Mastering Blockchain - Master the Theoretical and Technical Foundations of Blockchain Technology and Explore Future of Blockchain Technology by Bashir, Imran -- Read -- Imperial Library of Trantor

Index

Mastering Blockchain

Mastering Blockchain Credits About the Author About the Reviewer www.PacktPub.com

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Customer Feedback Preface

What this book covers What you need for this book Who this book is for Conventions Reader feedback Customer support

Downloading the example code Downloading the color images of this book Errata Piracy Questions

1. Blockchain 101

Distributed systems

CAP theorem Byzantine Generals problem Consensus

Consensus mechanisms Types of consensus mechanism

The history of blockchain

Electronic cash

The concept of electronic cash

Introduction to blockchain

Various technical definitions of blockchains Generic elements of a blockchain

Addresses Transaction Block Peer-to-peer network Scripting or programming language Virtual machine State machine Nodes Smart contracts

Features of a blockchain

Distributed consensus Transaction verification Platforms for smart contracts Transferring value between peers Generating cryptocurrency Smart property Provider of security Immutability Uniqueness Smart contracts

Applications of blockchain technology

How blockchains accumulate blocks

Tiers of blockchain technology

Blockchain 1.0 Blockchain 2.0 Blockchain 3.0 Generation X (Blockchain X)

Types of blockchain

Public blockchains Private blockchains Semi-private blockchains Sidechains Permissioned ledger Distributed ledger Shared ledger Fully private and proprietary blockchains Tokenized blockchains Tokenless blockchains Consensus in blockchain

Proof of Work Proof of Stake Delegated Proof of Stake Proof of Elapsed Time Deposit-based consensus Proof of importance Federated consensus or federated Byzantine consensus Reputation-based mechanisms Practical Byzantine Fault Tolerance

CAP theorem and blockchain Benefits and limitations of blockchain

Decentralization Transparency and trust Immutability High availability Highly secure Simplification of current paradigms Faster dealings Cost saving Challenges and limitations of blockchain technology

Summary

2. Decentralization

Decentralization using blockchain Methods of decentralization

Disintermediation Through competition

Routes to decentralization

How to decentralize

Examples

Blockchain and full ecosystem decentralization

Storage Communication Computation

Smart contract Decentralized organizations Decentralized autonomous organizations Decentralized autonomous corporations Decentralized autonomous societies Decentralized applications

Requirements of a decentralized application Operations of a DAPP

Examples

KYC-Chain OpenBazaar Lazooz

Platforms for decentralization

Ethereum Maidsafe Lisk

Summary

3. Cryptography and Technical Foundations

Introduction

Mathematics

Set Group Field A finite field Order Prime fields Ring A cyclic group An abelian group Modular arithmetic

Cryptography Confidentiality Integrity Authentication

Entity authentication Data origin authentication

Non-repudiation Accountability

Cryptographic primitives

Symmetric cryptography

Stream ciphers Block ciphers

Block encryption mode Keystream generation modes Message authentication modes Cryptographic hashes Electronic code book Cipher block chaining Counter mode

Data Encryption Standard (DES) Advanced Encryption Standard (AES)

AES steps

An OpenSSL example of how to encrypt and decrypt using AES

Asymmetric cryptography

Integer factorization Discrete logarithm Elliptic curves

Public and private keys

RSA

Encryption and decryption using RSA Elliptic curve cryptography (ECC)

Mathematics behind ECC Point addition Point doubling

Discrete logarithm problem

How to generate public and private key pairs

Private key Generate public key

How to encrypt and decrypt using RSA with OpenSSL

Encryption Decrypt

ECC using OpenSSL

ECC private and public key pair Private key Private key generation

Cryptographic primitives Hash functions

Compression of arbitrary messages into fixed length digest Easy to compute Pre-image resistance Second pre-image resistance Collision resistance Message Digest (MD) Secure Hash Algorithms (SHAs)

Design of Secure Hash Algorithms (SHA) SHA-256 Design of SHA3 (Keccak) OpenSSL example of hash functions Message Authentication codes (MACs) MACs using block ciphers HMACs (hash-based MACs)

Merkle trees Patricia trees Distributed hash tables (DHTs) Digital signatures

Sign then encrypt Encrypt then sign

Elliptic Curve Digital signature algorithm (ECDSA)

How to generate a digital signature ECDSA using OpenSSL Homomorphic encryption Signcryption Zero knowledge proofs Blind signatures Encoding schemes

Financial markets and trading

Trading Exchanges

Orders and order properties Order management and routing systems Components of a trade General attributes Economic Sales Counterparty

Trade life cycle Order anticipators Market manipulation

Summary

4. Bitcoin

Bitcoin

Bitcoin definition

Keys and addresses Public keys in bitcoin Private keys in bitcoin Bitcoin currency units Base58Check encoding Vanity addresses

Transactions

The transaction life cycle The transaction structure

The script language Commonly used Opcodes

Types of transaction

Coinbase transactions What is UTXO?

Transaction fee Contracts Transaction malleability Transaction pools Transaction verification

Blockchain

The structure of a block The structure of a block header The genesis block

Mining Task of miners Synching up with the network Proof of Work The mining algorithm The hashing rate Mining systems CPU GPU FPGA ASICs Mining pools

The bitcoin network Wallets

Wallet types

Non-deterministic wallets Deterministic wallets Hierarchical deterministic wallets Brain wallets Paper wallets Hardware wallets Online wallets Mobile wallets

Bitcoin payments

Bitcoin investment and buying and selling bitcoins Bitcoin installation

Setting up a bitcoin node Setting up the source code Setting up bitcoin.conf Starting up a node in testnet Starting up a node in regtest Starting up a node in live mainnet Experimenting with bitcoin-cli

Bitcoin programming and the command-line interface Bitcoin improvement proposals (BIPs)

Summary

5. Alternative Coins

Theoretical foundations

Alternatives to Proof of Work

Proof of Storage Proof of Stake

Proof of coinage Proof of deposit Proof of burn Proof of activity

Non-outsourceable puzzles

Difficulty adjustment and retargeting algorithms

Kimoto Gravity Well Dark Gravity Wave DigiShield MIDAS

Bitcoin limitations

Privacy and anonymity

Mixing protocols Third-party mixing protocols Inherent anonymity

Extended protocols on top of bitcoin

Colored coins Counterparty

Development of altcoins

Consensus algorithms Hashing algorithms Difficulty adjustment algorithms Inter-block time Block rewards Reward halving rate Block size and transaction size Interest rate Coin age Total supply of coins

Namecoin

Trading Namecoins Obtaining Namecoins Generating Namecoin records

Litecoin Primecoin

Trading Primecoin Mining guide

Zcash

Trading Zcash Mining guide

Address generation GPU mining

Downloading and compiling nheqminer

Summary

6. Smart Contracts

History Definition Ricardian contracts

Smart contract templates Oracles Smart Oracles Deploying smart contracts on a blockchain The DAO

Summary

7. Ethereum 101

Introduction

Ethereum clients and releases The Ethereum stack

Ethereum blockchain

Currency (ETH and ETC) Forks Gas The consensus mechanism The world state

The account state

Nonce Balance Storageroot Codehash

Transactions

Nonce gasPrice gasLimit To Value Signature Init Data

Contract creation transaction Message call transaction

Elements of the Ethereum blockchain

Ethereum virtual machine (EVM)

Execution environment

Machine state The iterator function Runtime byte code

Opcodes and their meaning

Arithmetic operations Logical operations Cryptographic operations Environmental information Block Information Stack, memory, storage and flow operations Push operations Duplication operations Exchange operations Logging operations System operations

Precompiled contracts

The elliptic curve public key recovery function The SHA-256 bit hash function The RIPEMD-160 bit hash function The identity function

Accounts

Types of accounts

Block

Block header

Parent hash Ommers hash Beneficiary State root Transactions root Receipts root Logs bloom Difficulty Number Gas limit Gas used Timestamp Extra data Mixhash Nonce

The genesis block Transaction receipts

The post-transaction state Gas used Set of logs The bloom filter

Transaction validation and execution

The transaction sub state

Suicide set Log series Refund balance

The block validation mechanism

Block finalization

Ommers validation Transaction validation Reward application State and nonce validation

Block difficulty

Ether

Gas Fee schedule

Messages

Calls

Mining

Ethash CPU mining GPU mining

CPU benchmarking GPU benchmarking

Mining rigs

Motherboard SSD hard drive GPU

Mining pools

Clients and wallets

Geth Eth Pyethapp Parity Light clients Installation

Eth installation Mist browser Geth The geth console Funding the account with bitcoin

Parity installation

Creating accounts using the parity command line

Trading and investment The yellow paper

Useful symbols

The Ethereum network

MainNet TestNet Private net(s) Supporting protocols

Whisper Swarm

Applications developed on Ethereum Scalability and security issues Summary

8. Ethereum Development

Setting up a development environment

Test Net (Ropsten) Setting up a Private Net

Network ID The genesis file Data directory

Flags and their meaning

Static nodes

Starting up the private network

Running Mist on Private Net Deploying contracts using Mist

Development tools and clients

Languages Compilers

Solc Integrated Development Environments (IDEs)

Browser solidity Remix Installation

Tools and libraries

Node.js version 7 Local Ethereum block explorer

EthereumJS

Contract development and deployment

Introducing solidity

Types

Value types

Boolean Integers Address Array value types (fixed size and dynamically sized byte arrays)

Literals

Integer literals String literals Hexadecimal literals

Enums Function types

Internal functions External functions

Reference types

Arrays Structs Data location

Mappings Global variables Control structures

Events Inheritance Libraries Functions Layout of a solidity source code file

Introducing Web3

POST requests The HTML and JavaScript frontend

Installing web3.js

Example

Development frameworks

Truffle

Installation Testing using truffle Build Another example Example project: Proof of Idea Permissioned distributed ledgers

Summary

9. Hyperledger

Projects

Fabric Sawtooth lake Iroha Blockchain explorer Fabric chaintool Fabric SDK Py Corda

Hyperledger as a protocol

Reference architecture Requirements

Modular approach Privacy and confidentiality Identity Auditability Interoperability Portability

Fabric Hyperledger Fabric

Fabric architecture

Membership services Blockchain services

Consensus manager Distributed ledger Peer to Peer protocol Ledger storage

Chaincode services Events APIs and CLIs

Components of the Fabric

Peers or nodes Applications on blockchain

Chaincode implementation Application model

Sawtooth lake

PoET Transaction families Consensus in Sawtooth Development environment

Corda

Architecture

State objects Transactions Consensus Flows

Components

Nodes Permissioning service

Network map service Notary service Oracle service Transactions Vaults CorDapp

Development environment

Summary

10. Alternative Blockchains

Blockchains

Kadena

Ripple Transactions

Payments related Order related Account and security related Application layer Transport layer Interledger layer Ledger layer

Stellar Rootstock

Drivechain

Quorum

Transaction manager Crypto Enclave QuorumChain Network manager

Tezos Storj Maidsafe BigChainDB Multichain Tendermint

Tendermint Core Tendermint Socket Protocol (TMSP)

Platforms

BlockApps

Installation Application development and deployment using BlockApps

Eris

Summary

11. Blockchain-Outside of Currencies

Internet of Things

Physical object layer Device layer Network layer Management layer Application layer IoT blockchain experiment

First node setup Raspberry Pi node setup Circuit

Government

Border control Voting Citizen identification (ID cards) Miscellaneous

Health Finance

Insurance Post trade settlement Financial crime prevention

Media Summary

12. Scalability and Other Challenges

Scalability

Block size increase Block interval reduction Invertible Bloom lookup tables Sharding State channels Private blockchain Proof of Stake

Sidechains Subchains Tree chains

Privacy

Indistinguishability obfuscation Homomorphic encryption Zero knowledge proofs State channels Secure multiparty computation Usage of hardware to provide confidentiality Coinjoin Confidential transactions MimbleWimble

Security

Smart contract security

Why3 formal verification Oyente tool

Summary

13. Current Landscape and Whats Next

Emerging trends

Application-specific blockchains (ASBCs) Enterprise-grade blockchains Private blockchains Start-ups Strong research interest Standardization Enhancements Real-world implementations Consortia Answers to challenges Convergence Education of blockchain technology Employment Crypto-economics Research in cryptography New programming languages Hardware research and development Research in formal methods and security Alternatives to blockchains Interoperability efforts Blockchain as a service Efforts to reduce electricity consumption

Improvement proposals

BIPs

BIP 152 BIP 151 BIP 150 BIP 147 BIP 146

EIPs

EIP 170 EIP 150 EIP 161 EIP 160 EIP 155

Other challenges Dark side Blockchain research

Smart contracts Centralization issues Limitations in cryptographic functions Consensus Algorithms Scalability Code Obfuscation

List of notable projects

Zcash on Ethereum CollCo Cello Qtum Bitcoin-NG Solidus Hawk Town-Crier SETLCoin TEEChan Falcon Bletchley Casper Metropolis

Miscellaneous Tools

Solidity extension for Microsoft Visual studio MetaMask Stratis Embark DAPPLE Meteor uPort INFURA

Convergence with other industries Future Summary

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