8  Blockchain

* Hashing is a method of applying a cryptographic hash function to data,

which calculates a relatively unique output (called a message digest, or just

digest) for an input of nearly any size (e.g., a file, text, or image).

Blockchain technology summary

• Shared Ledger

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⚬History of all transactions

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⚬Append only with immutable history

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⚬Distributed and replicated

• Cryptography

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⚬Integrity of shared ledger

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⚬Authenticity of transactions

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⚬Privacy of transactions

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⚬Identification of participants

• Consensus

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⚬Decentralised protocol

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⚬Transaction validation

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⚬Network Integrity

• Shared Contract

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⚬Embedded login within the ledger

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⚬Self-enforcing ‘smart contracts’

Types of blockchain (public/private/

consortium/hybrid)

There are four categories of blockchains that have emerged since Bitcoin

was launched as a successful use case for a public blockchain:

1. Public blockchain: They are fully decentralised, have no single owner-

ship, are highly censorship-resistant and have tokens associated with

them to incentivise/reward the participants in the network.

2. Private blockchain: They are also known as permissioned block-

chains. In these blockchains, participants need consent to join the

network, transactions are private and are only available to ecosystem

participants. They are more centralised.

3. Consortium blockchain: They are like private blockchains but are

governed by a group rather than a single entity. They can be treated as

a sub-category of private blockchain.

4. Hybrid blockchain: These chains combine features of a private and

public blockchain. This gives businesses significant flexibility to

choose what data can be made public and what data they want to

keep private (Figure 1.4).