Blockchains: A Handbook on Fundamentals, Platforms and Applications

Contents
About the Editors
Part I Building Blocks
	Ten Myths About Blockchain Consensus
		1 Introduction
		2 Background on Consensus and Proof-of-*
		3 Myth #1: Proof-of-* Solves Consensus
			3.1 Example: Bitcoin
		4 Myth #2: Consensus Is the Bottleneck of Blockchains in LANs
			4.1 Example: Hyperledger Fabric
		5 Myth #3: Consensus Is the Bottleneck of Distributed Ledgers in WANs
			5.1 Example: Corda
		6 Myth #4: CFT Consensus Algorithms Are Safe Under Byzantine Faults
			6.1 Example: Raft
		7 Myth #5: A Blockchain with Signatures and Hashes Is Secure
			7.1 Example: Raft
		8 Myth #6: Adding a BFT Consensus to a CFT Blockchain Makes It BFT
			8.1 Example: Hyperledger Fabric and BFT-SMaRt
		9 Myth #7: BFT Consensus Needs a Linear Message Complexity
			9.1 Example: HotStuff vs. Democratic BFT (DBFT)
		10 Myth #8: Reconfiguring Consensus Participants Is Easy
			10.1 Examples: Hyperledger Fabric and Tendermint
		11 Myth #9: Blockchain Performance Is Not Limited by the Cryptography
			11.1 Example: Red Belly Blockchain
		12 Myth #10: Blockchain Needs to Solve the Classic Consensus Problem
			12.1 Example: Validity Predicate-Based Byzantine Consensus Problem
		13 Final Remarks
		References
	Cryptographic Primitives
		1 Core Cryptographic Primitives in Blockchain
			1.1 Hash Function
			1.2 Signature Scheme
			1.3 Encryption Scheme
			1.4 Accumulator
			1.5 Commitment Scheme
			1.6 Secret Sharing
			1.7 Multiparty Computation
			1.8 Zero-Knowledge Proofs
		2 Allied Cryptographic Primitives in Blockchain
			2.1 Verifiable Random Function
			2.2 Verifiable Delay Function
			2.3 Pseudorandom Function
			2.4 Oblivious RAM
			2.5 Oblivious Transfer
			2.6 Access Control Encryption
			2.7 Identity-Based Encryption
			2.8 Incremental Cryptography
			2.9 Lightweight Cryptography
			2.10 White-Box Cryptography
			2.11 Threshold Cryptography
			2.12 Post-quantum Cryptography
		3 Conclusion
		References
Part II Popular Blockchains
	Bitcoin Blockchain System: An Overview of Security and PrivacyAspects
		1 Introduction
			1.1 Organization
		2 Overview of Bitcoin System
			2.1 Transactions and Blocks
			2.2 Proof-of-Work (PoW)
			2.3 Blockchain
			2.4 Address
			2.5 Script
		3 Security Threats and Countermeasures to Bitcoin Systems
			3.1 Double-Spending Attacks
				3.1.1 Possible Countermeasures
			3.2 Mining Pool Attacks
				3.2.1 Possible Countermeasures
			3.3 Bitcoin Network Attacks
				3.3.1 Possible Countermeasures
			3.4 Client-Side Attacks
				3.4.1 Possible Countermeasures
		4 Privacy Issues and Countermeasures
			4.1 Privacy Concerns in Bitcoin System
			4.2 Solutions to Address Privacy Concerns in Bitcoin System
		5 Conclusions
		References
	The Ethereum Blockchain: Implementation and Security Aspects
		1 Introduction to Ethereum
		2 Overview of the Ethereum Platform
			2.1 Blockchain and Transactions
				2.1.1 Accounts
				2.1.2 Ethereum\'s Message
				2.1.3 Transactions
				2.1.4 The Ethereum State Machine
			2.2 Mining and Consensus Algorithm
				2.2.1 The Mining Process
				2.2.2 Ethash: Memory-Intensive PoW
				2.2.3 Beacon Chain
			2.3 Smart Contracts
			2.4 Data
				2.4.1 Data Location
			2.5 Functions
				2.5.1 Constructors
				2.5.2 Function Modifiers
				2.5.3 Events
			2.6 Resources
			2.7 Tokens
			2.8 The Ethereum Virtual Machine
		3 Vulnerabilities and Known Attacks
			3.1 Blockchain
			3.2 Smart Contracts and Accounts
				3.2.1 Defences Tools
			3.3 Consensus Algorithm
			3.4 The Ethereum Virtual Machine
		4 Conclusions
		References
	The Future Ring Confidential Transaction Protocols for Privacy-Preserving Blockchain
		1 Introduction
			1.1 Bitcoin Privacy and Problems
			1.2 Monero
		2 RingCT 3.0: A Scalable and Efficient RingCT Protocol
			2.1 Security Model for RingCT
			2.2 Our Basic Construction
			2.3 Our Efficient Construction
		3 MatRiCT: The First Practical Post-quantum RingCT Protocol
			3.1 Overview of MatRiCT
			3.2 Algorithmic Description of MatRiCT
		4 MatRiCT+: More Efficient Post-quantum RingCT
		References
	Algorand Blockchain
		1 Introduction
		2 Algorand Overview
		3 Algorand Assumptions
		4 Cryptographic Sortition
		5 The Protocol BA
		6 Deployment
			6.1 Block and Transaction Format
			6.2 Bootstrapping
			6.3 Communication
			6.4 Scalability
		7 Security Discussion
			7.1 Nothing-at-Stake Attacks
			7.2 Grinding Attacks
			7.3 Long-Range Attacks
		8 Use Cases
		9 Conclusion
		References
	Tendermint
		1 Introduction
		2 Tendermint Blockchain Platform
			2.1 Blockchain Projects Using Tendermint
		3 Tendermint Blockchain Agreement Procedure
			3.1 Tendermint Intra-committee Consensus Algorithm
				3.1.1 First Version
				3.1.2 The Livelock Bug
				3.1.3 Corrected Version
		4 An Algorithmic Perspective of Blockchain Consensus
		5 Future Directions
		6 Conclusion
		References
Part III Security and Scalability
	The Security of Delegated Proof-of-Stake Wallet and Stake Pools
		1 Introduction
			1.1 The Blockchain Data Structure
			1.2 The Block Structure
			1.3 The Desirable Blockchain Properties
		2 Security Considerations
		3 The Proof-of-Stake Model
		4 Attacks on Proof-of-Stake Consensus
			4.1 Similarities with PoW: 51% and Sybil Attacks
			4.2 Grinding Attack
			4.3 Nothing-at-Stake Attack
			4.4 Long-Range Attacks
		5 The General PoS Wallet
			5.1 The Basic Requirements
			5.2 Address Attributes for an Account
			5.3 Payment Transaction
			5.4 Stake Pool Registration
			5.5 Stake Delegation
				5.5.1 Heavy and Light Delegation
				5.5.2 Delegation Chains
			5.6 PoS Protocol Participation
			5.7 Wallet Modes of Operation
				5.7.1 The Regular Mode of Operation
				5.7.2 Offline Wallet with Cold Staking
				5.7.3 Enhanced Unlinkability
				5.7.4 The Stake Pool\'s Wallet
		6 The Address Malleability
			6.1 Adversary and Attack Models
			6.2 Classification of Malleability Attacks
		7 Security in the Presence of Stake Pools
			7.1 Theoretical Limit on Malicious Stake Share
			7.2 Security in Stake-Pooled PoS
				7.2.1 Stake Pool and Sybil Attack
				7.2.2 Replay Attack
		8 Final Remarks
		References
	Layer 2 Scaling Solutions for Blockchains
		1 Introduction
		2 Scalability Trilemma
		3 Factors Responsible for Decreasing Blockchain\'s Scalability
		4 Scaling Solutions in Blockchain
		5 Off-Chain Scaling
			5.1 Channels
				5.1.1 Channels Dealing with Simple Payments: Poon and Dryja Bidirectional Payment Channel
				5.1.2 Lightning Network Construction
				5.1.3 Routing Algorithms in Payment Channel Network
				5.1.4 Payment Protocol in Payment Channel Network
				5.1.5 State Channels: Dealing with More than Simple Payments
			5.2 Sidechain
				5.2.1 Pegged Sidechains
			5.3 Commit Chain
				5.3.1 Plasma
		6 Conclusion
		References
	Illicit Blockchain Content: Its Different Shapes, Consequences, and Remedies
		1 Introduction
		2 Distribution of Blockchain Content and Its Consequences
			2.1 The Path of Blockchain Content and Technical Consequences
			2.2 Considerations of Potential Legal Consequences
		3 Content Insertion Methods
			3.1 Low-Level Insertion of Nonfinancial Blockchain Data
			3.2 Content Insertion Services
		4 Quantitative and Qualitative Analysis
			4.1 Methodology
			4.2 Low-Level Content Insertion
			4.3 Service-Based Content Insertion
		5 Mitigation of Unwanted Blockchain Content Insertion
			5.1 On the Capability to Filter Objectionable Content
			5.2 Financially Disincentivizing Content Insertion
			5.3 Cryptographic Commitments to Transaction Benignity
			5.4 Alternative Blockchain Models
		6 Removing Blockchain Data Without Consensus Changes
			6.1 Local Erasure of Unwanted Content
			6.2 Bitcoin-Compatible Block Pruning
		7 Retrospective Removal of Unwanted Blockchain Content
			7.1 A Cryptographically Redactable Blockchain
			7.2 Voting-Based Redactions in the Permissionless Setting
			7.3 Redactions for Enhanced Privacy
		8 Discussion and Future Research Directions
		9 Conclusion
		References
	Blockchain-Based Distributed and Secure Digital Forensic Investigation Systems
		1 Introduction
		2 Overview of Digital Forensics and Blockchain Technology
			2.1 Digital Forensics
			2.2 Blockchain Technology
		3 Blockchain-Based Digital Forensics Techniques
			3.1 Blockchain-Based Digital Forensics Architecture
			3.2 State-of-the-Art Proposals
				3.2.1 Blockchain-Based IoT Forensics
				3.2.2 Blockchain-Based Cloud Forensics
				3.2.3 Other Blockchain-Based Forensics Proposals
		4 Discussions and Future Research Directions
		5 Conclusions
		References
Part IV Applications
	Supply Chain Management Using Blockchain
		1 Introduction
		2 Blockchain Suitability Analysis
		3 Multi-Party Integration
			3.1 Requirements
			3.2 Solution Designs
				3.2.1 Design 1: Using a Public Blockchain
				3.2.2 Design 2: Using a Consortium Blockchain
				3.2.3 Design 3: Using Pairwise Blockchains
			3.3 Property Analysis
		4 Tracking Supply Chain Items
			4.1 Blockchain Registries
			4.2 Registry Architecture
			4.3 Model-Driven Registry Development
		5 Digital-Physical Linkage
			5.1 Techniques to Capture Physical Properties of an Item
			5.2 High-Level Architecture for Digital-Physical Linkage
			5.3 Property Analysis
		6 Business Process Management
			6.1 Techniques for On-Chain Process Management
				6.1.1 Enforce Business Rules
				6.1.2 Integrate the Data Flow
				6.1.3 Analyze Process Behavior
			6.2 Advanced Topics
		7 Summary
		References
	Blockchain Technology for E-Governance Applications
		1 Introduction to Blockchain Technology in E-Governance
		2 Work at IIT Kanpur\'s National Blockchain Project
			2.1 Self-Sovereign Identity of Citizens
				2.1.1 Introduction
				2.1.2 Problems with Current Identity Solutions
				2.1.3 Self-Sovereign Identity
				2.1.4 Decentralized Identifier (DID)
				2.1.5 Verifiable Credentials
				2.1.6 The SSI Ecosystem
				2.1.7 Use Cases
			2.2 Land Registration
				2.2.1 Introduction
				2.2.2 Problems with the Current System
				2.2.3 How Blockchain Can Help?
				2.2.4 IIT Kanpur Blockchain for Land Records
				2.2.5 Examples Across the World
			2.3 Healthcare Applications
				2.3.1 Introduction
				2.3.2 Decentralized Consent Management
				2.3.3 Blockchain as a Trust (Integrity) Layer
				2.3.4 Credentials for Health Staff
			2.4 Blockchains in Supply Chain
				2.4.1 Introduction
				2.4.2 Problems with Current System
				2.4.3 How Blockchain Can Add Value?
				2.4.4 Examples
		3 Other Blockchain-Based E-Governance Efforts in India
		4 Conclusion and Future Work
		References
	When Blockchain meets Smart Cities: Opportunities, Security and Future Research
		1 Introduction
		2 Applications
			2.1 Smart Buildings
				2.1.1 Access Control
				2.1.2 Sensing
				2.1.3 HVAC
				2.1.4 Surveillance Systems
			2.2 Smart Grids
				2.2.1 Energy Trading
				2.2.2 Microgrid Control
				2.2.3 Security and Reliability of Grids
			2.3 Government
				2.3.1 Services
				2.3.2 Policy Enforcement
				2.3.3 Community Self-Governance
			2.4 Smart Transportation
				2.4.1 Smart Vehicles
				2.4.2 Public Transportation
				2.4.3 Ride Sharing
				2.4.4 Smart Parking
				2.4.5 Electric Vehicles Charging Pods
			2.5 Healthcare
				2.5.1 Patient Data Management
				2.5.2 Organisational Data Management
			2.6 Environment
				2.6.1 Waste Management
				2.6.2 Carbon Emissions
		3 Security Aspects
			3.1 Security and Privacy Issues in Smart Cities
			3.2 Security Properties for Smart Cities
			3.3 Securing Smart Cities Through Blockchain Technology
		4 Chapter Summary
		References
	Decentralized Identity Management and Blockchains: Design Patterns and Architectures
		1 Introduction
		2 Evolution of Identity Management
			2.1 What Is Digital Identity
			2.2 Evolution of Identity Models
				2.2.1 The Centralised Identity Model
				2.2.2 The Federated Identity Model
				2.2.3 The User-Centric Identity Model
				2.2.4 The Decentralised Identity Model
			2.3 The Self-Sovereign Identity Model
		3 Digital Identity and Related Standards
			3.1 Decentralised Identifiers (DID)
			3.2 Web Identity and Discovery (WebID)
			3.3 Verifiable Credentials
			3.4 X.509 and PGP
		4 Blockchains in Self-Sovereign Identity Systems
			4.1 The Role of Blockchains in SSI
			4.2 Existing Blockchain-Based SSI Systems
			4.3 Non-Blockchain-Based Solutions
		5 SSI Lifecycle and Design Patterns
			5.1 SSI Objects and Their Lifecycles
			5.2 SSI Design Patterns
				5.2.1 Key Object Related Patterns
				5.2.2 Identifier Object Related Patterns
				5.2.3 Credential Object Related Patterns
		6 A Service-Oriented Reference Architecture Proposal for SSI
		7 Conclusion
		References
	From Centralized to Decentralized Remote Electronic Voting
		1 Introduction
		2 Remote Electronic Voting (REV) Fundamentals
			2.1 Building Blocks of an REV Architecture
			2.2 Architectural Models for Public Bulletin Boards
			2.3 Protocol Requirements
				2.3.1 Privacy Properties
				2.3.2 Verifiability
			2.4 General System Requirements
		3 Cryptographic Primitives and Assumptions
			3.1 ElGamal Public-Key Cryptosystem
				3.1.1 ElGamal Key Generation, Encryption, and Decryption
			3.2 Message Encoding in ElGamal
			3.3 Hard Problems and Post-Quantum Safety
		4 Overview of REV Approaches
			4.1 Encrypt and Sign Approach
			4.2 The Two Agencies Approach
			4.3 Homomorphic Encryption Approach
			4.4 Mix Network-Based Approach
			4.5 Discussion of Approaches
		5 Research Directions Toward a Decentralized REV System
			5.1 Centralized REV System
			5.2 Decentralized REV System
			5.3 Open Issues and Challenges
		6 Overall Considerations
		References
	Blockchain Technology Accelerating Industry 4.0
		1 Introduction
		2 Envisioned Benefits of Blockchain Technology in the Industry
			2.1 Increased Transparency (222I)
				2.1.1 Business-to-Business Transparency
				2.1.2 Business-to-Customer Transparency
				2.1.3 Customer-to-Customer Transparency
			2.2 Decentralized Accountability (222II)
				2.2.1 Data Accountability
				2.2.2 Legal Compliance
				2.2.3 Building Reputation
			2.3 Collaboration (222III)
				2.3.1 Benefits for Already Established Collaborations
				2.3.2 Benefits for New or Ad hoc Collaborations
			2.4 Trustworthy Automation (222IV)
				2.4.1 Easing Payment Processing
				2.4.2 Machine-to-Machine Communication
			2.5 Blockchains Foster Digitalization (222V)
				2.5.1 Disintermediation Through Blockchain-Backed Data Management
				2.5.2 Expressiveness of Digital Certification
				2.5.3 Blockchain-Backed Contracts
		3 Challenges and Design Spaces for Industrial Blockchains
			3.1 Control over Blockchain Infrastructure
			3.2 Access to Blockchain Data
			3.3 Scalable Blockchain for Massive Amounts of Industrial Data
			3.4 Efficiency of Blockchain Operation
		4 Use of Blockchain Technology in Industrial Domains
			4.1 Engineering and Manufacturing
			4.2 Lumber Industry
			4.3 Petroleum Industry
			4.4 Energy Industry
			4.5 Food Supply
			4.6 Logistics
			4.7 Waste Management
			4.8 Insurance Industry
			4.9 Gemstone Mining
		5 Blockchain Technology for Industry 4.0: The Big Picture
			5.1 Assessing Blockchain Benefits for Industry 4.0
			5.2 Open Challenges for a Blockchain-Enabled Industry 4.0
		6 Conclusion
		References
	Blockchain for Health Data Management
		1 Introduction
		2 Smart E-Health Architecture
			2.1 Overview
				2.1.1 Design Goals
			2.2 System
				2.2.1 IoMT Layer
				2.2.2 EC Layer
				2.2.3 MC Layer
				2.2.4 Data User Layer
		3 E-Health Blockchain
			3.1 Transaction
			3.2 Medical Record Smart Contract (MRSC)
			3.3 Data Sharing Smart Contract (DSSC)
		4 EMRs Storage and Data Sharing Frameworks Using Smart Contracts
			4.1 EMR Storage Using MRSC
			4.2 Data Sharing Using DSSC
		5 A Case Study for Health Data Management with Blockchain
			5.1 System Setup
				5.1.1 Data Storage with MRSC
				5.1.2 Data Sharing with DSSC
			5.2 Results and Evaluation
		6 Conclusion
		References
	Supporting Secure Trusted Manufacturing via Blockchain
		1 Introduction
		2 Background
			2.1 Analyzing Logs to Detect Anomalies
			2.2 Digital Twins
		3 Enforcing Security and Trust in Manufacturing Using Blockchain
			3.1 Secure Manufacturing Using Blockchain
			3.2 Trustworthy Digital Twins Using Blockchain
		4 Conclusion
		References
	Blockchain for Data Sharing
		1 Introduction
		2 Characteristics and Requirements of Data-Driven Applications
			2.1 Requirements of Data Sharing Apps
		3 Terminologies and Data Sharing Modalities
		4 Data Sharing in Emerging Applications
		5 Blockchain and Its Capabilities
			5.1 Cryptographic Digital Signature
			5.2 Distributed Ledger
			5.3 Consensus Algorithm
			5.4 Decentralized Computation
		6 Trusted Data Sharing Using Blockchain
		7 Peer-to-Peer Data Sharing Using Blockchain
		8 Blockchain-Based Data Marketplaces for Data Economy
		9 Protecting Privacy Using Blockchain
		10 A Note on Tamperproof and Secure Storage of Data Using Blockchain
		11 Opportunities and Design Challenges
			11.1 Big Data and Blockchain
			11.2 On-Chain Computation Using Data
			11.3 Garbage-In-Garbage-Out
			11.4 Bootstrapping Multi-Stakeholder Data-Centric Applications
			11.5 Heterogeneity of Legal Standards
			11.6 Real-Time Data Sharing Limitations
			11.7 Rights Management: Who Is the Owner?
			11.8 Data Deletion Challenges
		12 Summary
		References