of smart assets on blockchains (Luu, Chu, Olickel, Saxena, & Hobor, 2016).

Smart contract is responsive procedural rules and logic. It is distributed and trusted shared code that is deployed on the blockchain. Smart contract makes trade possible between untrusted or unknown parties. Smart contracts also have the general characteristics of the blockchain, such as distributed accounting, storage, and verification. They are undeniable and unforgeable. Smart contract is deployed in the blockchains and represents entities that do not rely on central organizations to execute contracts. The programmability of smart contracts allows the addition of arbitrarily complex terms (Delmolino, Arnett, Kosba, Miller, & Shi, 2016).

Smart contracts are used to form logical information chains and to bridge the lower information logic chains and the upper services (Christidis & Devetsikiotis, 2016). Smart contracts are self-guaranteed agreements between trading parties. Party A submits a transaction request to party B, and Party B provides information. If the two parties can make an agreement, this is the deal; otherwise, there is no response. A smart contract is a blocking program code that runs while waiting for the required data or action. The currently popular smart contract platforms are Ether- eum and Hyperledger fabric.

Smart contract is blockchain activator that provides flexible programmable mech- anisms and algorithms for static underlying blockchain data (Luu et al., 2016). Smart contract will provide support for building programmable financial systems and social systems in the Blockchain 2.0 and 3.0. The automation and programmable features of smart contract make it possible to encapsulate the complex behavior of each node in a distributed blockchain system into a software agent robot formed by blockchains in

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the virtual world. This helps to build blockchain technology in distributed applications of artificial intelligence systems: Decentralized Application (Dapp), Decentralized Organization (DO), Decentralized Autonomous Organization (DAO) (Wright & De Filippi, 2015), Decentralized Autonomous Corporation (DAC), Decentralized Auton- omous Society (DAS), etc.

Smart contract is the key of blockchain 2.0. The extant studies illustrate many potential models and applications to adopt or modify the principles and functions of smart contract to improve the existing blockchain systems from different angles. Hawk is a decentralized blockchain system that embraces private intuitive smart con- tracts (Kosba, Miller, Shi, Wen, & Papamanthou, 2016). The goal is to make the trans- action more private and secure. Yuan, Xia, Chen, Zang, and Xie (2018) constructed another private smart contract system named ShadowEth. In addition, smart con- tracts can be employed in broad fields, such as in car insurance (Lamberti et al., 2018), digital certificates (Cheng, Lee, Chi, & Chen, 2018), logistics management (Álvarez-Díaz, Herrera-Joancomartí, & Caballero-Gil, 2017), governance, etc.

Blockchain and security

Blockchain can solve the problem of centralization and can prevent individual entities from controlling the system. The nodes of blockchain are independent of each other. In order to ensure the safe operation of the system, when certain events occur, all of the nodes need to reach an agreement (Puthal, Malik, Mohanty, Kougianos, & Yang, 2018). However, it is impossible that the blockchain would not encounter security issues (Karame, 2016). For instance, Mt. Gox, a Japanese bitcoin exchange, was attacked twice, in June 2011 and in February 2014, and was shut down thereafter (Norry, 2018). Such attacks are not directly related to the blockchain technology, but are still partial blockchain-related attacks.

The security of the network depends on each single node. Each node records com- prehensive data information. When a node receives data from another node, that node will verify the identity of the other node. If the verification is successful, the node will spread the information to the entire network. Meanwhile, because of decentralization, the data transmission between nodes is open without trust. This feature can increase the transparency and efficiency of the transaction (Bonneau et al., 2015). Blockchain implements time stamps to verify and record transactions, adding time dimension and traceability to the data. Blockchain uses asymmetric cryptography to encrypt and sign data by public and private keys associated with the smart contract. This ensures high data security and privacy (Atzei, Bartoletti, & Cimoli, 2017).

The blockchain-based network covers massive data, but most of these data appear to be fragmented. Traditional data storage and control management often rely on trusted central supervision. Security attacks, or centrally controlled flaws, can lead to private data leaks or even to network crash (Zyskind & Nathan, 2015). Blockchain can effectively prevent and enhance potential security. The blockchain is used to estab- lish a decentralized architecture in which all nodes participate in operations to manage data and to avoid network security incidents caused by central control failures. The blockchain does not depend on central intervention to store or to update information. Instead, each user has a “Ledger” and keeps recording and updating verified infor- mation. Hence, the blockchain provides a higher-level security platform that is irrevoc- able, traceable, reliable, and usable (Karafiloski & Mishev, 2017). However, the

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blockchain gives rise to many problems, such as data management and privacy protec- tion, IoT device permissions and communications (which is discussed in the IoT of Blockchain Applications), and DDoS (distributed denial of service) attacks. Many studies have been conducted to resolve these issues.

Data management and privacy protection

The blockchain-based data management system uses a decentralized architecture and separates data and data access permissions. Blockchain-based systems eliminate the security risks that exist in central supervision. All of the processes are recorded to ensure data security and privacy (Aitzhan & Svetinovic, 2016).

Integration of blockchain technology with out-of-chain databases is an effective approach to implement a decentralized personal data management system and to sep- arate data and data permissions (Azaria, Ekblaw, Vieira, & Lippman, 2016). The blockchain consists of fundamental technical components: Cryptographic Hash Func- tion, Merkel Tree, and Blockchain. Hash Functions are mathematical equations that construct a complex string of characters for the inputs (Shi, 2016). For example, a vehicle’s basic information (brand, color, and price) can be mathematically trans- mitted into a series of unique hashing codes. The hash function is an important part of the blockchain. Its common features are that the unique output matches the unique input, and the hash code is computationally infeasible. A single Merkle Tree (Merkle, 1980) includes all of the previous inputs and links all of the transactions into the blockchain. The Block Header is a unique ID that consists of the Merkle Tree, the Block Stamp, and the previous Block Header. Thus, the blockchain can track previous record history from the Block Header.

The procedure of creating a blockchain through a public-private-key asymmetric cryptography (Yli-Huumo et al., 2016) is shown in Figure 3. In order to access user

Figure 3. Blockchain-based data management system.

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data, an application needs to obtain the user’s authority. User and application data manipulation processes are recorded in the blockchain. The user offers the authoriz- ation, such as information storage and query. User data is encrypted and is stored in a distributed database outside the blockchain. Permissions can be set when the user intends to change an application authorization for specific data. Permissions and data are then recorded on the blockchain. When an application needs to access a piece of data, it sends a request and it records the request to the blockchain. The system checks the signature and the record to confirm that the application has access to the corresponding data. If the authority is confirmed, the action is recorded in the blockchain. If that is not the case, the proposed block is discarded. Since the blockchain has a complete record, users are free to change the data’s permissions. The data manipulation process is transparent and auditable. Users can track data and find out which data is used by which applications in which way (Christidis & Devetsikiotis, 2016; Karafiloski & Mishev, 2017).

Blockchain-based application data management system on mobile platforms

Conventional data management is usually under the surveillance of a centralized entity. Blockchain-based data management breaks the centralization and distributes data and permissions. All permissions and records are stored in separate blockchain ledgers. Data manipulation is transparent to users who have full data access (Zyskind & Nathan, 2015). Suankaewmanee et al. (2018) introduced the MobiChain application that executes mining processes through mobile devices. The experimental results indicated thatMobiChain is an efficient mobile platform security solution. Gao et al. (2018) proposed BlockID, a novel framework for identity management that pro- cesses authentication, verification, and trust by mobile devices.

Blockchain-based keyless signature infrastructure

A digital signature is technique used to verify the integrity and the origin of a file or of data. It ensures that the file or the data is not modified. Each slot constructs a hash tree, root hash values are recorded in the blockchain, and multiple file signatures are made. Public key infrastructure (PKI) is one popular technique (Buldas, Laanoja, & Truu, 2017). In PKI systems, users use public-private keys to sign and verify files. PKI requires a trusted CA (certificate authority) for key management. Keyless Signature Infrastructure (KSI) is a blockchain-based keyless signature verifi- cation system (Buldas, Laanoja, & Truu, 2014). KSI is a multi-signature system (Aitzhan & Svetinovic, 2016) that allows multiple documents to be signed at a time. The blockchain-based KSI architecture is used for file signing without trusted CAs for key management, making it difficult for attackers to change files and signatures. Hence, KSI can guarantee the integrity and security of files or of data.

DDoS (Distributed denial of service) attack

The DDoS attacker initiates many requests to the central node of the target system, causing the target node or the network to crash (Ali, Nelson, Shea, & Freedman, 2016). A blockchain-based system can store data on multiple distributed devices. When some of its nodes are attacked, the remaining nodes can still fully maintain

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system operations (B. Wang, Zheng, Lou, & Hou, 2015). Thus, the distributed block- chain system creates a powerful database that is resilient to DDoS attacks.

Blockchain-based distributed domain name resolution system

The distributed storage divides the domain name resolution logic and the underlying blockchain consensus mechanisms into different layers. Distributed storage domain names and IP address mapping pair effectively to fight against DDoS attacks (Vasek, Thornton, & Moore, 2014). The applications are Blockstack and Nebulis.

Major blockchain applications

People are now focusing on the blockchain technology behind speculative cryptocur- rency in order to achieve wider commercialization and industrialization of practical applications (Lu & Zheng, 2018; Mougayar, 2016) such as IoT and Industry 4.0 (Huckle, Bhattacharya, White, & Beloff, 2016; Xu, Xu, & Li, 2018). Lately, IDC is expecting the blockchain to become one of the most hyped topics, attracting more and more attention (Parker et al., 2016). IDC also lists the top ten industries that may put the technology into practice: security, cloud, digital transformation, IoT, Fintech, cloud, healthcare, manufacturing, retail, energy, etc. In our study, we will illustrate major blockchain applications, such as IoT, Fintech, cloud, healthcare, and the smart city system.

IoT

The decentralized blockchains and autonomously operating smart contracts are potential fundamental components of IoT solutions (Xu, He, & Li, 2014). IoT needs to connect hundreds of millions of devices to form peer-to-peer data delivering and sharing. The blockchain can provide a consensus mechanism to ensure the privacy and security of the data in IoT (Bahga & Madisetti, 2016). There are five notable fea- tures of IoT-based blockchain: decentralization, trustlessness, on-time data, data encryption, and smart contracts (Conoscenti et al., 2016). Blockchain nodes build a decentralized IoT network.

A decentralized IoT device management system can be built to set device per- missions and communication control. Device permission settings and device control instructions are recorded in the blockchain, and the device is authenticated by the key. The system can protect the rights and thesecurity of IoT devices, as well as data privacy, to improve system security (Boudguiga et al., 2017). The BaaS manage- ment system will guarantee device permissions, data integrity, and invariability in a decentralized, peer-to-peer platform, BPIIoT, operating on-demand cloud-based manufacturing, smart diagnostics and machine maintenance, traceability, product cer- tification, customer-to-machine and machine-to-machine transactions, and registry of assets and inventory, etc. (Bahga & Madisetti, 2016). Heterogeneous devices and actuators are integrated in IoT systems. Huh, Cho, and Kim (2017) applied Ethereum and a smart contract platform to communicate, synchronize, configure, and manage IoT devices. The feasible system not only saves energy and costs, but protects against denial of service attacks.

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Fintech

The blockchain will dramatically influence financial activities and will change the way financing operates (Fanning & Centers, 2016). Aiming to reduce payment costs and to improve transparency and freedom (Nguyen, 2016), many institutions, banks, and companies have joined blockchain projects (Assarzadeh & Aberoumand, 2018; Guo & Liang, 2016). Blockchain permits a decentralized network of ledgers to agree on the true state of shared data, such as a global payment system, exchanges of currency, intellectual property, equity, information, and other types of contracts and digital assets (Tapscott & Tapscott, 2016). Hence, the blockchain is a general purpose tech- nology that can be used to trade scarce, digital property rights and to create novel types of encrypted platforms (Beck, Czepluch, Lollike, & Malone, 2016; Fanning & Centers, 2016; Mendling et al., 2018; Peters & Panayi, 2016).

Cryptocurrency

Due to the inherent attractiveness of the blockchain, the world of cryptocurrencies is in full bloom. Companies or organizations adopt different characteristics of blockchain, associatedwith their specific field, to build diverse cryptocurrency platforms. Cryptocur- rency (i.e. Bitcoin, Ethereum) is digitally decentralized, partially anonymous currency, not backed by any government or other legal entity (i.e. FED, central bank) that cannot be redeemed for gold or any other commodity (Dwyer, 2015). Cryptocurrency, as a currency or investment at the current stage, represents investors’ (especially in East- Pacific Asia) un-hedged speculative motive. The blockchain is peer-to-peer networking and relies on cryptography to maintain its integrity. Hence, it allows organizations or governments to receive donations and perform business anonymously (Lu, 2017). Until recently, many technology firms have developed blockchain-coin-related projects in diversified industries, but whether or not these firms can survive is ambiguous, because most of them expect to obtain external investments and profits in a short period of time, but they lack technical and financial support.

Other programs

IBM is a leading blockchain company that developed a global financing platform (IGF) to apply blockchain technologies for Fintech. With the implementation of blockchain, financial activities will become more comprehensive and distributed, with faster settlement and fewer disputes. Collaborating with China UnionPay,4

IBM designed a system to enable the seamless exchange of point-to-point loyalty reward points among multiple institutions, such as banks, credit card users, and gift shops. In the blockchain, consumers can exchange reward points with others. Outside the blockchain system, customers can go to any merchant equipped with a smart POS machine to use the reward points to redeem products. This idea can also be applied to flight mileage, mobile phone bills, or fuel cards. Huckle et al. (2016) discuss potential applications of blockchain technology in the shared economy of Dapps, such as ExpressIT and AutoPay.

Compared with traditional crowdfunding, blockchain-based internet equity crowdfunding has the advantages of low entry barrier and cost, shareholder verifica- tion and registration, a simplified transaction processes, and transparent and accurate information. In addition, a blockchain-based voting system in China can consistently

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help corporate governance combat money laundering and can protect small investors (Zhu & Zhou, 2016). Blockchain smart contracts automatically determine the legiti- macy and the compliance of transactions. Sending investment orders through a block- chain-based system will replace traditional methods such as fax or telephone. Once a ledger is confirmed, it cannot be modified. Another study also discussed the appli- cation of the blockchain in digital identification, voting systems, and financial appli- cations (Pilkington, 2016).

Blockchain brings irresistible attributes to banks and financial markets. It shows great future potential, especially when central banks jointly adopt it, which could help to cheaply verify trading attributes. For instance, the blockchain serves as a unified ledger for sharing business data between asset management, custody services, and auditing. Tsai, Blower, Zhu, and Yu (2016) presented a systematic review of the blockchain in financing. The study analyzed the key system requirements of the block- chain platform for a financial system. A comparison between the blockchain and financial blockchains was also described. Distributed General Ledger Technology (DLT) and smart contracts are attractive to the financial industry (Eyal, 2017). DLT future potential as a widely accepted currency depends, to a large extent, on whether the central banks can findways to control its supply and to address regulatory compliance and capital management security issues (Singh & Singh, 2016).

Cloud

Cloud computing is a comprehensive calculation method that combines parallel com- puting, distributed computing, and grid computing (Wang, Bi, & Xu, 2014; J. Wang, Chen, Huang, You, & Xiang, 2015). Large-scale storage and computing resources are effectively integrated and implemented in the IoT network (Hardjono & Smith, 2016). Blockchain technology may be the embryonic form of the next generation of cloud computing. In academia, some scholars have proposed constructive suggestions. Our study highlights two aspects: security in the cloud and blockchain-based infrastructures.

Aiming to solve the issues of security and privacy, a decentralized smart grid energy trading system was proposed by Aitzhan and Svetinovic (2016). The system is implemented on the blockchain, multi-signatures, and encrypted messaging streams, ensuring anonymous price negotiation and transactions. Yang, Chen, and Xiang (2018) focused on improving the quality of cloud data deletion. The previous “one-bit-return” protocol (Cachin, Haralambiev, Hsiao, & Sorniotti, 2013) removes data without the owner verification. Some data has been dishonestly deleted for econ- omic incentives. Using a blockchain-based public data deletion scheme, the owner is able to verify the data before deleting it, and the shared complete ledger makes the process more transparent to owners, without intervention. The hybrid cloud comput- ing EVCE (Electric Vehicles Cloud and Edge Computing) is closely related to both information and energy. The security issue could be solved by the use of cryptographic data coins and energy coins (Liu, Zhang, & Yang, 2018).

Integrating cloud-based QoS (Quality of Service) agreement, fog nodes, and SDN (software-defined network), a decentralized blockchain architecture can access on- demand IoT systems at a lower cost and with higher security (Sharma, Chen, & Park, 2018). More and more companies are using cloud services as their data services. Xu, Wang, and Guo (2017) proposed a powerful decentralized resource management

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framework to help data centers reduce energy consumption and other costs. With the development of IoT and cloud computing, 5G will become the next generation of mobile technology (Li, Xu, & Zhao, 2018). A blockchain-based trusted cloud radio over an optical fiber network architecture (BlockONet) was first built and then tested, to be energy saving. The system can aggregate available terminal devices and services and can transmit computing resources through an optical system (Yang, Wu, et al., 2018).

Healthcare

Healthcare has been a hot topic for a decade; new technologies are continuously being adopted in order to improve the healthcare system as secure, reliable, efficient, and flexible (Liu, Zhu, Mundie, & Krieger, 2017; Xu et al., 2014; Yue, Wang, Jin, Li, & Jiang, 2016). Blockchain technologies hold the promise of being able to unite the dis- parate processes in medical data management and sharing, Electronic Medical Records (EMRs), remote monitoring system, administrative overheads, strategic infrastructure design, biomedical applications, and patient experience and outcomes (Engelhardt, 2017; Esposito, De Santis, Tortora, Chang, & Choo, 2018; Guo, Shi, Zhao, & Zheng, 2018; Mettler, 2016; Rifi, Rachkidi, Agoulmine, & Taher, 2017).

A remote patient monitoring system embedded Ethereum and smart contract pro- vides a real-time IoT-based network (Dey, Jaiswal, Sunderkrishnan, & Katre, 2017) that is communicating among patients, smart sensors, and other related medical instruments, and that secures the medical data (Firdaus et al., 2018; Griggs et al., 2018). A blockchain-based cloud mobile platform was deployed to obtain information from personal wearable devices and to share data between providers and insurance companies (Liang et al., 2017). Kuo, Kim, and Ohno-Machado (2017) reviewed litera- ture about the blockchain and prospected potential blockchain-based biomedical and health care applications.

MedRec is a decentralized EMR management system in which data permission and operation are recorded in the blockchain, and execution is completed by smart contracts. MedRec collaborates suppliers’ complete medical information, for data authentication, confidentiality, auditing, and sharing, and gives patients a comprehen- sive, immutable medical data and service (Azaria et al., 2016).

Smart city system

With the development of IoT and Industry 4.0 (Viriyasitavat, Xu, Bi, & Sapsomboon, 2018a), researchers are increasingly focusing on implementing blockchains in Smart City, which includes humans, technology, and the organization in a sharing economy (Sun, Yan, & Zhang, 2016). A hybrid architecture integrates SDN (Software Defined Networking) and blockchain technologies to construct an efficient, secure, and scalable network that performs centralized and distributed phenomenon (Sharma, Rathore, & Park, 2018). In addition, Sharma and Park (2018) discussed a Li-Fi (the light-fidelity) network for a scalable smart city system.

Smart cities, based on the blockchain, require more intelligence and automation to provide better living services but, in practice, security is still challenging. It is necessary to collaborate and to integrate people, smart devices, and IoT within a secure frame- work (Biswas & Muthukkumarasamy, 2016). Dorri, Kanhere, and Jurdak (2017)

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created a system that consists of cloud storage, the blockchain, and smart home to handle security and privacy. Another study surveyed the crucial security measure, Digital Identity (Rivera, Robledo, Larios, & Avalos, 2017).

Moreover, the application of blockchain is very extensive. For instance, the block- chain has the potential to contribute the development of e-government and public ser- vices (Alketbi, Nasir, & Talib, 2018; Atzori, 2015; Böhme, Christin, Edelman, & Moore, 2015; Diallo et al., 2018; Hou, 2017; Ølnes, 2016; Ølnes, Ubacht, & Janssen, 2017), as well as voting systems (Hanifatunnisa & Rahardjo, 2017). The blockchain can improve the level of transparency and fairness for Lottery Systems (Liao & Wang, 2017). Another area is public service; Savelyev (2018) outlined various legal-related aspects and existing challenges of blockchain technologies in the copyright digital environment. Also, Intelligent Transportation System (ITS) can grow to be more trusted and autonomous if blockchain technologies are properly adopted (Lei et al., 2017; Yuan & Wang, 2016). Slice Leasing Ledger can save service time and can improve equipment automation (Backman, Yrjölä, Valtanen, & Mämmelä, 2017). A blockchain-based smart contract infrastructure optimally allo- cates available electric vehicle charging stations to clients (Pustisek, Kos, & Sedlar, 2016). Based on RFID and the blockchain, Tian (2016) introduced an Agri-food Tra- ceability System to ensure food safety by managing real-time data in the supply chain network.

Research challenges and future trends

The uniqueness of blockchain technology is its decentralization, which can be achieved through the use of data encryption, time stamping, distributed consensus, and economic incentives. Decentralized credit-based peer-to-peer transactions, coordination, and collaboration are realized in distributed systems where the nodes do not need to trust each other, thus providing a solution to high costs, inefficiency, and insecure data storage of centralization. The blockchain has far-reaching impli- cations for practice and research. At the same time, the emergence of the blockchain has encountered many problems and challenges.

Security & IoT

As an emerging technology, IoT has revolutionized the global network, which com- prises people, smart devices, intelligent objects, information, and data. The develop- ment of IoT is still in its infancy, and many directly related issues need to be solved. Learning how to protect IoT is a challenging task. System security is the foundation for the development of IoT. Banerjee, Lee, and Choo (2017) proposed nine research issues toward blockchain-based IoT security. The security of blockchain-based IoT is a complicated problem associated with the internet, functions, structures, platforms, and mechanisms.

Costs & capability constraints

Unlike the traditional system, blockchain-based transactions implement in each single node and ledger. With the implementation of the blockchain, shared ledgers will become more secure and more scalable for data storage (Kshetri, 2017). However,

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there are many problems that need to be dealt with, such as the ledger storage facility, limited development in technology, the lack of a skilled workforce, the lack of proper legal codes and standards, variations in processing speeds and time, computing capa- bilities, and scalability issues (Banafa, 2017).

Regulation and governance

Since 2016, the ISO (International Organization for Standardization) has organized and developed ten projects on the blockchain and the distributed ledger (ISO/TC 307, 2016). This exploration is just the beginning of seeking proper coordination between the blockchain and the rules. Learning how to improve the legal behavior of blockchains and related technologies is a challenge for both the industrial auth- orities and the government.

The actual blockchain-related applications and activities are lack of regulation. We need professional and consistent laws and regulations to ensure a continuous and strong development of blockchain ecology. As a blockchain agreement, a government or another authority could employ smart contract embedding law and statutes into source code, to regulate block-related things (Banafa, 2017; Wright & De Filippi, 2015). Under the guidance of an effective blockchain-based regulation, blockchain ecology and society will continue to develop, both safely and cyclically.

Communication & consensus protocols

Since the primary communication protocol in the blockchain is P2P, a faster settle- ment protocol can be built, in which multiple entities can complete transactions sim- ultaneously. Consensus agreements may take over responsibility for the mining process. In other words, the blockchain will be developed to embed more reliable and faster protocols (Viriyasitavat, Xu, & Bi, 2018; Viriyasitavat, Xu, Bi, & Sapsom- boon, 2018b).

Conclusions

Technological innovation is the core driving force for social and economic develop- ment (Chaudhry, Xu, & Cao, 2018; Li, 2017). With the advent of the era of infor- mation technology, represented by big data, cloud computing, and IoT, the emerging blockchain technology and knowledge automation are expected to lead intelligent technology in the future. The technical characteristics and development prospects of blockchains have been widely recognized for their far-reaching impact on the real world. As a joint program of information science, management science, and social science, the blockchain inevitably encounters problems that practitioners and researchers try to solve: How to make full use of the new features of the block- chain to explore real-world scenarios, and how to achieve progress and innovation through blockchain-based data structures, cryptography, communication networks, consensus mechanisms, economic incentives, and programmable contracts.

Since the prosperity of Bitcoin, the blockchain has rapidly advanced to its second phase; it will revolutionize the IoT-related ecosystem and will benefit other technologies and fields. This paper reviewed the state-of-the-art of blockchain and related issues, in practice. We described the background and the current status.

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Then we introduced the basic technologies, functions, and features. Next, we illus- trated key blockchain-based components and industrial applications. The block- chain’s enormous potential and implementation challenges were addressed as well. The survey could guide others to understand and prospect the blockchain in the near future.

Disclosure statement No potential conflict of interest was reported by the author.

Notes 1. https://www.ethereum.org/. 2. https://www.hyperledger.org/projects. 3. Walmart. “Food Security Supply Chain Tracking”. Website access: http://fortune.com/2017/

08/22/walmart-blockchain-ibm-food-nestle-unilever-tyson-dole/. 4. https://www-03.ibm.com/press/us/en/pressrelease/50613.wss.

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