Blockchain, Smart Contracts, and Decentralized Applications: An Introduction

Abstract

Blockchain, a most common synonym for distributed ledger (Tschorsch and Scheuermann in IEEE Commun Surv Tutor 18:2084–2123, 2016), is an emerging platform. Blockchain is used to support transactional services within a multi-party business network. The aim is to enable a significant reduction in cost and risk for all involved parties through the creation of novel and enhanced business models. Data maintained within the distributed ledger can only be accessed through the execution of a smart contract (Seijas, Scripting smart contracts for distributed ledger technology, International Association for Cryptologic Research, 1156, 2016) that governs a transaction with rules. The core driving idea for designing the architecture of a blockchain platform is to guarantee that no single business party can append, modify or delete any record residing within the ledger without going through the necessary consensus from other business parties within the network. This empowers the system and ensures the data is immutable. Examples of such data include but are not limited to legal and financial trails. Given the aforementioned important features, blockchain technology is a revolutionary trending technology with the ability to offer tremendous disrupting changes to different industries. Gartner’s 2016 research report (Gartner, Gartner’s 2016 hype cycle for emerging technologies special report, 2016) identified blockchain as one of the key platform-enabling technologies to track. While there is currently a lack of widely identified and accepted standards for blockchain technology, there is a rising agreement that blockchain is currently entering its height of extravagant expectations. The report anticipated that it would take 5 to 10 years for blockchain technology to be easily and widely adopted. Nowadays, almost five years later most blockchain efforts, especially the ones applied to business environments, are still in the early stages not reaching the widely adoption stage also not realizing a widely accepted standard so far. In this book chapter, an attempt will be made to cover the main concepts of blockchain, its underlying technologies, Smart Contracts, and Decentralized Applications (DApps).