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A Technical Dive into Blockchain

Because digital ubiquity raises more and more concern for decision-makers to be able to thrive and adapt their businesses to emerging trends and shifts in consumption habits, new technologies have to be well apprehended. Blockchain, as a matter of fact, is a new enabler that must be understood properly when considering an innovation strategy for your company.

First of all, there are different types of blockchain but the general idea behind them is the same. Mainly, they aim to solve trust issues between strangers willing to exchange value in the digital world. Secondly, even though we can distinguish several kinds of blockchain such as public or semi-private infrastructures (more on that in Chapter 9, Infrastructures and Cloud-Based Solutions), they all integrate similar components.

Throughout this chapter, we will discover how the network empowers the blockchain, how hashes allow transactions and information to be secured, how digital identities are managed, and how game theory and economics enable responsible behavior. We will also have a look at the original problem that blockchain was the answer to and eventually discover what kind of consensus protocol can be implemented to achieve mass coordination within the network. Each component will be described as a sole instrument but we shall adopt a holistic view when we combine them all together. Therefore, one section can appear unclear when read separately but, by the end of this chapter, you should appreciate the functioning of the whole infrastructure and the role of each feature that come together to form a blockchain.

In this chapter, we will cover the following topics: 

  • Enliven the blockchain with the network
  • Cryptography and hash functions
  • The data structure
  • Managing digital identities
  • The Byzantine Generals Problem
  • The incentive mechanism
  • Achieving consensus
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