Blockchain for Real World Applications

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, ...