Blockchain Technology ,Architecture and its Structure

Blockchain
Introduction
Mrs. K. Kasthuri., M.Sc., M.Phil., M.Tech.,
Assistant Professor of IT,
V.V.Vanniaperumal College for Women,
Virudhunagar.

 The shortcomings of current transaction systems
 During 2000’s financial crisis
Tracing Blockchain’s Origin

 The most successful among lot of efforts: Bitcoin
 Replace cash with numbers and codes
 Advantages
 Fast
 International
 Easy accounting
 Weighs nothing
 Cheap
 Problems to be solved
Digital Currency

 Perfect Copy
 Just like downloading attachment from email
 How to distinguish counterfeits
 Ownership Problem
 Double Spending
 Networks are noisy and transmission across networks is far from
instantaneous: delay
 A hacker can capitalize
 Fraudster Detection Problem
Problems of Digital Currency

 Centralized Banking: not robust
 Satoshi determined to find the centralized part of banks
 The ledger
 “What if I could turn a bank inside out? Instead of one central party
controlling the ledger, what if every user were recruited to maintain a
constantly updated copy?”
 The strength of the digital was perfect copies, so copy the ledger,
everywhere, instantly.
 Any ledgers with even one common not agreeing with the masses would
be discarded, leaving fraudsters powerless
 Replace cash with Ledger!
The Long Road to Bitcoin

Decentralization
• Replace cash with Ledger

 Decentralization: get rid of the Third Party
 Satoshi paired two main technologies
 Proof of Work: to solve the double spending problem
 Elliptic Curves: to solve unique access to the ledger
 Nothing was newer than 2001
1. 2001: SHA-256 finalized
2. 1999-present: Byzantine fault tolerance
3. 1999-present: P2P networks
4. 1998: Wei Dai, B-money
5. 1998: Nick Szabo, Bit Gold
6. 1997: HashCash
7. 1992-1993: Proof-of-work for spam
8. 1991: cryptographic timestamp
9. 1980: public key crypto algorithm
The decentralized ledger (Blockchain)

What is Blockchain Technology
 Bitcoin stores all its transactions onto a public
database called as Blockchain

4 Key Concepts of Blockchain
Source: IBM, A new disruption in financial services

Blockchain: Distributed Ledger Technology

 Revolutionary Technology
 Protocol
 TCP/IP, HTTP, Cloud Computation, Big Data, IoT, FinTech…
 Melanie Swan: Blockchain: Blueprint for A New Economy, Jan
2015
 Blockchain 1.0
○ Bitcoin
○ Programmable Money
 Blockchain 2.0
○ Ethereum
○ Smart Contract
 Blockchain 3.0…
○ Non-Financial Uses
Blockchain Architecture

 Decentralized System
 The Blockchain system follows a decentralized approach when compared to banks and financial
organizations which are controlled and governed by Central or Federal Authorities.
 Here, everyone who is involved with the system holds some power.
 Public Ledgers
 The ledger which holds the details of all transactions which happen on the Blockchain, is open and
completely accessible to everyone who is associated with the system.
 Even though the complete ledger is publicly accessible, the details of the people involved in the
transactions remains completely anonymous.
 Verification of Every Individual Transaction
 Every single transaction is verified by cross-checking the ledger and the validation signal of the
transaction is sent after a few minutes.
 Through the usage of several complex encryption and hashing algorithm, the issue of double
spending is eliminated.
 Low or No Transaction Fees
 These transaction fees are however relatively quite less when compared to the fees implied by
banks and other financial organizations.
 If a transaction needs to be completed on priority then an additional transaction fees can be added
by the user so as to have the transaction verified on priority.
Bitcoin System vs. Current Banking
System

 Time savings:
 Cost savings:
 Tighter security:
 Enhanced privacy:
 Improved auditability:
 Increased operational efficiency:
the key business benefits

 Distributed and sustainable:
 Secure, private, and indelible:
 Transparent and auditable:
 Consensus-based and transactional:
 Orchestrated and flexible:
Building trust with blockchain

Why It’s Called “Blockchain”

 Blockchain user
 Regulator
 Blockchain developer
 Blockchain network operator
 Traditional processing platforms
 Traditional data sources
 Certificate authority
Different Players in Implementation

 The Linux Foundation founded Hyperledger in 2015
 Hyperledger Fabric is a platform for distributed ledger
solutions in industrial level.
 A modular architecture - Delivers high degrees of
confidentiality, resiliency, flexibility and scalability.
 It is designed to support pluggable implementations of
different components, and accommodate the complexity and
intricacies that exist across the economic ecosystem.
 Breaks from some other blockchain systems is that it
is private and permissioned
Hyperledger Fabric

 Like other blockchain technologies, it has a ledger, uses
smart contracts, and is a system by which participants
manage their transactions.
 Ledger data can be stored in multiple formats, consensus
mechanisms can be switched in and out.
 Offers the ability to create channels, allowing a group of
participants to create a separate ledger of transactions.
 Hyperledger is based on blockchain but its not a crypto
currency.
 There is no mining, just order system do it.
Hyperledger Fabric - Cont.

 Hyperledger Fabric is enterprise grade distributed ledger
based on blockchain technologies that uses smart contracts
to enforce trust between parties.
 Hyperledger in general do not enforce any requirements
about the hardware, network infrastructures, additional
software around it, security models etc.
 No concept of computational power.
In Summary

 Permissioned membership
 Performance, scalability, and levels of trust
 Data on a need-to-know basis
 Rich queries over an immutable distributed ledger
 Modular architecture supporting plug-in components
 Protection of digital keys and sensitive data
Advantages of Hyperledger Fabric

 Fabric CA,
 Peer
 Ordering service
 Channel
 Chaincode
Hyperledger Components

The Hyperledger Fabric CA is a Certificate Authority (CA) for
Hyperledger Fabric.
It provides features such as:
 registration of identities, or connects to LDAP as the user
registry
 issuance of Enrollment Certificates (ECerts)
 certificate renewal and revocation
 consists of both a server and a client component.
Fabric CA

 Every single operation that is executed inside hyperledger
fabric must be cryptographically signed with this certificate.
 You can add attributes, roles
 Certificates are X.509 standards.
 You can remove the necessity of certificates if you don’t need
it.
 Chaincodes read this data and make business decisions.
CA cont.

 Peer is the place where the ledger and the blockchain data is
stored.
 You must have more than one peer in production.
 One peer may be part of many channels.
 Every single channel is inside the peer.
 It endorse any update of the ledger.
 You can create backup of the ledger from the peer
Peer

 Ordering service is actually the heart of consensus algorithm
and the heart of hyper ledger fabric.
 Main role is to provide the order of operations.
 before committing anything to ledger it must pass through the
ordering service.
 it is responsible for verification, security, policy verification
etc.
Ordering Service

 Channel is a private “subnet” of communication between two
or more specific network members.
 A channel is defined by members (organizations), anchor
peers per member, the shared ledger, chaincode
application(s) and the ordering service node(s).
 Each peer that joins a channel, has its own identity given by
a membership services provider (MSP).
Channel

 channels are completely isolated,
 they have different ledgers, different height of blocks,
policies, stories, rules.
 completely isolated instance of hyper ledger fabric.
 never exchange data.
 outside of a channel , one can’t even see that there is a
channel.
 you can make a policy who can see the data in the channel
and who can make an operation.
 every single party inside a channel must agree about other
Channel cont.

 Versioned: All elements of the configuration have an
associated version which is advanced with every
modification. Further, every committed configuration receives
a sequence number.
 Permissioned: Each element of the configuration has an
associated policy which governs whether or not modification
to that element is permitted. Anyone with a copy of the
previous configtx (and no additional info) may verify the
validity of a new config based on these policies.
 Hierarchical: A root configuration group contains sub-groups,
and each group of the hierarchy has associated values and
policies. These policies can take advantage of the hierarchy
Channel configuration properties

 A chaincode typically handles business logic agreed to by
members of the network, so it similar to a “smart contract”.
 All your business logic is inside the chaincode.
 Its written in Go. Implementation of java and javascript are on
the way.
 Chaincode me installed in every peer and channel.
 Policy must be provided.
Chaincode

 Hyperledger Composer is a set of collaboration tools for
building blockchain business networks that make it simple
and fast for business owners and developers to create smart
contracts and blockchain applications to solve business
problems
 Extensive
 Open development toolset and
 Framework to make developing Blockchain applications
easier.
Hyperledger Composer

Blockchain Technology ,Architecture and its Structure

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