Blockchain for Real World Applications

Blockchain for Real World Applications
Contents
Illustrations
Foreword
Preface
1 Introduction
2 Distributed Ledger Technology
	2.1 Different Types of Distributed Ledger Technology
		2.1.1 Blockchain
		2.1.2 Directed Acyclic Graph
		2.1.3 Hashgraph
		2.1.4 Holochain
		2.1.5 Tempo (Radix)
	2.2 Chronological Evolution
		2.2.1 Blockchain 1.0
		2.2.2 Blockchain 2.0
		2.2.3 Blockchain 3.0
		2.2.4 Blockchain 4.0
	2.3 Blockchain Architecture
		2.3.1 Block
		2.3.2 Hash Function
		2.3.3 Encryption
			2.3.3.1 Problems
		2.3.4 Keys: Public and Private
		2.3.5 Decentralized Identifier
3 Blockchain Ecosystem
	3.1 Working of Blockchain
	3.2 Key Characteristics
		3.2.1 Decentralization
		3.2.2 Persistence
		3.2.3 Anonymity
		3.2.4 Auditability
	3.3 Unspent Transaction Output
	3.4 Classification of Blockchain on Access Management
		3.4.1 Public Blockchain
		3.4.2 Private Blockchain
		3.4.3 Consortium Blockchain
	3.5 Consensus
		3.5.1 Proof-of-Work
		3.5.2 Proof-of-Stake
		3.5.3 Peercoin
		3.5.4 Practical Byzantine Fault Tolerance
		3.5.5 Delegated Proof-of-Stake
		3.5.6 Ripple
		3.5.7 Tendermint
		3.5.8 Consensus Algorithms: A Comparison
			3.5.8.1 Node Identity Management
			3.5.8.2 Energy Saving
			3.5.8.3 Tolerated Power of Adversary
		3.5.9 Advances in Consensus Algorithms
	3.6 Payment Verification in Blockchain
		3.6.1 Simple Payment Verification
			3.6.1.1 Key Features
		3.6.2 Full Payment Verification
			3.6.2.1 Key Features
	3.7 Hashgraph
		3.7.1 Elements of Hashgraph
		3.7.2 Diagrammatic Representation
		3.7.3 How Does Hashgraph Work?
	3.8 Scalability
4 Transactions in Bitcoin Blockchain
	4.1 Coinbase Transactions
		4.1.1 Structure
		4.1.2 Key Features of Coinbase Transactions
		4.1.3 Computation of Transaction Value
	4.2 Transactions Involving Fiat Currency
		4.2.1 Cryptocurrency Exchanges
		4.2.2 Bitcoin Debit Card
		4.2.3 Bitcoin ATMs
		4.2.4 Metal Pay
		4.2.5 Peer-to-Peer Exchanges
	4.3 Top Fiat Currencies for Bitcoin Transactions
		4.3.1 US Dollar
		4.3.2 Japanese Yen
		4.3.3 Euro
		4.3.4 Korean Won
		4.3.5 Chinese Yuan
		4.3.6 Indian National Rupee
	4.4 Price Determination for Bitcoin in Transactions
		4.4.1 Cost of Mining Bitcoin
		4.4.2 Market Supply and Demand
		4.4.3 Bitcoin Rewards
		4.4.4 Exchanges
		4.4.5 Competing Cryptocurrencies
		4.4.6 Regulatory Provisions
		4.4.7 Internal Governance
		4.4.8 Value of Bitcoin
		4.4.9 Can the Bitcoin Price Be Zero?
		4.4.10 Why Is Bitcoin’s Price Volatile?
	4.5 Controlling Transaction Costs in Bitcoin
		4.5.1 History of Bitcoin Cash
		4.5.2 Concerns about Bitcoin Cash
		4.5.3 Bitcoin Cash Core Features
		4.5.4 Utility of Bitcoin Cash
		4.5.5 Advancements over Bitcoin
			4.5.5.1 Maximum Block Size
			4.5.5.2 Cost Efficiency
			4.5.5.3 Smart Contract Support
			4.5.5.4 Issue of Token
			4.5.5.5 Nonfungible Tokens
			4.5.5.6 No Replacement-by-Fee
			4.5.5.7 Schnorr Signatures
			4.5.5.8 Difficulty Adjustment Algorithm
		4.5.6 Bitcoin Cash – Ease of Use
		4.5.7 Challenges to Bitcoin Cash
5 Ethereum and Hyperledger Fabric
	5.1 Early Attempts to Program Cryptocurrencies
	5.2 Smart Contracts
	5.3 Working of Ethereum
		5.3.1 Gas
		5.3.2 Ether
	5.4 Hyperledger
	5.5 Working of Hyperledger
		5.5.1 Components
		5.5.2 Workflow
			5.5.2.1 Proposal
			5.5.2.2 Endorsement
			5.5.2.3 Transmission to Ordering Service
			5.5.2.4 Updating the Ledger
		5.5.3 Industrial Applications of Hyperledger Fabric
			5.5.3.1 Production
			5.5.3.2 B2B Contract
			5.5.3.3 Supply Chain
			5.5.3.4 Asset Depository
			5.5.3.5 Trading and Asset Transfer
			5.5.3.6 Insurance
			5.5.3.7 Real Estate
		5.5.4 Benefits of Hyperledger Fabric
			5.5.4.1 Open Source
			5.5.4.2 Private and Confidential
			5.5.4.3 Access Control
			5.5.4.4 Chaincode Functionality
			5.5.4.5 Performance
			5.5.4.6 Modular Design
	5.6 Ethereum Versus Hyperledger
		5.6.1 Purpose
		5.6.2 Cryptocurrency
		5.6.3 Participation
		5.6.4 Privacy
		5.6.5 Governance
		5.6.6 Computer Code
		5.6.7 Smart Contracts
		5.6.8 Consensus Mechanism
		5.6.9 Rate of Transactions
		5.6.10 Use-cases
	5.7 Decentralized Applications
		5.7.1 Merits of Decentralized Applications
			5.7.1.1 Zero Downtime
			5.7.1.2 Privacy
			5.7.1.3 Resistance to Censorship
			5.7.1.4 Absolute Data Integrity
		5.7.2 Demerits of Decentralized Applications
			5.7.2.1 Maintenance
			5.7.2.2 Performance Overhead
			5.7.2.3 Network Congestion
			5.7.2.4 User Experience
			5.7.2.5 Centralization
	5.8 Tokens
6 Identity as a Panacea for the Real World
	6.1 Identity Systems
		6.1.1 Contemporary ID Systems
	6.2 Centralized Model
		6.2.1 A Case Study of World’s Largest Biometric ID System – Aadhaar
			6.2.1.1 Salient Features of Aadhaar
			6.2.1.2 Biometric and Demographic Standards
			6.2.1.3 Enrollment Set-up
			6.2.1.4 Entities and Their Roles
			6.2.1.5 Process of Authentication
			6.2.1.6 Budget and Outlay
			6.2.1.7 Enrollment Status and Saturation
	6.3 Cost and Benefits
		6.3.1 Merits
		6.3.2 Demerits
			6.3.2.1 Waste of Resources
			6.3.2.2 Lack of Neutrality
			6.3.2.3 Technical Glitches
			6.3.2.4 Security Procedures
			6.3.2.5 Unauthorized Access
			6.3.2.6 Absence of Data Protection Act
			6.3.2.7 Involvement of Private Players
			6.3.2.8 Freedom of Choice as an Illusion
			6.3.2.9 Implicit Coercion
	6.4 Quest for One World – One Identity
7 Decentralized Identities
	7.1 Identity Models
		7.1.1 Centralized Identity
		7.1.2 Federated Identity
		7.1.3 User-centric Identity
		7.1.4 Self-sovereign Identity
	7.2 Blockchain-based Solutions
	7.3 Identity Management
		7.3.1 Current Challenges
			7.3.1.1 Absence of Compatibility
			7.3.1.2 Identity Theft
			7.3.1.3 KYC Onboarding and Weak Authentication Protocols
			7.3.1.4 Lack of Control
	7.4 Identity Storage | Interplanetary File System
		7.4.1 How Does IPFS Access the Documents?
		7.4.2 Transactions Involved in Accessing Documents on IPFS
		7.4.3 IPFS Commands
	7.5 Biometric Solutions
		7.5.1 Fingerprint Verification
		7.5.2 Iris Scan
		7.5.3 Vascular Technology
		7.5.4 Palm Vein Pattern
		7.5.5 Facial Recognition
			7.5.1.1 Verification of Government ID
			7.5.1.2 Verification of a User
			7.5.1.3 Creation of a Digital ID
		7.5.2 System Overview
			7.5.2.1 Identify Creator
			7.5.2.2 Identity User
			7.5.2.3 Identity Manager
			7.5.2.4 Identity Device
		7.5.3 Blockchain Identity Protocol
			7.5.3.1 Creation of Digital ID
			7.5.3.2 Use of Digital ID
			7.5.3.3 Digital ID Management
		7.5.4 Security Audit
			7.5.4.1 Binding
			7.5.4.2 Privacy
		7.5.5 Authentication Protocol
	7.6 Identity Access
		7.6.1 Identity Encryption
		7.6.2 Zero Knowledge Proof
		7.6.3 Revocation
	7.7 Merits of a Proposed System
		7.7.1 Seamless Navigation
		7.7.2 Accessibility
		7.7.3 Easy and Secure
		7.7.4 Decentralized Public Key Infrastructure
		7.7.5 Decentralized Storage
		7.7.6 Manageability and Control
		7.7.7 Data Portability
		7.7.8 Prevention of Identity Theft
	7.8 Disadvantages of the Proposed System
		7.8.1 Privacy Leakage
		7.8.2 Selfish Mining
		7.8.3 Admin Conflicts
	7.9 Challenges
		7.9.1 Storage Optimization and Redesign
		7.9.2 Privacy Protection
		7.9.3 Random Beacons and Timestamps
	7.10 Solutions with Hyperledger Fabric
		7.10.1 Warning Pointers
		7.10.2 Safety Protocols
8 Encryption and Cybersecurity
	8.1 Cryptography
		8.1.1 Different Types of Cryptography
			8.1.1.1 Symmetric Key Cryptography
			8.1.1.2 Asymmetric Key Cryptography
			8.1.1.3 Hash Functions
		8.1.2 Cryptographic Schemes
			8.1.2.1 Simple Substitution Cipher
			8.1.2.2 Caesar Cipher
			8.1.2.3 Vigenère Cipher
			8.1.2.4 Transposition Cipher
	8.2 Playfair Cipher
		8.2.1 Encryption Algorithm
			8.2.1.1 Step 1 – Generate Squares (5 * 5)
			8.2.1.2 Step 2 – Algorithm to Encrypt Plaintext
		8.2.2 Decryption Algorithm
			8.2.2.1 Step 1 – Generate Squares (5 * 5)
			8.2.2.2 Step 2 – Algorithm to Decrypt the Ciphertext
		8.2.3 Advantages and Disadvantages
			8.2.3.1 Advantages
			8.2.3.2 Disadvantages
	8.3 Hill Cipher
		8.3.1 Substitution Scheme
			8.3.1.1 Encryption
			8.3.1.2 Decryption
	8.4 RSA Algorithm in Cryptography
		8.4.1 Working Mechanism
			8.4.1.1 Generating the Public Key
			8.4.1.2 Generating a Private Key
	8.5 Multiple Precision Arithmetic Library
		8.5.1 GNU Multiple Precision Arithmetic Library
		8.5.2 RSA Algorithm Implementation Using GMP Library
		8.5.3 Weak RSA Decryption with Chinese Remainder Theorem
	8.6 SHA-512 Hash in Java
	8.7 Cybersecurity
		8.7.1 Common Cyberattacks
			8.7.1.1 Denial-of-Service Attacks
			8.7.1.2 Malware
			8.7.1.3 Man-in-the-Middle Attack
			8.7.1.4 Phishing
			8.7.1.5 Structured Language Query Injection
			8.7.1.6 Latest Cyberthreats
		8.7.2 Key Cybersecurity Features
		8.7.3 Blockchain for Cybersecurity
		8.7.4 Pros and Cons of Blockchain in Cybersecurity
			8.7.4.1 Pros
			8.7.4.2 Cons
		8.7.5 Real-world Examples
			8.7.5.1 Australian Government
			8.7.5.2 Barclays
			8.7.5.3 Chinese Military
			8.7.5.4 Cisco
			8.7.5.5 Coinbase
			8.7.5.6 Colorado State
			8.7.5.7 Founders Bank
			8.7.5.8 Health Linkage
			8.7.5.9 JP Morgan
			8.7.5.10 Mobile Coin
			8.7.5.11 Philips Healthcare
			8.7.5.12 Santander Bank
			8.7.5.13 Wall Street
9 Data Management
	9.1 Data Science
		9.1.1 Challenges for Data Scientists
		9.1.2 Blockchain-based Solutions
	9.2 Education and Employment Verification
		9.2.1 Existing Verification Process
		9.2.2 Blockchain as an Option
			9.2.2.1 Enrollment Process
			9.2.2.2 Validation Process
			9.2.2.3 Double Layer Encryption
		9.2.3 Learner’s Console
		9.2.4 Assessment Portal
		9.2.5 Background Verification
			9.2.5.1 Maintenance of Track Record
			9.2.5.2 CV Validation
			9.2.5.3 Opportunities for Job Aspirants
		9.2.6 Bureaucratic Disintermediation
		9.2.7 Advantages of Blockchain-based Verification
	9.3 Health Care
		9.3.1 Potential Uses in Health Care
			9.3.1.1 Digital Health Records
			9.3.1.2 Drug Supply Chain
			9.3.1.3 Health Insurance
			9.3.1.4 Remote Health Monitoring
			9.3.1.5 Organ Transplantation
			9.3.1.6 Credential Verification
		9.3.2 Real-world Use-Cases
			9.3.2.1 Akiri | Foster City
			9.3.2.2 Avaneer Health
			9.3.2.3 Block Pharma
			9.3.2.4 BurstIQ
			9.3.2.5 Centers for Disease Control and Prevention
			9.3.2.6 Chronicled
			9.3.2.7 Coral Health
			9.3.2.8 Embleema
			9.3.2.9 Factom
			9.3.2.10 Guardtime
			9.3.2.11 MedicalChain
			9.3.2.12 Patientory
			9.3.2.13 Professional Credentials Exchange
			9.3.2.14 RoboMed
			9.3.2.15 Tierion
	9.4 Genomics
		9.4.1 Real World Use-Cases
			9.4.1.1 doc.ai
			9.4.1.2 EncrypGen
			9.4.1.3 Nebula Genomics
	9.5 Food Supply Chain
	9.6 Real Estate
		9.6.1 Title Management
		9.6.2 Smart Assets
		9.6.3 Trust and Transparency
		9.6.4 Financing
		9.6.5 Cost and Efficiency
		9.6.6 Tokenization
		9.6.7 Pros and Cons of Tokenization
	9.7 Crowd Operations
		9.7.1 Decentralized Voting (Electoral Process)
10 Banking and Finance
	10.1 Banking and Investment
		10.1.1 Identity Authentication
		10.1.2 Banking Charges
		10.1.3 Fast Payments
		10.1.4 Withdrawal and Settlements
		10.1.5 Credit and Loans
		10.1.6 Transfer of Assets
		10.1.7 Peer-to-Peer Transfers
		10.1.8 Hedge Funds
		10.1.9 Fundraising
		10.1.10 Enhanced Security
		10.1.11 Accountability
	10.2 Trade Finance
		10.2.1 Smart Contracts
		10.2.2 Enterprise Resource Planning
		10.2.3 Data Repositories and Registries
		10.2.4 Tokenization of Fiat Money
		10.2.5 Lightning Network
		10.2.6 Pre- and Post-trade Processes
		10.2.7 Accounts and Audit
		10.2.8 Latent Benefits
			10.2.8.1 Decentralization
			10.2.8.2 Information Transmission
			10.2.8.3 Incorporation of IoT
			10.2.8.4 Defense Mechanism
			10.2.8.5 Transparency
			10.2.8.6 Disintermediation
			10.2.8.7 Corporate Lending
			10.2.8.8 Cost Efficiency
			10.2.8.9 Loyalty Rewards
		10.2.9 Impending Challenges and Remediation
			10.2.9.1 Security
			10.2.9.2 Storage Capacity
			10.2.9.3 Block Time
			10.2.9.4 Privacy
			10.2.9.5 Cyberattacks
			10.2.9.6 Robustness
			10.2.9.7 Legal Enforcement
	10.3 Auction Process
	10.4 Decentralized Finance
		10.4.1 DeFi Financial Products
		10.4.2 Total Value Locked in DeFi
		10.4.3 Use Cases for Decentralized Finance
			10.4.3.1 Asset Management
			10.4.3.2 Tokenization
			10.4.3.3 Tokenized Derivatives
			10.4.3.4 Decentralized Exchanges
			10.4.3.5 Decentralized Autonomous Organization
			10.4.3.6 Data Analytics and Assessment
			10.4.3.7 Payments
			10.4.3.8 Lending and Borrowing
			10.4.3.9 Identity
			10.4.3.10 Know Your Transactions
			10.4.3.11 Insurance
			10.4.3.12 Margin Trading
			10.4.3.13 Marketplace
			10.4.3.14 Gaming
			10.4.3.15 Yield Farming
		10.4.4 Ethereum as a DeFi Platform
			10.4.4.1 Fast Money Transfer around the World
			10.4.4.2 Stream Money across the Globe
			10.4.4.3 Programmable Money
			10.4.4.4 Access Stable Currencies
			10.4.4.5 Borrowing
			10.4.4.6 Lending
			10.4.4.7 No-loss Lottery
			10.4.4.8 Exchange Tokens
			10.4.4.9 Advanced Trading
			10.4.4.10 Fund Aggregation
			10.4.4.11 Portfolio Management
			10.4.4.12 Quadratic Funding
			10.4.4.13 Crowd Funding
			10.4.4.14 Insurance
	10.5 Prediction Markets
		10.5.1 Scope for Decentralized Markets
		10.5.2 Real World Examples of Prediction Markets
			10.5.2.1 Augur
			10.5.2.2 TotemFi
			10.5.2.3 Finance.vote
			10.5.2.4 OptionRoom
			10.5.2.5 Polymarket
		10.5.3 Summary
11 Growing Landscape of Blockchain
	11.1 Blockchain Applications in Real World: An Overview
	11.2 e-Governance
	11.3 Supply Chain Management
		11.3.1 Data Logging on Ledger
		11.3.2 Access to a Ledger
	11.4 e-Commerce
		11.4.1 Backend
		11.4.2 Smart Contracts
		11.4.3 Ethereum Front-end
		11.4.4 Currency Store
	11.5 Distributed Resources and Internet of Things
		11.5.1 Tracking and Compliance
		11.5.2 Delivery Consignment
		11.5.3 Maintenance Record
	11.6 Decentralized Streaming
		11.6.1 Operative Mechanism
			11.6.1.1 Orchestrator
			11.6.1.2 Delegators
			11.6.1.3 Participation Rewards
		11.6.2 Video Mining
			11.6.2.1 Dual Mining
			11.6.2.2 Trade-offs and Considerations
			11.6.2.3 Earnings
			11.6.2.4 Rewards
			11.6.2.5 Fees
			11.6.2.6 Costs
			11.6.2.7 Per Pixel Pricing
			11.6.2.8 Probabilistic Micropayments
			11.6.2.9 Automatic Price Adjustments
			11.6.2.10 Transcoding Pools
			11.6.2.11 Private Pools
			11.6.2.12 Public Pools
			11.6.2.13 Selection
			11.6.2.14 Economic Security
			11.6.2.15 Latency
			11.6.2.16 Other Considerations
12 Functional Mechanism
	12.1 Software Requirements
	12.2 Installing a Mobile Application
	12.3 Fetching or Uploading the Documents
	12.4 Government or Third-party Access
	12.5 Credibility Through Smart Contracts
	12.6 User-Optimized Features
Appendices
Glossary
Index
EULA