Build Your Own Blockchain (eBook)

A Practical Guide to Distributed Ledger Technology

Daniel Hellwig, Goran Karlic, Arnd Huchzermeier (Autoren)

eBook Download: PDF

2020 | 1st ed. 2020
XVI, 187 Seiten
Springer International Publishing (Verlag)
978-3-030-40142-9 (ISBN)

Infos

This book provides a comprehensive introduction to blockchain and distributed ledger technology. Intended as an applied guide for hands-on practitioners, the book includes detailed examples and in-depth explanations of how to build and run a blockchain from scratch. Through its conceptual background and hands-on exercises, this book allows students, teachers and crypto enthusiasts to launch their first blockchain while assuming prior knowledge of the underlying technology.

How do I build a blockchain? How do I mint a cryptocurrency? How do I write a smart contract? How do I launch an initial coin offering (ICO)? These are some of questions this book answers. Starting by outlining the beginnings and development of early cryptocurrencies, it provides the conceptual foundations required to engineer secure software that interacts with both public and private ledgers. The topics covered include consensus algorithms, mining and decentralization, and many more. 

'This is a one-of-a-kind book on Blockchain technology.  The authors achieved the perfect balance between the breadth of topics and the depth of technical discussion.  But the real gem is the set of carefully curated hands-on exercises that guide the reader through the process of building a Blockchain right from Chapter 1.' Volodymyr Babich, Professor of Operations and Information Management, McDonough School of Business, Georgetown University

'An excellent introduction of DLT technology for a non-technical audience. The book is replete with examples and exercises, which greatly facilitate the learning of the underlying processes of blockchain technology for all, from students to entrepreneurs.' Serguei Netessine, Dhirubhai Ambani Professor of Innovation and Entrepreneurship, The Wharton School, University of Pennsylvania

'Whether you want to start from scratch or deepen your blockchain knowledge about the latest developments, this book is an essential reference. Through clear explanations and practical code examples, the authors take you on a progressive journey to discover the technology foundations and build your own blockchain. From an operations perspective, you can learn the principles behind the distributed ledger technology relevant for transitioning towards blockchain-enabled supply chains. Reading this book, you'll get inspired, be able to assess the applicability of blockchain to supply chain operations, and learn from best practices recognized in real-world examples.' Ralf W. Seifert, Professor of Technology and Operations Management at EPFL and Professor of Operations Management at IMD 

Daniel Hellwig is a Principal at Kepler Cannon, a New York based strategic advisory firm. He is currently also active as a researcher at WHU - Otto Beisheim School of Management. Daniel completed his undergraduate studies at the Wharton School and holds a master's degree in Industrial Engineering from UC Berkeley. He looks back at professional experiences at Deutsche Bank, Merrill Lynch, and Deloitte.

Goran Karlic is Senior Technology Consultant at Kepler Cannon, a New York based strategic advisory firm. Goran is co-founder of multiple startups and has developed products in the fields of artificial intelligence, distributed systems, machine vision, industrial process control and DLT.

Arnd Huchzermeier is Chaired Professor in Production Management at WHU - Otto Beisheim School of Management, Vallendar, Germany. Arnd taught at the Booth Graduate School of Business of the University of Chicago after earning his PhD from The Wharton School of the University of Pennsylvania. He is, among others, author of books on Supply Chain Finance and Industrial Excellence. He regularly publishes in leading managerial and academic journals.  

Inhalt

Preface 6
Introduction to DLT: Build Your Own Blockchain 6
Acknowledgements 9
Contents 10
Blockchain Fundamentals 16
1 Blockchain Foundations 17
1.1 Introduction 17
1.1.1 Terminology 18
1.1.2 The First Use Case 18
1.1.3 Currencies: Traditional and Crypto 20
1.1.4 Ownership 21
1.2 Cryptocurrencies 23
1.2.1 Control Mechanisms 23
1.2.2 Cryptography 23
1.2.3 Cryptographic Hashing 23
1.2.4 Asymmetric Cryptography 24
1.2.5 Digital Signatures 25
1.3 Network Architecture Basics 25
1.4 The Blockchain 26
1.4.1 Operations 26
1.4.2 Blocks 26
1.5 Data Integrity 29
1.5.1 Ledger Propagation 29
1.5.2 Transaction Validation 29
1.5.3 Merkle Trees 31
1.6 Types of Blockchains 32
1.6.1 Public Blockchains 32
1.6.2 Private Blockchains 32
1.6.3 Consortium-Controlled Blockchains 33
1.6.4 Selection Framework 33
1.7 Exercise 34
1.7.1 Introduction 34
1.7.2 Environment Setup 34
1.7.3 Build Your Own Blockchain 35
References 41
2 Cryptocurrencies 42
2.1 Introduction 42
2.1.1 Overview 43
2.1.2 Crypto Properties 43
2.1.3 Transactions 44
2.1.4 Double Spending 45
2.2 Miners 46
2.2.1 Process Overview 46
2.2.2 Transaction Confirmation 47
2.2.3 Mining Process 48
2.2.4 The Nonce 49
2.3 Coins and Tokens 50
2.3.1 Introduction 50
2.3.2 Altcoins 51
2.3.3 Tokens 51
2.3.4 ERC-20 Standard 52
2.4 Market Makers/Exchanges 53
2.4.1 Introduction 53
2.4.2 Brokers 54
2.4.3 Traditional Exchanges 55
2.4.4 Decentralized Exchanges 55
2.4.5 Trading Platforms 55
2.4.6 Offline Exchanges 56
2.5 Wallets 56
2.5.1 Introduction 56
2.5.2 Hardware Wallets 56
2.5.3 Software Wallets 57
2.5.4 Exchange Wallets 57
2.6 Exercise 58
2.6.1 Introduction 58
2.6.2 Standard Transfer 58
References 64
3 Consensus Mechanisms 65
3.1 Introduction 65
3.1.1 Definition 65
3.1.2 Objectives 66
3.1.3 Variations 67
3.2 The CAP Theorem 67
3.2.1 The Trilemma 67
3.2.2 CAP Theorem and Blockchains 68
3.2.3 CAP Theorem in Practice 69
3.3 Byzantine Fault 71
3.3.1 Background 71
3.3.2 Byzantine Generals’ Problem 71
3.3.3 An Example 72
3.4 Common Consensus Protocols 73
3.4.1 Proof of Work (PoW) 74
3.4.2 Proof of Stake (PoS) 75
3.4.3 Proof of Capacity/Proof of Space 76
3.4.4 Delegated Proof of Stake (DPoS) 77
3.4.5 Proof of Authority (PoA) 78
3.4.6 Practical Byzantine Fault Tolerance (PBFT) 79
3.4.7 Proof of Elapsed Time (PoET) 80
3.4.8 Other Mechanisms 81
3.5 Exercise 81
3.5.1 Introduction 81
3.5.2 Set up PoA Genesis Block 82
3.5.3 Create a PoA Network 84
References 85
4 Smart Contracts 87
4.1 Introduction 87
4.2 Ethereum—An Alternative to Bitcoin 89
4.2.1 Introduction 89
4.2.2 Ethereum Versus Bitcoin Applications 89
4.2.3 Ethereum Approach 91
4.2.4 Gas 92
4.2.5 The Price of Gas 93
4.3 Solidity Programming Language 93
4.3.1 Syntax 94
4.3.2 Coin Toss Example 94
4.4 Oracles 95
4.4.1 Introduction 95
4.4.2 Smart Contract Integration 96
4.4.3 Oracles and Security 96
4.4.4 Types of Oracles 97
4.4.5 Oracle Contract Example 97
4.5 Decentralized Applications (dApps) 98
4.5.1 Introduction 98
4.5.2 dApp Example: The Decentralized Autonomous Organization (DAO) 99
4.6 Turing Completeness 100
4.6.1 Background 100
4.6.2 Turing Completeness and Ethereum 100
4.7 Legal Perspective 101
4.7.1 Smart Contract Interpretation 101
4.7.2 Open Questions 102
4.7.3 Conclusion 102
4.8 Exercise (“Piggy Bank”) 103
4.8.1 Introduction 103
4.8.2 Opcode 103
4.8.3 Bytecode 104
4.8.4 Application Binary Interface (ABI) 104
4.8.5 Piggy Bank Deployment 105
References 109
5 Privacy and Anonymity 110
5.1 Introduction 110
5.1.1 Anonymity 111
5.1.2 Unlinkability 111
5.1.3 Anonymity Versus Pseudonymity 111
5.1.4 Taint Analysis 113
5.2 De-anonymization 114
5.2.1 Introduction 114
5.2.2 Transaction Graph Analysis 114
5.2.3 Network-Layer De-anonymization 114
5.3 The Onion Router (TOR) Network 115
5.3.1 Background 115
5.3.2 TOR Approach 115
5.3.3 TOR Usage 116
5.3.4 Limitations 117
5.4 Mixing Models 117
5.5 Decentralized Mixing 118
5.5.1 Motivation 118
5.5.2 Coinjoin Model 118
5.5.3 Coinjoin Anonymity 119
5.6 Zero-Knowledge Proofs 120
5.6.1 Introduction 120
5.7 Privacy and Security Protocols 121
5.7.1 Introduction 121
5.8 Privacy Coins 122
5.8.1 Introduction 122
5.8.2 The Zero Currencies 123
5.8.3 Zerocoin 124
5.8.4 Zerocash 126
5.9 Exercise 127
5.9.1 Introduction 127
References 132
Cryptography Foundations 133
6 Blockchain Cryptography: Part 1 134
6.1 Introduction 134
6.1.1 Cryptography Fundamentals 134
6.1.2 Secrecy Prerequisites 135
6.1.3 Blockchain and Cryptography 135
6.2 Classic Ciphers 136
6.2.1 Substitution 136
6.2.2 Transposition 137
6.3 Modern Cryptographic Algorithms 138
6.3.1 Introduction 138
6.3.2 Vulnerabilities 140
6.4 Hashing 140
6.4.1 Introduction 140
6.4.2 Hash Collisions 141
6.4.3 Merkle-Damgård Construction 142
6.4.4 Length Extension Attack 142
6.5 Secure Hash Algorithm (SHA) 143
6.5.1 Introduction 143
6.5.2 Hash Example 144
6.6 Symmetric Encryption 145
6.6.1 Single Encryption Keys 145
6.6.2 The Hill Cipher 146
6.6.3 The Pohlig-Hellman Cipher 150
6.7 Exercise 153
6.7.1 Introduction 153
6.7.2 Message Prep 153
6.7.3 OpenSSL Setup 154
6.7.4 Message Encryption 154
6.7.5 Message Decryption 156
References 156
7 Blockchain Cryptography: Part 2 158
7.1 Asymmetric Key Schemes 158
7.1.1 Introduction 158
7.1.2 Illustrative Example 159
7.2 Diffie-Hellman-Merkle Key Agreement 160
7.2.1 Introduction 160
7.2.2 An Example 161
7.2.3 Limitations 163
7.3 Rivest, Shamir, and Adelman (RSA) 163
7.3.1 Introduction 163
7.3.2 Key Pairs 164
7.3.3 Intuition 166
7.3.4 An Example 167
7.4 Digital Signatures 168
7.4.1 Introduction 168
7.4.2 Motivation 168
7.4.3 Usage 169
7.4.4 Signatures 169
7.4.5 An Example 171
7.5 Quantum Resistance 172
7.5.1 Introduction 172
7.5.2 Mechanism 172
7.5.3 Shor’s Algorithm 173
7.5.4 Grover’s Algorithm 173
7.5.5 Imminence 174
7.5.6 Security Considerations 174
7.5.7 Quantum Resistance 174
7.6 Exercise 174
7.6.1 Introduction 174
7.6.2 Message Prep 175
7.6.3 Key Generation (RSA) 175
7.6.4 Digital Signatures (RSA) 177
7.6.5 Key Generation (Elliptic Curves) 177
7.6.6 Digital Signatures (Elliptic Curves) 178
References 179
Real-World Applications 180
8 Blockchain in Action: Real-World Applications 181
8.1 Introduction 181
8.2 Currencies 182
8.3 Cross-Border Transfers 183
8.4 Tokenization 184
8.5 Asset Tracking 185
8.6 Commodity Trading 186
8.7 Looking Ahead 187
8.7.1 Humble Beginnings 187
8.7.2 A Word of Caution 188
8.7.3 The Jury Is Still Out 189
References 191
Index 192

Produkt-Details

• Erscheint lt. Verlag: 2.5.2020
• Reihe/Serie: Management for Professionals
• Reihe/Serie: Management for Professionals
• Zusatzinfo: XVI, 187 p. 215 illus., 140 illus. in color.
• Sprache: englisch
• Themenwelt: Informatik ► Netzwerke ► Sicherheit / Firewall
• Themenwelt: Wirtschaft ► Allgemeines / Lexika
• Schlagworte: Consensus Algorithms • Cryptocurrency • decentralization • Distributed Ledger • DLT • Mining • Smart Contracts • Trustless systems
• ISBN-10: 3-030-40142-1 / 3030401421
• ISBN-13: 978-3-030-40142-9 / 9783030401429