Advertisement

Blockchain: Basics

  • Aljosha Judmayer
  • Nicholas Stifter
  • Philipp Schindler
  • Edgar WeipplEmail author
Chapter

Abstract

Over the last decade, the principle of blockchains has risen from relative obscurity in what was at the time a comparatively small community of Bitcoin users to worldwide prominence. The recent success of Bitcoin has led to extensive news coverage in mainstream media and widespread interest from the general public. Reports, videos and myths surrounding Bitcoin show how difficult the fundamentals are to understand for non-expert users, not to mention the fact that there is still very little awareness or understanding of systems other than cryptocurrencies that rely on the principle of blockchains. We hope this chapter will help demystify the concept and provide a sound introduction to the underlying technologies and consensus mechanisms of the blockchain. Although the term blockchain is closely linked to Bitcoin (to the point where many laypeople consider them quasi-synonymous), the term was not introduced by Satoshi Nakamoto in the original paper that presented Bitcoin (Nakamoto 2008) as a prototype for a decentralized cryptocurrency. The term emerged in the Bitcoin community to describe the principle of the new cryptocurrency, and is therefore not standardized terminology. Therefore, there are two common spelling variants: blockchain and block chain. Although the latter was used by Satoshi Nakamoto in a comment in the original source code, the former is more frequently used in academic literature, for example, in publications such as Croman et al. (2016) and press reports, and can be regarded as a de facto standard. Therefore, we will use the spelling blockchain.

Keywords

Blockchain Bitcoin Cryptocurrencies Nakamoto consensus Proof-of-work Proof-of-stake 

References

  1. Becker, G. (2008). Merkle Signature Schemes, Merkle Trees and Their Cryptanalysis. http://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.392.7879&rep=rep1&type=pdf
  2. Bentov, I., Charles, L., Mizrahi, A., & Rosenfeld, M. (2014). Proof of Activity: Extending Bitcoin’s Proof of Work via Proof of Stake. ACM SIGMETRICS Performance Evaluation Review, 42(3), 34–37.CrossRefGoogle Scholar
  3. Bentov, I., Pass, R., & Shi, E. (2016). Snow White: Provably Secure Proofs of Stake. Cryptology ePrint Archive, Report 2016/919. https://eprint.iacr.org/2016/919.pdf
  4. Bitcoin Forum. (2011). Proof of Stake Instead of Proof of Work. https://bitcointalk.org/index.php?topic=27787.0. Accessed 8 Dec 2016.
  5. Bonneau, J., et al. (2015). SoK: Research Perspectives and Challenges for Bitcoin and Cryptocurrencies. 2015 IEEE Symposium on Security and Privacy. https://www.ieee-security.org/TC/P2015/
  6. Bos, J. W., et al. (2014). Elliptic Curve Cryptography in Practice. International Conference on Financial Cryptography and Data Security 2014. https://www.amazom.de/Financial-Cryptography-Data-Security-International/dp/3662454718
  7. Cohen, H., et al. (2005). Handbook of Elliptic and Hyperelliptic Curve Cryptography. Boca Raton: Chapman & Hall/CRC.CrossRefGoogle Scholar
  8. Croman, K., et al. (2016). On Scaling Decentralized Blockchains. International Conference on Financial Cryptography and Data Security 2016.Google Scholar
  9. Duong, T., Fan, L., & Zhou, H.-S. (2016). 2-Hop Blockchain: Combining Proof-of-Work and Proof-of-Stake Securely. https://eprint.iacr.org/2016/716.pdf
  10. Eyal, I., & Sirer, E. G. (2014). Majority Is Not Enough: Bitcoin Mining Is Vulnerable. International Conference on Financial Cryptography and Data Security 2014.Google Scholar
  11. Hankerson, D., Menezes, A. J., & Vanstone, S. (2006). Guide to Elliptic Curve Cryptography. New York: Springer.Google Scholar
  12. Hoffstein, J., Pipher, J., & Silverman, J. H. (2008). An Introduction to Mathematical Cryptography. New York: Springer.Google Scholar
  13. Katz, J., & Lindell, Y. (2014). Introduction to Modern Cryptography. Boca Raton: CRC Press.Google Scholar
  14. Kiayias, A., Konstantinou, I., Russell, A., David, B., & Oliynykov, R. (2016). A Provably Secure Proof-of-Stake Blockchain Protocol. Cryptology ePrint Archive, Report 2016/889. http://eprint.iacr.org/2016/889.pdf
  15. King, S., & Nadal, S. (2012, August 19). Ppcoin: Peer-to-Peer Crypto-Currency with Proof-of-Stake. Self-Published Paper.Google Scholar
  16. Mackenzie, A. (2014). Memcoin2: A Hybrid Proof of Work/Proof of Stake Cryptocurrency. http://mc2.xwebnetwork.com/storage/mc2%20draft%20v0.04.pdf
  17. Menezes, A. J., et al. (1996). Handbook of Applied Cryptography. Boca Raton: CRC Press.CrossRefGoogle Scholar
  18. Merkle, R. C. (1987). A Digital Signature Based on a Conventional Encryption Function. Conference on the Theory and Application of Cryptographic Techniques 1987.Google Scholar
  19. Nakamoto, S. (2008). Bitcoin: A Peer-to-Peer Electronic Cash System. https://bitcoin.org/bitcoin.pdf
  20. Sompolinsky, Y., & Zohar, A. (2015). Secure High-Rate Transaction Processing in Bitcoin. Financial Cryptography and Data Security (pp. 507–527). New York: Springer. http://www.cs.huji.ac.il/ avivz/pubs/15/btc_ghost_full.pdfCrossRefGoogle Scholar
  21. Zamfir, V. (2017). Casper the Friendly Ghost a “Correct-by-Construction” Blockchain Consensus. https://github.com/ethereum/research/raw/master/papers/CasperTFG/CasperTFG.pdf

Copyright information

© The Author(s) 2019

Authors and Affiliations

  • Aljosha Judmayer
    • 1
  • Nicholas Stifter
    • 2
  • Philipp Schindler
    • 1
  • Edgar Weippl
    • 3
    Email author
  1. 1.SBA ResearchWienAustria
  2. 2.TU Wien, CDL-SQIWienAustria
  3. 3.TU Wien, FH St. PöltenWienAustria

Personalised recommendations