Blockchain: A Distributed ledger
- Anything that is capable of being owned or controlled to produce value, is an asset.
- Tangible Assets
- Asset that has a physical form.
- e.g. Machinery, Buildings and Land
- Intangible Assets
- Asset that is not physical in nature.
- Intangible assets are subdivide as
- Financial, e.g. bond
- Intellectual e.g. patents
- Digital e.g. music
- Ledger is a principal book (or computer file) for recording asset transfer between participants.
- Distributed ledger(shared ledger) is a ledger that is replicated, synchronized and spread across multiple sites, countries, and/or institutions.
What is Blockchain
- Blockchain is an append-only distributed ledger, where records are stored in blocks, and blocks form a chain.
- Every block contains transactions, that can be verified by any node in the network
- Consensus is procedure to have an accurate Blockchain at every node.
- Public ledger: Decentralized, anyone can read and send tranasctions, e.g. Bitcoin, Ethereum, Hyperledger
- Private ledger: Centralized under one organization which controls the right to view ans send transactions, e.g. Bankchain
Internet of Value
Consensus: A general agreement
Consensus achieved using Proof-of-Work.
- New transactions are broadcast to all nodes.
- Each node collects new transactions into a block.
- Each node works on finding a difficult proof-of-work for its block.
- When a node finds a proof-of-work, it broadcasts the block to all nodes.
- Nodes accept the block only if all transactions in it are valid and not already spent.
- Nodes express their acceptance of the block by working on creating the next block in the chain, using the hash of the accepted block as the previous hash.
- Nodes always consider the longest chain to be the correct one and will keep working on extending it.
Consensus defines types of Blockchain
- Permissionless Blockchain: Every node in the network participate in consensus procedure, e.g. Bitcoin Blockchain (Proof of Work)
- Permissioned Blockchain: Only Selected nodes(validators, e.g. Government or trusted nodes) participate in consensus procedure e.g. Hyperledger Blockchain
Privacy and Anonymity in Internet of Value
Public keys must not reveal real identities.
Transactions must not reveal real identities.
It is not possible to link different pseudonyms of a real identities.
- Anonymity = Pseudonymity and Unlinkability
- Privacy is provided by encrypting the application data.
Future applications of Blockchain
- Supply Chain Management
- Identity Management
SCM without Blockchain
SCM with Blockchain