With the advent of Bitcoin in the last decade and the development of the Blockchain technology, many studies have been done in applying this technology in order to solve different challenges. As a result of these studies, a number of frameworks have been developed for different purposes.
Among the most important features of Blockchain that have made it suitable for the development of practical frameworks with different practices, are the following:
The lack of need for reciprocal trust between uses: different frameworks of Blockchain are designed in a way that there is no need for reciprocal trust among users, and each side has trust in the mechanism of the Blockchain.
Preserving integrity: due to the use of hash algorithms and the chaining mechanism of data blocks, the tamper-proof feature of stored information on the infrastructure of the Blockchain could be investigated and guaranteed.
Transparency: Blockchain is not stored centrally, and all the members of the network will have a copy of it. Easy access to the information stream in this infrastructure will be accompanied by transparency. While in the centralized storing mechanisms, there is always hesitation about its central authority.
Preserving anonymity: in the infrastructure of Blockchain, each user is identified with his own address. This address is achieved by applying the hash algorithm on the public key of the user. On the other hand, there is no mechanism that would keep track of this correspondence between the identity of users and the addresses. Also, by creating a couple of public and private keys, each user can create different addresses for himself.
The system is distributed, not centralized: Blockchain-based infrastructures do not need central management. As such, there will not be related challenges. In this infrastructure, anybody can enjoy the services or offer services. Also, the different parts of the network interact independent from each other, and if one part is disabled, the system will continue its work.
Perhaps it can be said that the most important and the most preliminary Blockchain framework is the financial payment and value transfer framework. Cryptocurrency is a concept offered on the infrastructure of Blockchain and is used as a tool for trading. Among the most prevalent cryptocurrencies are Bitcoin, Ethereum, and Litecoin. Currently, different centers all across the world are offering services in order to exchange common national currencies for cryptocurrencies. Some cryptocurrencies like Tether have been defined equivalent to a stable amount of common national currencies like the U.S. dollar, which are technically called Stablecoin. Each Tether is equal to one U.S. dollar. At the same time, many cryptocurrencies like Bitcoin do not have a stable value with respect to national currencies and are turbulent given supply and demand. These turbulences have led to the entrance of investors in the field of buying and selling cryptocurrencies. Blockchain-based payment frameworks have challenged the financial mechanisms of banks and financial institutes from the perspective of trust and transparency. This has led to the operation of reputable financial institutes on an international level like SWIFT, JPMorgan, and VISA in the field of Blockchain in order to gain its benefits.
The smart contract is one of the most important offered practices of Blockchain. In general, it can be said that any smart contract is a function to execute a series of planned orders that are tamper-proof. This function will only be executed when the occurrence of a certain event or a series of events is authenticated. The most common feature of this framework is transferring a specific amount of digital tokens to defined address (addresses) in case of a certain situation. Smart contracts on the infrastructure of Blockchain are compatible with the general concept of contract and offer a conflict-free mechanism for the parties of the contract. In today’s world, it is always possible to infringe upon a contract, and incompliance of the sides of the contract is also ever-present.
On the other hand, legal investigation of such matters requires time and money, while in smart contracts, there are no such problems. Among the Blockchain networks that have implemented successful frameworks for smart contracts are Bitcoin, Ethereum, and Ripple. One of the challenges of implementing smart contracts is implementing a reliable mechanism for correct identification of necessary events in order for the contract to be executed.
Today, one of the hot fields in the domain of IT is the Internet of Things (IoT). IoT is connecting the sensors and objects of everyday life of man to the network of the internet, which will revolutionize industry, commerce, and the everyday life of man. Currently, different studies are being pursued in this field, and different businesses are offering their services and products. The features specified at the beginning of this article have turned Blockchain into one of the efficient solutions to implement IoT. One of the main challenges in IoT is the creation of a great volume of data whose privacy and integrity is of utmost importance.
On the other hand, the centralized keeping of such data will be accompanied by different challenges. Many of the commerce models in the IoT businesses need a reliable mechanism for financial payments, which will be easily provided in the IoT by implementing Blockchain. IoTA, IBM Watson IoT projects are among the prominent frameworks in the field of merging Blockchain and IoT. Of course, the IoTA project does not use Blockchain to store data. By implementing Tangle, this project has created a different mechanism of Blockchain in order to create a distributed ledger technology (DLT) that covers all the features proposed at the beginning of this article.
Due to offering a mechanism that could prevent tampering, deleting, and adding fake information, Blockchain has also come under attention as an infrastructure for storing data or a series of events. Among the frameworks that are implemented for this purpose are the Kodak company Blockchain that is used for storing copyright and different Hyperledgers used in the supply chain.
[Medium] “Blockchain Business Models for Autonomous IoT Sensor Devices”, Philipp Sandner, Apr 16, 2019
[IBM] Information from the official website
[Hyperledger] Information from the official website
[Coindesk] “Kodak Launches a Blockchain-Enabled Document Management System”, Daniel Kuhn, Jun 7, 2019
Dr. Pooyan Ghamari