1 Introduction

Dating back to Babylonian era, the ledger appears to be a bedrock of civilization as the exchange of value always required two unknown people to trust each other’s claims. Even today, we need a common system, which can provide order to the society, keep track of our transactions, establish public trust in it, and maintain it forever.

A blockchain is fundamentally a digital ledger that carries a list of transactions, that could, in principle, represent almost anything – money, digital stocks, cryptocurrencies, or any other asset. Blockchain can follow instructions to buy or sell these assets and implement inclusive set of terms and conditions through so-called smart contracts.

Blockchain differs from a simple ledger in that all transactions are stored in multiple copies on independent computers, individually within a decentralized network, rather than managed by a centralized institution, such as a bank or government agency. Once a consensus is reached, all computers on the network update their copies of the ledger simultaneously. If a node attempts to retroactively add or subtract an entry without consensus, the rest of the network automatically invalidates the entry.

Unlike a traditional ledger, it is governed by complex mathematical algorithms and impregnable cryptography that adds a layer of integrity to the ledger, what Ian Grigg (2005) referred to as triple-entry accounting – one entry on the debit side, another on the credit side, and a third on an immutable, ...

Get Blockchain for Real World Applications now with the O’Reilly learning platform.

O’Reilly members experience books, live events, courses curated by job role, and more from O’Reilly and nearly 200 top publishers.