Abstract

Block-chain is relatively new; therefore, a representative research sample is presented that spans over the last couple of years from the earlier literature addressing the field. The different usage types of Block-chain, as well as the digital ledger methods, applications, challenges privacy, and security issues, are examined. The technology constitutes two distinct components including block and transaction. Block refers to the collection of data, transaction recording, as well as other related details such as the creation of timestamp, correct sequence, et cetera. Blockchain which is the digital technology fundamental for crypto-currency has managed to bring forth a novel revolution through the provision of a mechanism that can be used for peer-to-peer transactions (P2P). The blockchain is a globally accepted ledger that is capable of achieving numerous new applications beyond transaction verification. Bitcoin that is progressively gaining awareness around the world is a vital example of Blockchain in practice. The block-chain technology is still at the stage of building up and is expected to be full-blown in the next few years.

Introduction

The predominant goal of this proposal is to outline the literature on the functionality of Block-chain and other techniques of the digital ledger in several different spheres of influence beyond its use to crypto-currency and to come up with an appropriate conclusion. The technology of block-chain is relatively new; therefore, a representative research sample is presented that spans over the last couple of years from the earlier literature addressing the field. The different usage types of Block-chain, as well as the digital ledger methods, applications, challenges privacy, and security issues, are examined. However, the main focus of this proposal is to determine the most auspicious for future application of Block-chain beyond crypto-currency.

Block-chain is the technology that facilitates the system of Bitcoin crypto-currency, which is also regarded to be important in the formation of the backbone that guarantees privacy and security of several applications in different areas such as the eco-system of the Internet of Things. The block-chain technology has also been successfully applied in the industrial and the educational sectors (Pilkington, 2016). A Proof-of-Work, which is a mathematical challenge, guarantees the security of the chain-block by maintaining the transactions of the digital ledger that are not alterable in any way. Also, block-chain employs utilize a public key that is changeable and records the identity all the users while maintaining their privacy. The adaptation of block-chain technology has also been successfully implemented in different non-monetary systems including decentralized message, online voting, clouds distribution and storage systems, healthcare, proof-of-location (Chatterjee, & Chatterjee, 2017). Several research projects and articles are reviewed to establish the implementation if block-chain for identity and security enhancement, related challenges as well as the appropriate solutions for block-chain based security structures. The area of knowledge described in the research includes the digital ledger realm, especially the block-chain and crypto-currency.

Fundamentals of Block-chain Technology

This section offers a brief description of the fundamental aspects of the block-chain technology. The technology constitutes two distinct components including block and transaction. Block refers to the collection of data, transaction recording, as well as other related details such as the creation of timestamp, correct sequence, et cetera. On the other hand, the transaction is the triggered actions by the participants in the block-chain.

Block-chain can be either private or public, depending on its usability scope. When a block-chain is made public, it allows all the users write and read permissions as is with the access of Bitcoin. However, other types of public block-chains also offer single permission, which is either to write or read depending on the type of participants. On the other hand, access is only limited to the trusted few in private block-chain. This is done with the intentions of enhancing security and to conceal the participants’ personal details. The private block-chain is mostly used in healthcare facilities and other governmental institutions where privacy is a priority.

The public implementation if the block-chain technology makes the primary benefit of the system. The ability of every participant to make entries or updates or evaluate the transaction records creates accuracy and allows verifications and authorization of a transaction by all the participants. In most cases, the data remains unchanged, and in case of alteration, the changes are verifiable by all participants. However, the block-chain data are encrypted using a unique key and can only be interpreted by experts.

In addition, the decentralized nature of the block-chain technology is also a significant advantage of the system. This implies that data, associated blocks, or transactions are not stored in any single device, but are preferably distributed throughout the network among the participants supporting the block-chain (Crosby et al. 2016). Also, no single authority is responsible for authorization of transactions, neither are there specified rules that guide the operations, apart from the participant’s consensus. Last but not least, the eco-system of the block-chain, as well as the overall security, is also an added advantage of the system. Since the earlier blocks are already public and distributed, they can never be changed, and only the new blocks can be appended.

The block-chain technology encourages transparency since all the transactions must be approved by all the participants within a given block-chain ecosystem. The participants are required to use a given algorithm to verify and validate such transactions. Each block-chain ecosystem has its definition of what is considered to be valid for a trade.

Figure 1: Blockchain Technology Concept (Pilkington, 2016)

Application of Block-chain Beyond Crypto-currency

Even though the internet is known for its greatness in aiding all spheres of contemporary digital lives, it is immensely flawed in some ways including inadequate or lack of privacy and security. These flaws have been majorly experienced in the fields of e-commerce as well as Fintech. Blockchain which is the digital technology fundamental for crypto-currency has managed to bring forth a novel revolution through the provision of a mechanism that can be used for peer-to-peer transactions (P2P). This mechanism has been enabled to work without the intervention of any intermediaries like commercial banks (Pilkington, 2016). Blockchain can validate all relevant transactions and also safeguard stable and permanent records of the information; while ascertaining that all the users’ credentials and identification data are kept incognito.

Therefore, the technology ensures that all the personal data of the users are impounded while the system substantiates all the requested transactions. This function is further accomplished through reconciliation of mass collaborations through the accumulation of all sales in the computer coded digital ledger. Therefore, application of Blockchain as well as other similarly functional crypto-currency tools does not require an intermediate or users trusting each other. The trust is thereby patented in the decentralized network of the Blockchain system. Blockchain can hence be referred to as the “Trust Machine” of the ideal paradigm (Pilkington, 2016).

Bitcoin is an outstanding example of Blockchain in practice. Blockchain, being a new revolution in the computing world, is further capable of allowing limitless applications.These applications are including storage as well as verification of legal documentation such as certificates and title deeds, IoT, cloud, healthcare data and many more (Crosby et al. 2016) asserts that Blockchain is a globally accepted ledger that is capable of achieving numerous new applications beyond transaction verification. For instance, the technology is immensely applied in smart deeds, governmental services, autonomous and decentralized organizations.

Also, it is applicable in the cloud environment (Ølnes, Ubacht, & Janssen, 2017). In this perspective, the historical background in the generation of the cloud data objects, as well as its successive functionality performed thereupon, are often recorded through the data structure system known as the ‘data provenance’ which is an essential kind of the cloud metadata. Therefore, this perspective is essential in providing total security to the significant data provenance to ensure data privacy and confidentiality, accountability, viability, and forensics. Ølnes, Ubacht, and Janssen, (2017) describe the architecture of a Blockchain-based cloud data provenance, and how users trust it. ‘ProvChain’ is highly decentralized and meets the requirements of many users, thus promoting the trust. Consequently, adoption of Blockchain in a data cloud environment is vital in providing reliable protection against data records that may be altered, therefore promoting enhanced transparency, and also, further accountability of data. Furthermore, trustworthiness, accountability privacy, and provenance data value are significantly increased.

Also in the environment of IoT, most communications are achieved through machine-to-machine interactions (M2M). This aspect establishes trust issues among the communicating machines. The challenge has not been tackled to completion by the IoT technology. Nonetheless, Blockchain can be used as a catalyst in this situation through the promotion of advanced security, privacy, reliability as well as scalability of the systems (Crosby et al. 2016). This is accomplished through the deployment of the Blockchain technology with a command to track man devices that may be connected to the IoT environment, and also utilized to enhance and coordinate processing transactions. Application of the Blockchain in the ecosystem of IoT is also bound to heighten data reliability through axing the failure point referred to as the SPF (Single Point of Failure). The integrated cryptographic algorithms useful in block data encryption and technique hashing are significant in providing enhanced security. On the other hand, this process may be liable to increased processing power demands, which often lack in the IoT devices. This limitation requires further detailed research.

According to Wright, and De Filippi, (2015) the application of the Blockchain technology is bound to promote a total overhaul of the digital economy. Ascertaining and maintenance of trust is always the primary concern of this technological application. Further, Blockchain has its applicability in gathering chronological as well as sequence data related to transactions. This applicability is often evident in the vast networked systems used for time-stamping. For instance, NASDAQ implements the ‘Linq Blockchain’ in recording the private transactions of securities. Also, the U.S based DTCC works together with Axoni to perform financial settlement services like swaps and post-trade matters. Furthermore, regulators have also shown interest in the ability of Blockchain to promote privacy, traceability as well as real-time transactions monitoring.

Future of Block-chain

According to Wright, and De Filippi, (2015), the block-chain technology is still at the stage of building up and is expected to be full-blown in the next five years. Since the world is widely adopting the technology as well as the increased applications beyond cryptocurrency, the classification and the use of block-chain is projected to reach maturity in five to ten years. The technology has a better potential to empower the economies and citizens, especially in developing countries. What needs to be done is the creation of awareness and encouraging the adaptation of e-governance to facilitate easy management and transfer of assets and other precious commodities such as silver, diamond, gold, and financial inclusion.

Conclusion

The use of block-chain technology has expanded beyond its application for Bitcoin transaction and generations. The characteristics if its privacy, security, inherent data derivation,

Traceability, as well as time-stamping, has allowed its adoption extensively beyond the initial area of applications. The block-chain technology is expected to take over the financial system and other applications in the near future.

References

Pilkington, M. (2016). 11 Blockchain technology: principles and applications. Research handbook on digital transformations, 225.

Wright, A., & De Filippi, P. (2015). Decentralized blockchain technology and the rise of lex cryptocurrecney.

Crosby, M., Pattanayak, P., Verma, S., & Kalyanaraman, V. (2016). Blockchain technology: Beyond bitcoin. Applied Innovation, 2, 6-10.

Ølnes, S., Ubacht, J., & Janssen, M. (2017). Blockchain in government: Benefits and implications of distributed ledger technology for information sharing.

Chatterjee, R., & Chatterjee, R. (2017, October). An Overview of the Emerging Technology: Blockchain. In Computational Intelligence and Networks (CINE), 2017 3rd International Conference on (pp. 126-127). IEEE.