Abstract
Blockchain is an information technology solution for distributed digital record. Its main properties are secure, traceable, and transparent. Blockchain was first proposed for bitcoin, a decentralized virtual digital currency. Recently, blockchain draws attentions of researchers, entrepreneurs, and investors, because people found that blockchain technology can revolutionize many business practices. This paper describes the fundamentals of blockchain technology, including data structure, data distribution, and transaction execution and validation. This paper also discusses the representative blockchain protocols and development platforms. In addition, this paper outlines the potential applications of blockchain technology and the broader impact it might bring to industry, business, and beyond.
TopBackground
In January 2009, the first bitcoin transaction was successfully completed. In 2010, the first commercial bitcoin transaction was recorded (Morse, 2017). These events marked the beginning of a revolutionary electronic currency. In less than ten years, bitcoin has become the most influential cryptocurrency on the planet. Currently, there are over 200 thousand bitcoin transactions per day. Although this number is much smaller than the number of traditional financial transactions (such as credit card transactions) per day, it is drawing more and more attentions. In addition, other cryptocurrencies were created in the past years following the success of bitcoin.
The major impact of bitcoin might not be limited to financial industries. What is more revolutionary is the fundamental technology used to implement bitcoin–blockchain (Hayen, 2016). Businesses, governments, and institutions have realized the importance and potential applications of blockchain. Intense research and developments are being carried out in various fields. However, as with any other emerging technology, while blockchain has certain strengths and can bring certain benefits, it also has weakness and can bring certain risks. Therefore, it is worth of studying this technology in detail before adopting it in business and applications.
Key Terms in this Chapter
List: A data structure used in computer programs to store data. List is composed of individual data blocks.
Decentralized Network: A computer network that all nodes are equal and no single node controls the entire network.
Binary Tree: A data structure in computer programs to store large amount of data. Compared with other data structures, binary tree provides the fasted access to a data item, in general.
Cryptographic Hash: A hash function used in computer security that takes input data and returns a fixed-size alphanumeric string.
Bitcoin: A decentralized digital currency system implemented with blockchain technology.
Blockchain: A distributed secured record-keeping system with a list structure.
Public-Key Cryptography: A cryptographic technique that uses two asymmetric keys: a public key and a private key.