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2021 | Book

Behold the Dreamers Read chapter Read first chapter

Blockchain Enabled Applications

Understand the Blockchain Ecosystem and How to Make it Work for You

Authors: Vikram Dhillon, David Metcalf, Max Hooper

Publisher: Apress

Part of: Springer Professional "Wirtschaft+Technik" , Springer Professional "Technik" , Springer Professional "Wirtschaft"

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About this book

Learn all about blockchain and its applications in cryptocurrency, healthcare, Internet of Things, finance, decentralized organizations, and more. Featuring case studies and practical insights, this book covers a unique mix of topics and offers insight into how to overcome hurdles that arise as the market and consumers grow accustomed to blockchain-based organizations and services.

The book is divided into three major sections. The first section provides a historical background to blockchain technology. You will start with a historical context to financial capital markets when Bitcoin was invented, followed by mining protocols, the need for consensus, hardware mining, etc. Next, a formal introduction to blockchain is provided covering transaction workflow, role of decentralized network, and payment verification. Then, we dive deep into a different implementation of a blockchain: Ethereum. The main technical features, such as Ethereum Virtual Machine, are presented along with the smart contract programming language, Solidity.

In this second section, you will look at some modern use cases for blockchain from a decentralized autonomous organization, high-performance computing in Ethereum and off-grid computations, and healthcare and scientific discovery. The final section of the book looks toward the future of blockchain. This is followed by chapters covering the rise of consortia in the blockchain world, the Hyperledger project, particularly the updates since 2018, and a chapter on educational blockchain games. This is followed by updates to EOS.IO, Chain Core, and Quorum, ICOs and a look at the major changes to financial markets brought about by blockchain and decentralized networks.

What You Will Learn

Get an overview of the popular games employed to teach the basic concepts of blockchain and decentralized networksBe familiar with the rise of blockchain consortiums as well as updates to Hyperledger Project, 2020Find out about cloud blockchains, including Microsoft Azure and Amazon Webservices, and how to set up test environmentsStudy machine learning integration in the blockchain and the role of smart contracts

Who This Book Is For

Blockchain developers interested in keeping up with the newest updates and students looking for a broad overview of this vast ecosystem, plus business executives who want to make informed product decisions about including blockchain as well as policy makers who want a better understanding of the current use cases

Table of Contents

Frontmatter
Chapter 1. Behold the Dreamers
Abstract
Anxiety is perhaps the best way to describe the attitude that dominated the minds of investors and the general public concerning the financial markets toward the end of 2008. The 2008 financial crisis is considered by numerous economists to have been the worst financial crisis since the Great Depression. The years leading up to the crisis saw a flood of irresponsible mortgage lending and a massive systemic failure of financial regulation and supervision. The fallout was so immense that it threatened the collapse of large financial institutions, and national governments had to intercede to bail out the major banks. In this chapter, we will begin our discussion with an overview of the 2008 financial crisis and its aftermath: an environment where a new banking system and an alternative currency such as Bitcoin could thrive. Then, we will dive into the technology stack that powers Bitcoin. Remarkably, the components of this stack are not completely new, but have been integrated in a very intricate design to build a new system. Finally, we will end the discussion by talking about the heightened interest in blockchain, a major technical breakthrough that has the potential to revolutionize several industries. Imbolo Mbue wrote a book (Random House, 2017), which has the same name as this chapter, and tells the story of "dreamers" in New York City going through the financial crisis, and how their lives had changed as a result. This book chronicles the dreamers who envisioned building a more resilient financial system.
Vikram Dhillon, David Metcalf, Max Hooper
Chapter 2. The Gold Rush: Mining Bitcoin
Abstract
Mining is a key operational concept in understanding how the Bitcoin protocol functions. It refers to a decentralized review process performed on every block of the blockchain to reach consensus, without the need for a central authority to provide trust. In other words, mining is the computational equivalent of peer review in a decentralized environment where neither party involved trusts the other. We will continue our discussion of the hash function here in more depth, as it refers to mining and solving proof-of-work functions. Then, we will integrate the concepts of block target values and network difficulty with mining and how mining has evolved to keep up with the increasing network difficulty. This will lead us further into talking about the different types of hardware mining that have been developed recently. We will end the chapter with an analysis of startups that began selling dedicated hardware for mining, leading to the Bitcoin mining arms race and the startups’ eventual failure.
Vikram Dhillon, David Metcalf, Max Hooper
Chapter 3. Foundations of a Blockchain
Abstract
A blockchain is a decentralized data structure with internal consistency maintained through consensus reached by all the users on the current state of the network. It is an enabling technology that resolved the Byzantine Generals Problem (described as a problem of establishing trust between three generals such that a coordinated strike can take down an enemy; more in Chapter 1) and opened a new horizon of possibilities for application development with trustless transactions and exchange of information. If the internet democratized the peer-to-peer exchange of information, then the blockchain has democratized the peer-to-peer exchange of value. We will begin this chapter by exploring how transactions work between users on the Bitcoin network. This will entail a technical discussion of the structures of a block and a transaction. Then, we will dive into the role of wallets and user addresses. After talking about wallets, we will shift our focus to Simple Payment Verification (SPV), which is implemented in the Bitcoin network. SPV will allow us to understand why blocks have a peculiar structure and, more important, how the Bitcoin network can retain efficiency despite the network’s scaling at a high rate. Finally, we will end our discussion by talking about hard and soft forks in the Blockchain. We will present the implications of forks in the context of forward compatibility for merchants and users involved in running the Bitcoin core code. Even though there are numerous variations of blockchain during this "Cambrian explosion" phase of tech development, the core principles remain the same.
Vikram Dhillon, David Metcalf, Max Hooper
Chapter 4. Unpacking Ethereum
Abstract
Ethereum is an open source, decentralized blockchain platform with computational capabilities that reconstructs an elementary currency exchange into a transfer of value between users via a scripting language. Ethereum is widely recognized as a successor to the Bitcoin protocol, generalizing the original ideas and enabling a more diverse array of applications to be built on top of the blockchain technology. Ethereum has two essential components. First, there is a Turing-complete virtual processor that can load resources and execute scripts called the Ethereum Virtual Machine (EVM). The second component is a token of value called ether, which is the currency of the network and is used for user-to-user transactions or compensation to miners of the network. In this chapter, we begin our journey with an overview of Ethereum’s architecture in comparison to Bitcoin, focusing on the EVM and Turing-completeness properties. Following the architecture section, there is a short discussion of the accounts model in Ethereum and account representation with Merkle-Patricia Trees. This will lead us to the topics of global state representation in Ethereum, account storage, and gas, which is a spam-prevention mechanism in the network. Then, we deconstruct the notion of a smart contract enabled by EVM, the security concerns revolving around sandboxing executable code, and how the EVM pushes executable code (bytecode) to the blockchain. After that, we provide an introduction to Solidity and Vyper, two programming languages used for writing smart contracts in Ethereum. We explore the syntax of Solidity and Vyper, as well as the popular integrated development environments (IDEs) being used, and provide a brief list of key developer resources. Next, we focus on the World Computer model proposed in Ethereum and introduce supporting decentralized technologies such as IPFS and Whisper. Then, we look at the state of decentralized apps (DApps) along the publishing platform called Mist available in Ethereum. This allows us to transition into talking about the Layer 2 updates to Ethereum—the major technical focus of this chapter and the Ethereum ecosystem in 2020. Finally, we conclude the chapter with a brief discussion of the enterprise side. Here, we introduce a particularly noteworthy development of Blockchain-as-a-Service (BaaS) deployed on the Azure cloud by Microsoft.
Vikram Dhillon, David Metcalf, Max Hooper
Chapter 5. Decentralized Organizations
Abstract
Bitcoin can be thought of as the first prototypical Decentralized Autonomous Organization (DAO). It created a network-based ecosystem of participants who contribute computational power toward a singular goal. In Bitcoin, the underlying protocol created a financial service that rewards miners for providing verification services, and this setup became a rudimentary decentralized organization. In this chapter, we will focus on more-complex organizations created on the blockchain with Aragon. Aragon is a decentralized application (DApp) that lets anyone create and manage different kinds of organizations (NGOs, non-profits, foundations) on the Ethereum blockchain. In the early days of Ethereum, creating a DAO and implementing even the most basic functions required complicated smart contracts and Solidity code. Aragon has simplified this process. It implements the basic features of an organization in a base template that gets deployed whenever a user instantiates a company. Most of the traditional features such as a cap table, voting abilities, fundraising, and accounting are offered in the Aragon template as a decentralized counterpart running on the blockchain. In addition, an Aragon company can be customized in a very granular fashion and extended with new modules that can be added to a company’s existing smart contracts. Aragon enables different organizations to control the level of trust built into them.
Vikram Dhillon, David Metcalf, Max Hooper
Chapter 6. The DAO Hacked
Abstract
In Chapter 5, we discussed the concept of decentralized organizations and the modus operandi of a DAO. Here, we want to highlight a historic moment leading to the creation of the first DAO, and how it eventually got hacked. Our discussion begins with a fresh perspective on decentralized organizations from Buterin, and leads into the story of Slock.it, the company at the heart of the DAO revolution. Then, we present some code that made The DAO dysfunctional: pieces of the smart contract relevant to the vulnerability, the conditions that allowed repetitive withdrawals from The DAO, and the exploit itself. We conclude the chapter by talking about the consequences of this hack: the debate about hard versus soft forks, and the creation of Ethereum Classic.
Vikram Dhillon, David Metcalf, Max Hooper
Chapter 7. High-Performance Computing
Abstract
In the Ethereum ecosystem, the transfer of value between users is often realized by the use of tokens that represent digital assets. Ether is the default token and the de facto currency used for transactions and for initializing smart contracts on the network. Ethereum also supports the creation of new kinds of tokens that can represent any commonly traded commodities as digital assets. All tokens are implemented using the standard protocol, so the tokens are compatible with any Ethereum wallet on the network. The tokens are distributed to users interested in the given specific use case through an Initial Coin Offering (ICO). In this chapter, we will focus our attention on tokens created for a very specific use case: high-performance computing (HPC). More precisely, we will discuss a model of distributed HPC where miners offer computational resources for a task and get rewarded in some form of Ethereum token.
Vikram Dhillon, David Metcalf, Max Hooper
Chapter 8. Blockchain in Science
Abstract
Evidence-based clinical sciences are currently suffering from a paralyzing reproducibility crisis. From clinical psychology to cancer biology, recent meta-research indicates a rise in researchers’ failing to replicate studies published by their peers. This problem is not just limited to bench-work that happens in a lab; it also plagues translational research where the transformation from bench to bedside happens. Treatments, tests, and technologies are converted from simple lab experiments to FDA-approved devices and assays that affect hundreds of lives. Therefore, replicability is crucial to converting scientific breakthroughs into pragmatic remedies.
Vikram Dhillon, David Metcalf, Max Hooper
Chapter 9. Blockchain in Healthcare
Abstract
The healthcare sector is a $3 trillion industry, and about $1 trillion of it goes to waste annually. Care coordination is becoming more complex as chronic conditions in the aging population continue to rise. In many instances, the technology available to healthcare providers is not adequate to capture all aspects of the care being provided. The result is a rugged transfer of information between parties that ultimately reduces the quality of care being provided to patients. This is largely due to providers’ having legacy systems, lack of integration with non-vendor-specific technologies, paper-based medical records, and a lack of horizontal transfer between allied healthcare professions. Hospitals are investing a considerable amount of resources into duplicating work that can be completed by a sophisticated technology infrastructure and amplifying the inefficiency of using poorly designed systems. In this use case, we discuss the payer–provider–patient model in the context of the incentives and services each provides and how this model is likely to change in the near future. We then introduce how blockchain can integrate into tracking the workflow of a patient from the first visit to the final diagnosis and treatment plan. We introduce two new features that blockchain integration can enable: hot switching of components and medical data curation. Then, we present a use case of physician credentialing using the blockchain. Finally, we conclude by discussing waste management in healthcare and efforts by Capital One + Gem to increase the economic output.
Vikram Dhillon, David Metcalf, Max Hooper
Chapter 10. Lean Blockchain
Abstract
For developers interested in building blockchain products, simply investing time in the technology is not enough. The blockchain stack comprises business logic integrated deeply into the technology models. As a result, an introductory level of familiarity with frameworks that formally describe the components of a startup and how to build a company around a product is necessary. This chapter begins with lean methodology, a model created by Eric Ries that relies on three core principles: 1) transform the most basic version of your idea into a product that a customer can interact with; 2) talk to your potential customers early and often; and 3) iterate over that basic model with feedback from your customer to achieve a full product that aligns with customer needs. And we keep in mind this quote from Eric: “As you consider building your own minimum viable product, let this simple rule suffice: remove any feature, process, or effort that does not contribute to the learning you seek.” Then, we present the business-model canvas that breaks down lean methodology into nine applicable components. In addition, we talk about Geoffrey Moore’s approach to product-market fit for high-risk, high-reward technologies. Following this discussion, we present three models to help determine whether your organization can benefit from using a blockchain. Once a decision has been reached on using a blockchain, the Hyperledger Project provides multiple options for enterprise-grade blockchains that can be customized and deployed. Finally, we end the chapter with a brief overview of Hyperledger Composer and the templates it provides for capturing business logic.
Vikram Dhillon, David Metcalf, Max Hooper
Chapter 11. Blockchain 3.0
Abstract
The rapid growth of R&D in the blockchain world can be explained by the industry’s gaining a deeper understanding of where the value is created and captured for a traditional internet company and a blockchain company. Joel Monegro and Naval Ravikant talk about the idea of fat protocols, where most of the innovation in the blockchain space will happen at the core technology level. Then a token layer can monetize the use of the underlying architecture and provide access to the application layer. To that end, we have seen three iterations of blockchains in development: the first version was the original protocol by Satoshi that provides a functional blockchain for transactions. The second version was protocols like Ethereum that provide smart contracts and on-chain operations. The next generation of blockchain protocols allow on-chain execution and the integration of services such as machine learning onto a blockchain for advanced tasks.
Vikram Dhillon, David Metcalf, Max Hooper
Chapter 12. Technological Revolutions and Financial Capital Markets
Abstract
Global financial markets are undergoing a drastic change that makes it clear that without innovation most business and financial models could soon become obsolete. A recent overview of the global financial system described the current system as a
Vikram Dhillon, David Metcalf, Max Hooper
Chapter 13. Building a Healthcare Consortium
Abstract
John Bass is the founder and CEO of Hashed Health, a blockchain-based health IT consortium with members working to commercialize appropriate use cases in healthcare and deliver a proof-of-concept that can be scaled. In this chapter, we interview John Bass about the following topics:
Vikram Dhillon, David Metcalf, Max Hooper
Chapter 14. Blockchain-as-a-Service
Abstract
In an earlier chapter, we talked about using lean methodologies to discover whether integrating a blockchain is the right choice; we also provided an open source avenue in the form of open source DLTs available through Hyperledger. This chapter extends our prior discussion to Blockchain-as-a-Service: a more immersive environment for testing a blockchain deployment and smart contracts in the cloud.
Vikram Dhillon, David Metcalf, Max Hooper
Chapter 15. Rise of Blockchain Consortia
Abstract
This chapter is transcribed from a conversation between Vikram Dhillon and Katherine Kuzmeskas from Tamarin Health on her journey of creating a blockchain company, the challenges faced on the way, the evolving nature of consortia, and the future of her company.
Vikram Dhillon, David Metcalf, Max Hooper
Chapter 16. The Art of the Newly Possible: Transforming Health with Emerging Technology and Federated Learning
Abstract
This chapter is derived from a presentation, “The Art of the Newly Possible: How 5 Emerging Technologies Will Transform Health,” delivered by the authors (Heather Flannery, Jonathon Passerat-Palmbah PhD, and Sean T. Manion, and edited by Vikram Dhillon) at the online ConsenSys Health COVID-19 Veterans Health Summit on August 26, 2020.
Vikram Dhillon, David Metcalf, Max Hooper
Chapter 17. Formal Blockchain Research and Education
Abstract
This chapter is based on an interview between Vikram Dhillon and Tory Cenaj, in which Tory talks about her journey toward creating a formal educational space to study blockchain when most of the work was still being done informally and disseminated largely through developer blogs. Blockchain in Healthcare Today is a prominent peer-reviewed journal today in the blockchain space, with an editorial board that has a very broad spectrum of experiences.
Vikram Dhillon, David Metcalf, Max Hooper
Chapter 18. Blockchain Simulation
Abstract
The University of Central Florida’s Institute for Simulation and Training has been awarded by the ARO (Army Research Office) a DURIP (Defense University Research Instrumentation Program) award to build a blockchain and quantum defense simulator. This unique program allows for state-of-the-art technology to be built not only to serve the U.S. military but also to provide for research and experimentation throughout academia, industry, non-profits, and other partnerships. As America’s Partnership University,™ UCF is committed to broad-access critical infrastructure that will help define our future. With the age of quantum computing at our doorstep, the cryptographic methods used and the security of the entire process, including the people, processes, and technology, could be susceptible to bad actors.
Vikram Dhillon, David Metcalf, Max Hooper
Backmatter
Metadata
Title
Blockchain Enabled Applications
Authors
Vikram Dhillon
David Metcalf
Max Hooper
Copyright Year
2021
Publisher
Apress
Electronic ISBN
978-1-4842-6534-5
Print ISBN
978-1-4842-6533-8
DOI
https://doi.org/10.1007/978-1-4842-6534-5

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