Abstract
Currently, the financial transactions between individuals, organizations, and companies are taking place with the help of third-party approval of intermediaries such as banks, financial institutions, standardizing bodies, or credit card providers. These transactions involve multilevel approvals, costs, and inefficient processes in some cases, which also lead to waste of time and resources. To resolve these issues, blockchain technology has appeared as a new financial digital innovative solution. Here, financial transactions are online, open, and transparent. In this chapter, the authors present systematic literature of relevant research on blockchain technology. The objective is to understand the historical evolutions, current ongoing research, base technologies, and applications. The authors have extracted research articles from scientific databases including EBSCO, Scopus, Web of Science, and Google Scholar. The online blogs, wikis, media articles, YouTube videos, and companies' white papers on blockchain technology are also used for content analysis.
TopBlockchain Concepts
The “Blockchain” technology is becoming one of the most demandable disruptive technologies along with Artificial Intelligence (AI), Machine Learning (ML), Deep Learning, Data Analytics, Internet of Things (IoT), and Cloud Computing. There is much in the literature on this emerging technology in the form of news scripts, journal articles, book chapters, analysis reports, and books. There are also vocal discussions on blockchain technologies in public speaking events, seminars, conferences, lectures, doctoral colloquium, webinars, and even special programs like conference-cum-exhibitions. This shows that there is a huge demand for this phenomenon. The past studies are giving evidence that there is increasing demand for this technology, as this is becoming highly attractive especially for financial transactions and banking services. Research by Blidholm & Johnson (2018); Coeckelbergh & Reijers (2016); Grigoriadou (2019); Hütten (2017); Khatal et al. (2020); Lundström & Öhman (2019); Manrique (2018); Mihigo (2019); Mushtaq & Haq (2019); Nehaï & Guerard (2017); Shi (2019); Songara & Chouhan (2017) amply sheds light on the need for blockchain technology, online distributed ledger, blockchain and InterPlanetary File System (IPFS) framework, and their value creation. Moreover, the seminal paper by Madakam & Kollu (2020) explains clearly about the fundamentals of blockchain technologies - perceptions, principles, procedures and practices.
Key Terms in this Chapter
Smart Contracts: A smart contract is a digital code that enables the execution of a contract between two parties through blockchain, without involvement of any legal system. The transactions emanating out of the contract are also recorded on blockchain and are therefore immutable.
Proof-of-Work: Proof-of-Work is a consensus mechanism that allow distinguishing a valid from an invalid blockchain. In Bitcoin, hashing is used for ‘Proof of Work’.
Cryptocurrency: This refers to a digital currency, the units of which are created mostly without involvement of any government financial institution. The transaction records for cryptocurrencies are maintained using digital ledgers employing cryptography technique. Therefore, the name ‘cryptocurrency’.
Bitcoin: It refers to a cryptocurrency introduced as ‘peer-to-peer electronic cash system’. It permits transfer of electronic cash from one entity to the other, without involving any financial institution in between.
Data Integrity: This is the assurance of the data accuracy, and its consistency over its entire life cycle. It also includes ensuring the soundness of the system that collects, stores, processes, transfers, and retrieves data. Blockchain technology, being immutable, can ensure data integrity.
Blockchain Technology: It is a digital ledger database technology; wherein blocks of information are recorded, stacking one upon the other to form an interconnected chain. Each block carries a unique identity called hash, and the records are immutable.
Digital Signatures: This is a digital authentication mechanism that is attached to any digital document to recognize the identity of the sender. Akin to a handwritten signature, it is employed as a means to authenticate that the content of a document are indeed being sent by the intended party.
Data Security: Data security is keeping any digital database out of the reach of unauthorised entities and attacks. It involves ensuring the privacy for the miner, giving authentication for sender and receiver, securing the transactions in the process and minimizing the noise errors.
Miner: Miner is an actor who participates in cryptocurrency transactions, and in turn, plays a crucial role both in creating new cryptocurrencies and in verifying transactions on the blockchain. It adds new blocks to the existing chain, and ensures that these additions are accurate.