Blockchain Technology: A Brief Overview PDF

ISSN (Online) 2581-9429 IJARSCT International Journal of Advanced Research in Science, Communication and Technology (IJARSCT) Volume 4, Issue 2, April...

ISSN (Online) 2581-9429 IJARSCT International Journal of Advanced Research in Science, Communication and Technology (IJARSCT) Volume 4, Issue 2, April 2021 Impact Factor: 4.819 Blockchain Technology: A Brief Overview H. R. Vyawahare Assistant Professor, Department of Computer Science & Engineering Sipna College of Engineering & Technology, Amravati, India Abstract: Blockchain technology and distributed ledger has attracted massive attention and has triggered multiple projects in different industries. Blockchain is one of the most important technical invention in the recent years. It serves as an immutable ledger which allows transactions to take place in a decentralized manner. Blockchain based applications are springing up and are covering numerous fields including financial services, reputation system and Internet of Things (IoT), and so on. However, there are still many challenges of blockchain technology such as scalability and security problems waiting to be overcome. This paper presents a comprehensive overview on blockchain technology. Keywords: Blockchain, Distributed ledger, Internet of Things and Scalability I. INTRODUCTION Nowadays cryptocurrency has become a buzzword in both industry and academia. As one of the most successful cryptocurrency, Bitcoin has enjoyed a huge success with its capital market reaching 10 billion dollars in 2016. The core technology to build Bitcoin is blockchain. Blockchain is a database of record of transactions which is distributed, and is validated and maintained by a network of computers around the world. Here instead of a single central authority such as a bank, the records are managed by a large community and no individual person has control over it and no one can go back and change or erase a transaction history. Blockchain can be regarded as a public ledger and all committed transactions are stored in a list of blocks. This chain grows as new blocks are appended to it continuously. The ledger prevents the double spending problem by a helping network to examine the transaction history of an electronic coin that a user submits for payment, and can confirm that the coin has not already been spent. The network required for Blockchain is a peer-to-peer network in which every user of the network has the information of all the transactions made in that specific network. Asymmetric cryptography and distributed consensus algorithms have been implemented for user security and ledger consistency. The key characteristics of blockchain technology is decentralization. Thus when, compared to a conventional centralized database, the information cannot be manipulated due to blockchain’s built in distributed nature of structure and confirmed guarantees by the peers. Since it allows payment to be finished without any bank or any intermediary, blockchain can be used in various financial services such as digital assets, remittance and online payment. Additionally, it can also be applied into other fields including smart contracts, public services, Internet of Things (IoT), reputation systems and security services. Blockchain can be efficiently used in such services due to its many feat ures. The important feature is that its transactions are permanent and they cannot be interfered. Thus businesses requiring high degree of reliability can use it. Also the distributed nature of blockchain avoid the single point of failure situation. Although the blockchain technology has great potential for the construction of the future Internet systems, it is facing a number of technical challenges. Scalability and Bitcoin block size are important challenges. II. BACKGROUND The first implementation of modern day blockchain technology came from Satoshi Nakamoto. In 2008, a person or group of people identified as Nakamoto published a paper, “Bitcoin: A Peer-to- Peer Electronic Cash System,” which hypothesized a direct online payment from one party to another without the use of an intermediary third party. The paper described “an electronic payment system based on cryptographic proof instead of trust.” This paper provided a solution to the double spending where a digital currency cannot be duplicated, and no one can spend it more than once. Copyright to IJARSCT DOI: 10.48175/IJARSCT-950 755 www.ijarsct.co.in  ISSN (Online) 2581-9429 IJARSCT International Journal of Advanced Research in Science, Communication and Technology (IJARSCT) Volume 4, Issue 2, April 2021 Impact Factor: 4.819 The paper stated the concept of public ledger where an electronic coin transaction history can be traced and confirmed if the coin has not been spent before and to prevent double spending issue. III. BLOCKCHAIN ARCHITECTURE Blockchain is digital record of all the transactions that take place in a computer network. It works on the concept of decentralized database where these databases exist in multiple computers and every copy of these database are identical. The name comes from two words, one is block which means that there are blocks of individual data which has all the information about the transaction and the second is a chain which means that all this data is arranged in a single list which is here referred as a chain. Thus Blockchain is considered as a block of digital information stored in a chain of Public database. A Block basically contains the information about all the transactions with each transaction having a unique reference number, a time stamp, a pointer to the immediately previous transaction, as well as information on the transactions themselves. It also contains information about which parties are taking part in this transaction and also the unique information of that specific buyer and seller. Thus each node has access to all previous blocks down to the first block of the chain called the “genesis” block. This time stamp gives each block an immutable temporal position in the chain. Figure 1: Example of Blockchain with chain of blocks Figure 2: Structure of Block The block body is composed of a transaction counter and transactions. The maximum number of transactions that a block can contain depends on the block size and the size of each transaction. Blockchain uses an asymmetric cryptography mechanism to validate the authentication of transactions. A block consists of the block header and the block body as shown in Figure 2. In particular, the block header includes: Copyright to IJARSCT DOI: 10.48175/IJARSCT-950 756 www.ijarsct.co.in  ISSN (Online) 2581-9429 IJARSCT International Journal of Advanced Research in Science, Communication and Technology (IJARSCT) Volume 4, Issue 2, April 2021 Impact Factor: 4.819  Block version: indicates which set of block validation rules to follow.  Merkle tree root hash: the hash value of all the transactions in the block.  Timestamp: current time as seconds in universal time since January 1, 1970.  nBits: target threshold of a valid block hash.  Nonce: a 4-byte field, which usually starts with 0 and increases for every hash calculation  Parent block hash: a 256-bit hash value that points to the previous block. IV. WORKING OF BLOCKCHAIN TECHNOLOGY Blockchain works with the help of cryptographic keys, peer-to-peer network containing a shared ledger and means of computing, to store the transactions and records of the network. In order to perform transactions, all one needs is to have its wallet. A Blockchain wallet is nothing but a program that allows one to spend cryptocurrencies like BTC, ETH, etc. Such wallets are secured by cryptographic methods (public and private keys) so that one can manage and have full control over his transactions. Each individual has these two keys, which are used by them to produce a secure digital identity reference. In the world of cryptocurrency, this identity is referred to as ‘digital signature’ and is used for authorizing and controlling transactions. Initially, when a user creates a transaction over a Blockchain network, a block will be created, representing that transaction is created. Once a block is created, the requested transaction is broadcasted over the peer-to-peer network, consisting of computers, known as nodes, which then validate the transaction. A verified transaction can involve cryptocurrency, contracts, records, or any other valuable information. Once a transaction is verified, it is combined with other blocks to create a new block of data for the ledger. With each new transaction, a secured block is created, which are secured and bound to each other using cryptographic principles. Whenever a new block is created, it is added to the existing Blockchain network confirming that it is secured and immutable. V. CHARACTERISTICS OF BLOCKCHAIN 5.1 Decentralization Conventionally, the approval of regulatory authorities like a government or bank is needed for transactions which results cost and the performance bottlenecks at the central servers; however, with Blockchain, transactions are done with the mutual consensus of users resulting in smoother, safer, and faster transactions. 5.2 Persistency Transactions can be validated quickly and invalid transactions would not be admitted by honest miners. It is nearly impossible to delete or rollback transactions once they are included in the blockchain. Blocks that contain invalid transactions could be discovered immediately. 5.3 Highly Secure It uses a digital signature feature to conduct fraud-free transactions making it impossible to corrupt or change the data of an individual by the other users without a specific digital signature. 5.4 Anonymity Each user can interact with the blockchain with a generated address, which does not reveal the real identity of the user. Blockchain cannot guarantee the perfect privacy preservation due to the intrinsic constraint Auditability. 5.5 Automation Capability It is programmable and can generate systematic actions, events, and payments automatically when the criteria of the trigger are met. 5.6 Immutability In Blockchain, there is no possibility of changing the data or altering the data. The data is present inside the Blockchain and is permanent; one cannot delete or undo it. Copyright to IJARSCT DOI: 10.48175/IJARSCT-950 757 www.ijarsct.co.in  ISSN (Online) 2581-9429 IJARSCT International Journal of Advanced Research in Science, Communication and Technology (IJARSCT) Volume 4, Issue 2, April 2021 Impact Factor: 4.819 5.7 Transparency Centralized systems are not transparent, whereas Blockchain (a decentralized system) offers complete transparency. 5.8 High Availability Unlike centralized systems, Blockchain is a decentralized system of P2P network which is highly available due to its decentralized nature. Since in the Blockchain network, everyone is on a P2P network, and everyone has a computer running, therefore, even if one peer goes down, the other peers still work. VI. TAXONOMY OF BLOCKCHAIN SYSTEMS Current Blockchain systems are categorized roughly into three types: public Blockchain, private Blockchain and consortium Blockchain. 6.1 Public Blockchain All records are visible to the public and everyone could take part in the consensus process. Differently, only a group of pre-selected nodes would participate in the consensus process of a consortium Blockchain. As for private Blockchain, only those nodes that come from one specific organization would be allowed to join the consensus process. 6.2 Private Blockchain Regarded as a centralized network since it is fully controlled by one organization. 6.3 Consortium Blockchain Constructed by several organizations is partially decentralized since only a small portion of nodes would be selected to determine the consensus. VII. CONCLUSION Blockchain is a revolutionary technology which has changed the way people interact with the Internet. In this cyber world, where nothing is private, and no data is safe, Blockchain has shown promising potentials of being the best bet of people dealing with the value-sensitive commodities. This paper discusses about the basics of blockchain techno logy which can be used as a reference for people new in this field. The aim of this paper is to provide a comprehensive readymade idea of the working of blockchain technology which can be used by students or whoever interested in getting familiar with this revolutionary technology. REFERENCES Zheng, Z., Xie, S., Dai, H., Chen, X., & Wang, H. (2017, June). An overview of blockchain technology: Architecture, consensus , and future trends. In Big Data (BigData Congress), 2017 IEEE International Congress on (pp. 557-564). IEEE. Sarmah, Simanta Shekhar. "Understanding blockchain technology." Computer Science and Engineering 8.2 (2018): 23-29. G. Foroglou and A.-L. Tsilidou, “Further applications of the blockchain,” 2015. NRI, “Survey on blockchain technologies and related services,” Tech. Rep., 2015. [Online]. Available: http://www.meti.go.jp/english/press/2016/pdf/0531 01f.pdf Buterin, Vitalik. "On public and private Blockchain s." Ethereum blog 7 (2015). Valentina Gatteschi, Fabrizio Lamberti, Claudio Demartini, Chiara Pranteda, Victor Santamaria, “To Blockchain or Not to Blockchain: That is the Question?” in IEEE Computer Society,1520-9202 ©March/April 2018. Arjun Kharpal ,“Blockchain Revolution: Everything you need to know about the Blockchain” ,CNBC, June 2018, in press. Copyright to IJARSCT DOI: 10.48175/IJARSCT-950 758 www.ijarsct.co.in