184

Blockchain Technology

11.2.1  Blockchain Philosophy

Explanations of blockchain in the literature are not entirely uniform. Practically,

blockchain is like contract enforcement, which regulates transaction processing using

transparency and protected rules to create blockchain peer-to-peer (P2P) network

knowledge systems that cannot be forged or amended and are traceable. The main

breakthrough in blockchain technologies is to disperse transfers to the users, not

the central pool. P2P implies that computers are identical throughout every network

node, and each node has the same network capacity but no centralized server. Both

nodes exchange some services or knowledge using particular protocols. Transactions

shall conform to major financial organizations’ rules, and the transaction documents

are primarily stored and managed by central authorities. With no other third-party

interference, all transactions are processed and held privately for every person. Thus,

the blockchain removes third-party control. However, with the absence of the central

authority, it is impossible to validate the contract and maintain the ledger’s credibility.

This needs a proper verification method called a consensus algorithm (Zheng et al.,

2017; Sikorski et al., 2017; Hamida et al., 2017; Sarmah, 2018). Figure 11.3 illustrates

the algorithm and the methodology adopted in implementing blockchain technology.

Step 1: If an individual agrees to a transaction with another individual, then

transaction data is taken as variable and integrated with trade simultane­

ously, thus creating a data block.

Step 2: The data stored is encrypted to avoid unauthorized usage and is further

distributed to multiple computers using a P2P method.

Step 3: Network members now validate the data using specific algorithms. If

the data is delivered correctly, the algorithm generates a correct hash value.

Step 4: After successful verification, the data is combined with the initial

block, confirming the transaction’s completion.

FIGURE 11.3  Methodology of Implementing blockchain technology.