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Blockchain Technology

Permissioned, permission-less and hybrid. The first one requires that the user request

access to the network’s functionality or features; the second type does not require

any permissions, and any user can get access to the network and its features. The

hybrid type is a combination of the first two types.

The process of encryption using cryptographic keys is done to create digital

signatures for each blockchain. These digital signatures help in providing integrity

to the entire process involved in transferring data over the network through block­

chains. The type of cryptography used in blockchain is asymmetric cryptography

that involves a private key and a public key. The private key is used to encrypt the

message, and the public key is shared with the public; the users need to use their

private key along with the public key to decrypt the message.

A peer-to-peer network is a network that does not involve any intermediate serv­

ers while sharing data between two or more users (peers). Each peer has equal privi­

leges to the other. This forms the backbone of the blockchain technology.

9.5  OPERATIONS INVOLVED IN THE WORKING OF BLOCKCHAIN

The operations that are involved in the working of blockchain are hash functions,

proof-of-work and mining. The hash functions are used to encrypt the data in the

blocks before they are sent through the network in order to prevent any unauthorized

access to the blocks. The hashing algorithm used is SHA-256. This algorithm cre­

ates a 256-bit signature for a text. Every user has two keys, a private key and a public

key. The public key helps to uniquely identify the user, and the private key gives the

user access to their account. With respect to the block, the previous block’s header is

hashed, the transactions in the block are hashed, the nonce is hashed and the block

ID is hashed. The block ID is generated using the previous block header’s hash, the

transaction detail’s hash and the nonce’s hash values.

Data that consumes a lot of time or money but can be easily verified by other

peers such that it satisfies the requirements is termed proof-of-concept. In general,

miners have to find the nonce value for a block by solving some puzzle that involves

mathematics. Once the nonce value is solved, the miner shares it among the network.

Once the other miners verify it, the miner who cracked the nonce will be rewarded.

Miners keep solving mathematical puzzles to decode the nonce value of the

block. Whichever miner is the first to get the nonce value is rewarded. This process

is termed mining. The winning miner is rewarded with bitcoins after the nonce he

found is verified using the proof-of-concept. The fee associated with addition of

blocks to the blockchain is 12.5 bitcoins.

9.6  PROPERTIES OF BLOCKCHAIN

Table 9.2 describes some of the key properties of blockchain.

9.7  APPLICATIONS OF BLOCKCHAIN TECHNOLOGIES

Table 9.3 shows the different areas of applications of blockchain technology (Daley

“Block Chain”, 2020; Daley “Health Care”, 2020).