Kickstart Blockchain and Cryptography Fundamentals: Navigate the Intricacies of Modern Blockchain, Cryptography, Smart Contracts and Hyperledger for Driving Real-World Transformations

Master Blockchain, Cryptography, and Smart Contracts Key Features ● Delves into core blockchain concepts, from cryptographic foundations to enterprise applications. ● Covers cutting-edge topics like smart contracts, Hyperledger, and blockchain interoperability, providing a future-focused perspective. ● Real-world examples of how blockchain can transform industries like finance, healthcare, and supply chain management. Book Description Unlock the true potential of blockchain technology with this essential guide, crafted for students and professionals looking to stay ahead in the fast-evolving digital landscape. Beginning with the foundations of Blockchain, the book moves on to explain the basics of decentralized, distributed ledgers that secure digital assets. You will then explore the role of Cryptographic Hash Functions (CHF) in safeguarding blockchain transactions through fixed-length hash values. Next, you will discover applications of Blockchain in Cryptocurrency and how digital assets like Bitcoin operate without central authorities. The book also covers Distributed Consensus in Open and Closed Environments, showing how blockchain ensures uniform agreement among nodes without a central server. You will then explore how blockchain is transforming industries by enabling secure, peer-to-peer transactions. The book introduces Hyperledger and Smart Contracts, highlighting how these tools automate and secure agreements without intermediaries. Finally, you will learn about facilitating communication between different blockchain networks through Blockchain Interoperability, and Legal and Environmental Aspects, examining the legal and environmental challenges blockchain faces. This book is not just a resource — it's your roadmap to mastering blockchain technology and revolutionizing your business. What you will learn ● Learn how cryptographic hash functions transform data into fixed-length values and their role in blockchain security. ● Explore how cryptocurrencies like Bitcoin leverage blockchain technology for digital asset management. ● Understand how consensus mechanisms validate transactions and maintain ledgers in open blockchain networks. ● Discover how blockchain secures data transfers and eliminates intermediaries in enterprise settings. ● Examine blockchain use cases in enterprises, such as cross-border payments and supply chain management. ● Learn about Hyperledger Fabric and smart contracts, focusing on automating and securing transactions in permissioned blockchains. ● Transform blockchain networks to achieve communication through interoperability. Who is this book for? This book is tailored for undergraduates in Computer Science, IT, and MCA programs, as well as professionals and individuals in related fields. It assumes a foundational understanding of blockchain technology and cryptography, making it ideal for those seeking to deepen their knowledge in these areas. Cover Page Title Page Copyright Page Dedication Page About the Author Acknowledgements Preface Errata Table of Contents 1. Overview of Blockchain Technology Introduction Structure Introduction to Blockchain Technology Blockchain Architecture Working of a Blockchain Public Ledger Distributed Ledgers Business Ledger Problems with Conventional Business Ledgers Hyperledger Blockchain Decentralization Transparency Bitcoins Trustworthiness of Bitcoins COVID-19’s Impact on Bitcoin Smart Contracts Essential Elements of Smart Contracts Smart Contracts and Blockchain Smart Contract Platforms Building Blocks of Blockchain Main Building Blocks Transactions Key Steps of Blockchain Transaction Authentication Authorization Proof of Work (PoW) Miners The Energy Consumption in the Process of Mining The Problem with Proof of Work Proof of Stake The Process of Transaction Distributed Consensus Properties of Blockchain Blockchain Layers Consensus Taxonomy and Properties Consensus Properties Types of Transactions Types of Blockchain Private Transactions Cryptocurrencies: The Beginning of Blockchain’s Technological Rise Cryptocurrencies as a Blockchain Cryptocurrency: Procedure of Its Working Types of Cryptocurrency Advantages and Disadvantages of Cryptocurrency Permissioned Model of BlockChain Permissioned Blockchains Benefits of Permissioned Blockchains Consequences of Permissioned Blockchains Difference Between Permissioned and Permissionless Blockchain Blockchain Security Benefits and Drawbacks of Blockchain Unlawful Behavior Business Benefits of Blockchain Evolution of Blockchain History of Blockchain Likely Future Trends Additional Information Conclusion References 2. Cryptographic Hash Function Introduction Structure Introduction to Cryptographic Hash Function Hashing Miners Non-Fungible tokens (NFTs) Cryptographic Hash Function (CHF) The Need and Purpose of Generating and Using Hash Functions Properties of Hash Functions Methods for Quick Production of Cryptographic Hashes The Trade-Off of Design of Cryptographic Hash Functions Hash Functions for the Bitcoin Mining Process The Process of Solving the Hash Protection by Providing Secured Hash Algorithms Collision Attacks The Nonce Building Blocks with Nonces Process of Reducing Mining Difficulty Significance of the Adjustment Introduction to One-Way Hash Functions Hash Pointer and Merkle Tree (Hash Tree) Data Structures Built with Hash Pointers Tamper-Evident Property of Blockchain Merkle (Hash Tree) Cryptocurrency Advantages of Cryptocurrencies Disadvantages of Cryptocurrencies First Cryptocurrency Bitcoin Digital Signature Encryption with Digital Signature Types of Encryption Process Digital Certificate Authority Components of Digital Certificate Comparing Digital Certificate with Digital Signature Rules for Working of Digital Signature Main Features of the Digital Signature Electronic Signature Differences Between Digital Signature and Electronic Signature Digital Certification in India Public Key Cryptography or Asymmetric Cryptography Cryptographic Hashing Classes of Cryptographic Hash Functions Conclusion References 3. Understanding Blockchain with Cryptocurrency Introduction Structure Blockchain in Business Creation of Bitcoins Safety Requirements Creation of Coins Cryptocurrency Mining Reward (Using Bitcoin) Coins Versus Tokens User’s Ideal Basic Requirements for New Payment System Pricing Cryptocurrencies Why Bitcoin Needs Miners Reasons for Mining Bitcoin Versus Blockchain Payments and Double Spending Preventing Double Spending Double-Spending Attacks Bitcoin Scripts Understanding an OP_CODE or Operation Code Objective of Creating Script Language Example of a Bitcoin Script Bitcoin’s P2P (Peer-to-Peer) Network Transactions in Bitcoin Network Transactions - Private Keys Public and Private keys Broadcasting and Confirmations Variable Duration of Bitcoin Transaction Confirmations Bitcoin Transaction Fees Block Processing - Mining Blockchain Data Structure Cryptocurrency Transactions Blocks Block Propagation and Block Relay Block Propagation Time or Block Propagation Delay Relay Network Blockchain Relay Networks Conclusion References 4. Distributed Consensus in Open Environments Introduction Structure Consensus in a Bitcoin Network Consensus-Building Process The Mechanism of Consensus Public Blockchains Function Workproofing The Proof of Work (PoW) Open and Closed Types of Blockchains Advantages of Proof of Work Technical Specifics of Blockchain Proof of Work Disadvantages of Proof of Work Blockchains HashCash Protocol for POW Bitcoin and PoW The Proof of Stake (PoS) Attacks on PoW and the Monopoly Proof of Burn (PoB) Proof of Elapsed Time (PoET) Blockchain Understanding Proof of Elapsed Time (PoET) Operation of PoET Distinguishing PoET from PoW Proof of History (PoH) The Hardness of Mining and Mining Difficulty Evolution of Mining Equipment Mining Pool Conclusion References 5. Understanding Blockchain for Enterprises Introduction Structure Permissioned Blockchain Model and Use Cases Types of Blockchains Permissionless Blockchains Difference Between Permissioned Blockchain and Permissionless Blockchain Permissioned Blockchains and Tokens Advantages and Disadvantages of Permissioned Blockchain Characteristics Associated with Permissioned (or Private Blockchain Networks) The Ripple and XRP Layers of Blockchains Layer 1 of Blockchain: BFT Consensus Layer 2 of Blockchain: Smart Contracts Layer 3 of Blockchain: Applications and Use Cases List of Best Permissioned Blockchain Platforms Ethereum IBM Blockchain Hyperledger Fabric Hyperledger Sawtooth R3 Corda Tezos EOSIO Blockchain Platform Stellar ConsenSys Quorum Hedera Hashgraph Emergence of OpenChain Challenges of Permissioned Solutions State Machine Replication The State Machine Approach Consensus on a Sequence of Values Fault Tolerant State Machine Replication (FT-SMR) Optimizing for a Sequence of Values Example of State Machine: Smart Contract – Crowdfunding Conclusion References 6. Distributed Consensus in Closed Environment Introduction Structure Distributed Consensus Consortium Blockchain Overview of Consensus Models for Permissioned Blockchain Types of Distributed Consensus Algorithm Paxos Algorithm Raft Consensus Algorithm Byzantine (Military) Generals Problem Analogy Byzantine Fault Tolerance (BFT) Characteristics/Objective of Byzantine Fault Tolerance Types of Byzantine Failures Practical Byzantine Fault Tolerance A Simplified Three-Phase pBFT Process Applicable Scenarios Limitations Advantages of pBFT Working Style of pBFT Limitations of pBFT Platforms Using pBFT Variants Asynchronous Byzantine Fault Tolerance (ABFT) Lamport-Shostak-Pease BFT Algorithm Conclusion References 7. Enterprise Application of Blockchain Introduction Structure Cross-Border Payments Blockchain and Cross-Border Money Transfer Drawbacks of Cross-Border Money Transfer Know Your Customer (KYC) Steps Involved in KYC KYC Registry for SWIFT India: The Reserve Bank of India KYC Guidelines for Banks in 2002 Blockchains Applications Blockchain in Food Industry Blockchain in Mortgage Processing Conventional Loan Procedure The Mortgage Process and Blockchain Blockchain Mortgages’ Advantages Blockchain-Enabled Trade Blockchain in Finance and Banking The Use of Blockchain Technology in Logistics Blockchain in Real Estate Documents Blockchain in Medical Field Blockchain in Elections and Voting Enterprise Blockchain Requirements Currency Property Records Supply Chains Blockchain Technology Disrupting Financial Services Adopting Blockchain Technology in Business Application of Blockchain in Legal Field Use of Blockchain in Real Estate Logistics and Supply Chain Through Blockchain Impact of Blockchain Innovation on Business Trade International Trade Benefits of Blockchain in Global Trade and Commerce Trade Finance Trade Finance Benefit to Business we.trade: The Largest Blockchain-Enabled Trade Networks we.trade and Small and Medium-sized Enterprises (SMEs) Supply Chain Finance Digital Identity in Blockchain Meaning of Identity Managing Multiple Identities Anonymous Authentication Blockchain: The Challenges Facing Governments About Tata Steel Benefits of Blockchain Conclusion References 8. Hyperledger and Smart Contracts Introduction Structure Hyperledger Fabric Advantages of Hyperledger Fabric Architecture Architecture of Hyperledger Transaction Data Structures in Blockchain Partitioning (Ordering Service Channels) Components of a Hyperledger Fabric Network Writing a Blockchain Application Identity A Simple Scenario to Explain the Use of an Identity A Public Key Infrastructure (PKI) Digital Certificates Policies in Hyperledger Fabric Understanding Policy Need of Policies in Hyperledger Fabric Implementation of Policies Throughout Fabric Application Channel Configuration Access Control Lists (ACLs) Policy Types Valid System Chaincode (VSCC) Access Control Attribute-Based Access Control (ABAC) in Hyperledger Fabric Membership Service Provider (MSP) Channels in Hyperledger System Multiple Channels Transaction Validation Read-Write Set Transaction Validation Flow of Transactions Executing Contracts in Blockchain Basic Definition of Smart Contracts EOSIO Blockchain Advantages of Intelligent Contracts Smart Contract Anatomy Smart Contract’s Life Cycle Use Cases of Smart Contracts Smart Contract Usage Patterns Smart Contract Platforms Benefits of Smart Contracts Challenges to Smart Contracts Technology Conclusion References 9. Blockchain Interoperability Introduction Structure Need for Blockchain Interoperability Blockchain-Based Initiatives Avalanche Polygon (MATIC) Crypto Tokens Cross-Chain Technology Main Characteristic Features of Cross-Chain Technology Working Approaches of Cross-Chain Technology Benefits of Cross-Chain Technology Blockchain Interoperability Projects Hyperledger Cactus Key Characteristics of Hyperledger Cactus Hyperledger FireFly Salient Features of Hyperledger FireFly Weaver Salient Features of Weaver YUI Salient Features of YUI Blockchain Interoperability Architecture Conclusion References 10. Legal and Environmental Aspects Introduction Structure Legal Aspects of Cryptocurrencies Legal Status of Cryptocurrencies in Major Countries of the World The Transfer of Property Digital Ownership and Non-Fungible Tokens (NFT) Difference Between NFT and Cryptocurrency Working Method of NFT Use Cases for NFTs Digital Ownership with Blockchain Electricity Consumption and Environmental Footprints in Usage in Blockchain Operations Combating Bitcoin’s Energy Problem The Environmental Future of the Blockchain Illicit Contents Scammers Transfer of Funds Preventing Money Laundering by Blockchain Technology Immutable Ledger for Regulatory Oversight Transactions Monitoring in Smart Contracts Exchange of Blockchain MetaMask Exchange for Ethereum Frailty Metaverse The Origins of the Metaverse Conclusion References 11. Exercises for Practical Introduction Structure Practical 1: How to Get Started with Docker Container Containers Linux Containers (LXC) The Docker Dashboard Docker Container Docker’s Working Method Docker Client and Server Image Docker The Docker Registry Containerized Docker Step-by-Step Docker Installation on Windows Starting the Docker Desktop Tool Getting Started with Docker Container Running Applications Using Docker Compose The Docker Dashboard Advantages of Working with Docker on Windows Container Revisited Practical Exercise 2: Create and Deploy a Blockchain Network Code Pattern Networks of Blockchains Blockchain Network Types Creating Blockchain Network-IBPV20 Using the IBM Blockchain Platform Building a Blockchain Application Using the IBM Blockchain Platform Packaging the Smart Contract Creating IBM Cloud Services Practical Exercise 3: Interact with a Blockchain Network Developer Pattern Deploy Blockchain Network Smart Contract on the Network Instantiate Smart Contract Connect Application to the Network Create an Application Admin Update Application Connection Run the Application Troubleshooting Extending the Code Pattern Conclusion References Index