Abstract
Due to the fact that modern computers have “perfect memory” and can process a huge number of transactions through a computer network very quickly, the idea of a decentralized currency system is not a new thing and it has long been a dream of advocates of the concept of anonymous digital money. Satoshi Nakamoto has come up with a genius idea to create a system that is a digital abstraction book of the balance and make that system public for all practical transactions related to accounts and transactions, which, when simplified, are reduced to mere addition and subtraction operations. He used the digital media feature to make perfect own copies, so he distributed this copy of the balance book to every computer in the network (decentralized system) and obtained a unique (structurally unchangeable) and global (public) book of balance. Thus, a revolutionary blockchain technology was created, which initially enabled and supported the functioning of the first digital crypto currency - bitcoin. Blockchain technology is an amalgam of several different and equally revolutionary technological achievements in the field of cryptography and computer networks. The aim of this paper is, using Bitcoin as example, to briefly explain the functioning of this technology and its suitability for use in many other areas of human activity, especially those that have a problem of distrust and the possibility of fraud.
This is a preview of subscription content, log in via an institution to check access.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
Notes
- 1.
Open source software with license for modification, reconstruction and enhancement.
- 2.
The QR Code (Quick Response Code) is a type of two-dimensional barcode originally designed for the automotive industry in Japan. Barcode is an optical tag that the machine can read and contains information about the product to which it is attached [10].
- 3.
Hash function is any function that can convert digital input data of arbitrary size into a set of digital data of a fixed size (hash value). A quality hash function is that one which has small differences in input data result in very large differences in output data. Hashing is the process of getting hash values [14, p. 10].
- 4.
The feature of the sha256 hash (Secure Hash Standard) function is that regardless of the size of the input, one letter or whole book, always as a result, it gives a 256-bit number. This 256-bit number originally found in the binary zeros and ones format is shown in its hexadecimal version, which is 64 hex characters (24 = 16; 64 * 4 = 256). The characteristic of a good hashing function, is its collision resistance (collision is getting the same results for different input values).
References
Nakamoto, S.: Bitcoin: a peer-to-peer electronic cash system, [bitcion.org] (2008). https://bitcoin.org/bitcoin.pdf. Accessed 13 Jan 2019
Marr, B.: A very brief history of blockchain technology everyone should read. Forbes Magazine [Forbes.com] (2018). https://www.forbes.com/sites/bernardmarr/2018/02/16/a-very-brief-history-of-blockchain-technology-everyone-should-read/#682f67b97bc4. Accessed 20 Jan 2019
Financial Crimes Enforcement Network: Statement of Jennifer Shasky Calvery, Director, Financial Crimes Enforcement Network, US Department of the Treasury, 19 November 2013. www.fincen.gov/news/testimony/statement-jennifer-shasky-calvery-director-financial-crimes-enforcement-network. Accessed 22 Jan 2019
European Central Bank: Virtual Currency Schemes, Frankfurt (2012). https://www.ecb.europa.eu/pub/pdf/other/virtualcurrencyschemes201210en.pdf. Accessed 26 Jan 2019
CNBC: Bitcoin can be an asset but not a currency, says China central bank adviser CNBC, 06 July 2017. https://www.cnbc.com/2017/07/06/bitcoin-can-be-an-asset-but-not-a-currency-says-china-central-bank-adviser.html. Accessed 26 Jan 2019
Clinch, M.: Bitcoin recognized by Germany as ‘private money’, CNBC, 19 August 2013. https://www.cnbc.com/id/100971898. Accessed 22 Jan 2019
Pohjanpalo, K.: Bitcoin Judged Commodity in Finland After Failing Money Test, Bloomberg, 20 January 2014. https://www.ecb.europa.eu/pub/pdf/other/virtualcurrencyschemes201210en.pdf. Accessed 27 Jan 2019
Bitcoin.org: What is Bitcoin? (2014). https://bitcoin.org/en/faq#general. Accessed 17 Jan 2019
Satoshi Nakamoto Institute: Bitcoin Talk Re: Slashdot Submission for 1.0 (2010). https://satoshi.nakamotoinstitute.org/posts/bitcointalk/167/. Accessed 08 Jan 2019
Chang, J.H.: An introduction to using QR codes in scholarly journals. Sci. Editing 1(2) (2014). https://www.escienceediting.org/journal/view.php?number=24. Accessed 29 Jan 2019
Aljazeera Balkans: Stvarna kupovina virtuelnim novcem, 12 September 2014. http://balkans.aljazeera.net/vijesti/stvarna-kupovina-virtuelnim-novcem. Accessed 26 Jan 2019
Bitcoin Forum: Tko prihvaća bitcoin kao sredstvo plaćanja, 03 April 2015. https://bitcointalk.org/index.php?topic=1011490.0. Accessed 29 Jan 2019
Arunović, D.: Što je u stvari blockshain i kako radi? BUG (2018). https://www.bug.hr/tehnologije/sto-je-u-stvari-blockchain-i-kako-radi-3011. Accessed 24 Jan 2019
Swathi, E., Vivek, G., Rani, G.S.: Role of hash function in cryptography. Int. J. Adv. Eng. Res. Sci. (IJAERS) (2016). https://www.researchgate.net/publication/312242372_Role_of_Hash_Function_in_Cryptography. Accessed 24 Jan 2019
Karame, G.O., Androulaki, E.: Bitcoin and Blockchain Security. Artech House, Boston, London (2016)
Gupta, S., Sadoghi, M.: Blockchain transaction processing. In: Sakr, S., Zomaya, A. (eds.) Encyclopedia of Big Data Technologies. Springer, Cham (2018)
Kiayias, A., Koutsoupias, E., Kyropoulou, M., Tselekounis, Y.: Blockchain Mining Games, ERC project CODAMODA (2016). https://arxiv.org/pdf/1607.02420.pdf. Accessed 24 Jan 2019
Antonopoulos, A.M.: Mastering Bitcoin. O’Reilly Media, Sebastopol (2010)
Minović, M.: Blockchain tehnologija: mogućnosti upotrebe izvan kripto valuta. Conference paper, Infotech 2017, At Aranđelovac, Srbija (2017). https://www.researchgate.net/publication/318722738_BLOCKCHAIN_TEHNOLOGIJA_MOGUCNOSTI_UPOTREBE_IZVAN_KRIPTO_VALUTA. Accessed 02 Feb 2019
Crosby, M., Nachiappan, Pattanayak, P. Verma, S., Kalyanaraman, V.: Block chain technology beyond bitcoin, Sutardja Center for Entrepreneurship & Technology Technical Report (2015). https://scet.berkeley.edu/wp-content/uploads/BlockchainPaper.pdf. Accessed 29 Jan 2019
Ekblaw, A., Azaria, A., Halamka, J.D., Lippman, A.: A case study for blockchain in healthcare: “MedRec” prototype for electronic health records and medical research data. White Paper (2016). https://pdfs.semanticscholar.org/56e6/5b469cad2f3ebd560b3a10e7346780f4ab0a.pdf. Accessed 02 Feb 2019
Author information
Authors and Affiliations
Corresponding author
Editor information
Editors and Affiliations
Rights and permissions
Copyright information
© 2020 Springer Nature Switzerland AG
About this paper
Cite this paper
Stupar, S., Bičo Ćar, M., Šahić, E. (2020). Challenges of Applying Blockchain Technology. In: Karabegović, I. (eds) New Technologies, Development and Application II. NT 2019. Lecture Notes in Networks and Systems, vol 76. Springer, Cham. https://doi.org/10.1007/978-3-030-18072-0_41
Download citation
DOI: https://doi.org/10.1007/978-3-030-18072-0_41
Published:
Publisher Name: Springer, Cham
Print ISBN: 978-3-030-18071-3
Online ISBN: 978-3-030-18072-0
eBook Packages: Intelligent Technologies and RoboticsIntelligent Technologies and Robotics (R0)