book

Mastering Blockchain

by Imran Bashir

March 2017

Intermediate to advanced

540 pages

12h 13m

English

Packt Publishing

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What this book covers

Downloading the example codeDownloading the color images of this bookErrataPiracyQuestions
Distributed systemsCAP theoremByzantine Generals problemConsensusConsensus mechanismsTypes of consensus mechanism
Electronic cashThe concept of electronic cash
Various technical definitions of blockchainsGeneric elements of a blockchainAddressesTransactionBlockPeer-to-peer networkScripting or programming languageVirtual machineState machineNodesSmart contractsFeatures of a blockchainDistributed consensusTransaction verificationPlatforms for smart contractsTransferring value between peersGenerating cryptocurrencySmart propertyProvider of securityImmutabilityUniquenessSmart contractsApplications of blockchain technologyHow blockchains accumulate blocksTiers of blockchain technologyBlockchain 1.0Blockchain 2.0Blockchain 3.0Generation X (Blockchain X)
Public blockchainsPrivate blockchainsSemi-private blockchainsSidechainsPermissioned ledgerDistributed ledgerShared ledgerFully private and proprietary blockchainsTokenized blockchainsTokenless blockchainsConsensus in blockchainProof of WorkProof of StakeDelegated Proof of StakeProof of Elapsed TimeDeposit-based consensusProof of importanceFederated consensus or federated Byzantine consensusReputation-based mechanismsPractical Byzantine Fault Tolerance
DecentralizationTransparency and trustImmutabilityHigh availabilityHighly secureSimplification of current paradigmsFaster dealingsCost savingChallenges and limitations of blockchain technology
Decentralization using blockchain
DisintermediationThrough competition
How to decentralizeExamples
StorageCommunicationComputation
Requirements of a decentralized applicationOperations of a DAPPExamplesKYC-ChainOpenBazaarLazooz
EthereumMaidsafeLisk
IntroductionMathematicsSetGroupFieldA finite fieldOrderPrime fieldsRingA cyclic groupAn abelian groupModular arithmeticCryptographyConfidentialityIntegrityAuthenticationEntity authenticationData origin authenticationNon-repudiationAccountability
Symmetric cryptographyStream ciphersBlock ciphersBlock encryption modeKeystream generation modesMessage authentication modesCryptographic hashesElectronic code bookCipher block chainingCounter modeData Encryption Standard (DES)Advanced Encryption Standard (AES)AES stepsAn OpenSSL example of how to encrypt and decrypt using AES
Integer factorizationDiscrete logarithmElliptic curves
RSAEncryption and decryption using RSAElliptic curve cryptography (ECC)Mathematics behind ECCPoint additionPoint doublingDiscrete logarithm problemHow to generate public and private key pairsPrivate keyGenerate public keyHow to encrypt and decrypt using RSA with OpenSSLEncryptionDecryptECC using OpenSSLECC private and public key pairPrivate keyPrivate key generationCryptographic primitivesHash functionsCompression of arbitrary messages into fixed length digestEasy to computePre-image resistanceSecond pre-image resistanceCollision resistanceMessage Digest (MD)Secure Hash Algorithms (SHAs)Design of Secure Hash Algorithms (SHA)SHA-256Design of SHA3 (Keccak)OpenSSL example of hash functionsMessage Authentication codes (MACs)MACs using block ciphersHMACs (hash-based MACs)Merkle treesPatricia treesDistributed hash tables (DHTs)Digital signaturesSign then encryptEncrypt then signElliptic Curve Digital signature algorithm (ECDSA)How to generate a digital signatureECDSA using OpenSSLHomomorphic encryptionSigncryptionZero knowledge proofsBlind signaturesEncoding schemes
TradingExchangesOrders and order propertiesOrder management and routing systemsComponents of a tradeGeneral attributesEconomicSalesCounterpartyTrade life cycleOrder anticipatorsMarket manipulation
BitcoinBitcoin definitionKeys and addressesPublic keys in bitcoinPrivate keys in bitcoinBitcoin currency unitsBase58Check encodingVanity addresses
The transaction life cycleThe transaction structureThe script languageCommonly used OpcodesTypes of transactionCoinbase transactionsWhat is UTXO?Transaction feeContractsTransaction malleabilityTransaction poolsTransaction verification
The structure of a blockThe structure of a block headerThe genesis blockMiningTask of minersSynching up with the networkProof of WorkThe mining algorithmThe hashing rateMining systemsCPUGPUFPGAASICsMining poolsThe bitcoin networkWalletsWallet typesNon-deterministic walletsDeterministic walletsHierarchical deterministic walletsBrain walletsPaper walletsHardware walletsOnline walletsMobile wallets
Bitcoin investment and buying and selling bitcoinsBitcoin installationSetting up a bitcoin nodeSetting up the source codeSetting up bitcoin.confStarting up a node in testnetStarting up a node in regtestStarting up a node in live mainnetExperimenting with bitcoin-cliBitcoin programming and the command-line interfaceBitcoin improvement proposals (BIPs)
Theoretical foundationsAlternatives to Proof of WorkProof of StorageProof of StakeProof of coinageProof of depositProof of burnProof of activityNon-outsourceable puzzlesDifficulty adjustment and retargeting algorithmsKimoto Gravity WellDark Gravity WaveDigiShieldMIDAS
Privacy and anonymityMixing protocolsThird-party mixing protocolsInherent anonymityExtended protocols on top of bitcoinColored coinsCounterpartyDevelopment of altcoinsConsensus algorithmsHashing algorithmsDifficulty adjustment algorithmsInter-block timeBlock rewardsReward halving rateBlock size and transaction sizeInterest rateCoin ageTotal supply of coins
Trading NamecoinsObtaining NamecoinsGenerating Namecoin records
Trading PrimecoinMining guide
Trading ZcashMining guideAddress generationGPU miningDownloading and compiling nheqminer
History
Smart contract templatesOraclesSmart OraclesDeploying smart contracts on a blockchainThe DAO
IntroductionEthereum clients and releasesThe Ethereum stack
Currency (ETH and ETC)ForksGasThe consensus mechanismThe world stateThe account stateNonceBalanceStoragerootCodehashTransactionsNoncegasPricegasLimitToValueSignatureInitDataContract creation transactionMessage call transaction
Ethereum virtual machine (EVM)Execution environmentMachine stateThe iterator functionRuntime byte codeOpcodes and their meaningArithmetic operationsLogical operationsCryptographic operationsEnvironmental informationBlock InformationStack, memory, storage and flow operationsPush operationsDuplication operationsExchange operationsLogging operationsSystem operations
The elliptic curve public key recovery functionThe SHA-256 bit hash functionThe RIPEMD-160 bit hash functionThe identity function
Types of accounts
Block headerParent hashOmmers hashBeneficiaryState rootTransactions rootReceipts rootLogs bloomDifficultyNumberGas limitGas usedTimestampExtra dataMixhashNonceThe genesis blockTransaction receiptsThe post-transaction stateGas usedSet of logsThe bloom filterTransaction validation and executionThe transaction sub stateSuicide setLog seriesRefund balanceThe block validation mechanismBlock finalizationOmmers validationTransaction validationReward applicationState and nonce validationBlock difficulty
GasFee schedule
Calls
EthashCPU miningGPU miningCPU benchmarkingGPU benchmarkingMining rigsMotherboardSSD hard driveGPUMining pools
GethEthPyethappParityLight clientsInstallationEth installationMist browserGethThe geth consoleFunding the account with bitcoinParity installationCreating accounts using the parity command line
Useful symbols
MainNetTestNetPrivate net(s)Supporting protocolsWhisperSwarm
Setting up a development environmentTest Net (Ropsten)Setting up a Private NetNetwork IDThe genesis fileData directoryFlags and their meaningStatic nodesStarting up the private networkRunning Mist on Private NetDeploying contracts using Mist
LanguagesCompilersSolcIntegrated Development Environments (IDEs)Browser solidityRemixInstallationTools and librariesNode.js version 7Local Ethereum block explorerEthereumJSContract development and deployment
TypesValue typesBooleanIntegersAddressArray value types (fixed size and dynamically sized byte arrays)LiteralsInteger literalsString literalsHexadecimal literalsEnumsFunction typesInternal functionsExternal functionsReference typesArraysStructsData locationMappingsGlobal variablesControl structuresEventsInheritanceLibrariesFunctionsLayout of a solidity source code file
POST requestsThe HTML and JavaScript frontendInstalling web3.jsExampleDevelopment frameworksTruffleInstallationTesting using truffleBuildAnother exampleExample project: Proof of IdeaPermissioned distributed ledgers
ProjectsFabricSawtooth lakeIrohaBlockchain explorerFabric chaintoolFabric SDK PyCorda
Reference architectureRequirementsModular approachPrivacy and confidentialityIdentityAuditabilityInteroperabilityPortability
Fabric architectureMembership servicesBlockchain servicesConsensus managerDistributed ledgerPeer to Peer protocolLedger storageChaincode servicesEventsAPIs and CLIsComponents of the FabricPeers or nodesApplications on blockchainChaincode implementationApplication model
PoETTransaction familiesConsensus in SawtoothDevelopment environment
ArchitectureState objectsTransactionsConsensusFlowsComponentsNodesPermissioning serviceNetwork map serviceNotary serviceOracle serviceTransactionsVaultsCorDappDevelopment environment
BlockchainsKadenaRippleTransactionsPayments relatedOrder relatedAccount and security relatedApplication layerTransport layerInterledger layerLedger layerStellarRootstockDrivechainQuorumTransaction managerCrypto EnclaveQuorumChainNetwork managerTezosStorjMaidsafeBigChainDBMultichainTendermintTendermint CoreTendermint Socket Protocol (TMSP)
BlockAppsInstallationApplication development and deployment using BlockAppsEris
Internet of ThingsPhysical object layerDevice layerNetwork layerManagement layerApplication layerIoT blockchain experimentFirst node setupRaspberry Pi node setupCircuit
Border controlVotingCitizen identification (ID cards)Miscellaneous
InsurancePost trade settlementFinancial crime prevention
ScalabilityBlock size increaseBlock interval reductionInvertible Bloom lookup tablesShardingState channelsPrivate blockchainProof of StakeSidechainsSubchainsTree chains
Indistinguishability obfuscationHomomorphic encryptionZero knowledge proofsState channelsSecure multiparty computationUsage of hardware to provide confidentialityCoinjoinConfidential transactionsMimbleWimble
Smart contract securityWhy3 formal verificationOyente tool
Emerging trendsApplication-specific blockchains (ASBCs)Enterprise-grade blockchainsPrivate blockchainsStart-upsStrong research interestStandardizationEnhancementsReal-world implementationsConsortiaAnswers to challengesConvergenceEducation of blockchain technologyEmploymentCrypto-economicsResearch in cryptographyNew programming languagesHardware research and developmentResearch in formal methods and securityAlternatives to blockchainsInteroperability effortsBlockchain as a serviceEfforts to reduce electricity consumption
BIPsBIP 152BIP 151BIP 150BIP 147BIP 146EIPsEIP 170EIP 150EIP 161EIP 160EIP 155
Smart contractsCentralization issuesLimitations in cryptographic functionsConsensus AlgorithmsScalabilityCode Obfuscation
Zcash on EthereumCollCoCelloQtumBitcoin-NGSolidusHawkTown-CrierSETLCoinTEEChanFalconBletchleyCasperMetropolis
Solidity extension for Microsoft Visual studioMetaMaskStratisEmbarkDAPPLEMeteoruPortINFURA

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Other challenges

Apart from security and privacy, discussed in the previous chapter, there are several other hurdles that should be addressed before mainstream adoption of blockchains can be realized. These include regulation, government control, immature technology, integration with existing systems, and implementation costs.

Regulation is considered one of the biggest challenges that need to be addressed. The core issue is that blockchains and especially cryptocurrencies are not recognized as a legal currency by any government. Even though, in some cases, it has been classified as money in the US and Germany, it is still far from being accepted as a normal currency. Moreover, blockchains in their current state are not recognized as a platform ...