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2020 | Book

Build Your Own Blockchain

A Practical Guide to Distributed Ledger Technology

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About this book

This book provides a comprehensive introduction to blockchain and distributed ledger technology. Intended as an applied guide for hands-on practitioners, the book includes detailed examples and in-depth explanations of how to build and run a blockchain from scratch. Through its conceptual background and hands-on exercises, this book allows students, teachers and crypto enthusiasts to launch their first blockchain while assuming prior knowledge of the underlying technology.

How do I build a blockchain? How do I mint a cryptocurrency? How do I write a smart contract? How do I launch an initial coin offering (ICO)? These are some of questions this book answers. Starting by outlining the beginnings and development of early cryptocurrencies, it provides the conceptual foundations required to engineer secure software that interacts with both public and private ledgers. The topics covered include consensus algorithms, mining and decentralization, and many more.

“This is a one-of-a-kind book on Blockchain technology. The authors achieved the perfect balance between the breadth of topics and the depth of technical discussion. But the real gem is the set of carefully curated hands-on exercises that guide the reader through the process of building a Blockchain right from Chapter 1.” Volodymyr Babich, Professor of Operations and Information Management, McDonough School of Business, Georgetown University

"An excellent introduction of DLT technology for a non-technical audience. The book is replete with examples and exercises, which greatly facilitate the learning of the underlying processes of blockchain technology for all, from students to entrepreneurs.” Serguei Netessine, Dhirubhai Ambani Professor of Innovation and Entrepreneurship, The Wharton School, University of Pennsylvania

"Whether you want to start from scratch or deepen your blockchain knowledge about the latest developments, this book is an essential reference. Through clear explanations and practical code examples, the authors take you on a progressive journey to discover the technology foundations and build your own blockchain. From an operations perspective, you can learn the principles behind the distributed ledger technology relevant for transitioning towards blockchain-enabled supply chains. Reading this book, you'll get inspired, be able to assess the applicability of blockchain to supply chain operations, and learn from best practices recognized in real-world examples." Ralf W. Seifert, Professor of Technology and Operations Management at EPFL and Professor of Operations Management at IMD

Table of Contents

Frontmatter

Blockchain Fundamentals

Frontmatter
Chapter 1. Blockchain Foundations
Abstract
A blockchain is a ledger of blocks of information (e.g., transactions, agreements, etc.) that are stored sequentially across a network of computers. Rather than a simple algorithm, blockchain is a technology construct and an enabling protocol that facilitates a decentralized brokering of data among participants, i.e., its revolutionary properties do not derive from what blockchains do (i.e., store data securely), but from the manner in which they are used and implemented (i.e., trustless and decentralized).
Daniel Hellwig, Goran Karlic, Arnd Huchzermeier
Chapter 2. Cryptocurrencies
Abstract
A cryptocurrency is a currency in the digital realm that is designed to work as a medium of exchange. Entries of units—called tokens or crypto tokens—in a decentralized consensus-database (blockchain) make up the fabric of the cryptocurrency. As the name suggests, the construct underlying cryptocurrencies relies heavily on cryptography to ensure that transactions are verified and secure, and to control the supply of new units.
Daniel Hellwig, Goran Karlic, Arnd Huchzermeier
Chapter 3. Consensus Mechanisms
Abstract
Of one blockchain’s most prized features is the consistency, hence security, it provides to the stored data. Consistency is achieved through consensus mechanisms, the most common of which is Bitcoin’s Proof of Work (PoW) mechanism.
Daniel Hellwig, Goran Karlic, Arnd Huchzermeier
Chapter 4. Smart Contracts
Abstract
One of the most exciting topics to emerge in the blockchain ecosystem is the smart contract. A smart contract is a computer program whose code is stored in a distributed blockchain structure and that directly controls digital assets without relying on a third-party intermediary.
Daniel Hellwig, Goran Karlic, Arnd Huchzermeier
Chapter 5. Privacy and Anonymity
Abstract
Bitcoin is the world’s most transparent payment method in the sense of transaction traceability: Any transaction that occurs on the network can be traced to its origin, and any account that was ever linked to any bitcoin or fraction of a bitcoin is similarly traceable.
Daniel Hellwig, Goran Karlic, Arnd Huchzermeier

Cryptography Foundations

Frontmatter
Chapter 6. Blockchain Cryptography: Part 1
Abstract
Cryptology is the science of encrypting and decrypting information and the methods employed to those ends. Cryptography (from the Greek “kryptós,” meaning secret or hidden, and “gráphein,” meaning writing) is a subset of cryptology that describes the creation of methods for encrypting information so it cannot be understood by unauthorized parties. Steganography refers to methods for disguising the communication channel over which cryptographically encrypted messages are sent.
Daniel Hellwig, Goran Karlic, Arnd Huchzermeier
Chapter 7. Blockchain Cryptography: Part 2
Abstract
Chapter 6 introduced the concept of symmetric cryptography. As the name suggests, a symmetric encryption scheme uses the same key for both encryption and decryption; the key is known to the sender and recipient of the message but must remain unknown to anyone else. To communicate secretly, a sender uses an invertible cryptographic function to encrypt a plaintext m with the key k and then sends the resulting ciphertext c to the recipient.
Daniel Hellwig, Goran Karlic, Arnd Huchzermeier

Real-World Applications

Frontmatter
Chapter 8. Blockchain in Action: Real-World Applications
Abstract
Now that we are nearing the end of our exploration of the workings and details of blockchain, it would be worthwhile to overview instances in which this technology has lent itself well to execution and been applied to advantage. As is often the case with potentially disruptive innovations, adoption proceeds slowly as actors learn about the technology and how best to harness its potential.
Daniel Hellwig, Goran Karlic, Arnd Huchzermeier
Backmatter
Metadata
Title
Build Your Own Blockchain
Authors
Daniel Hellwig
Goran Karlic
Prof. Dr. Arnd Huchzermeier
Copyright Year
2020
Electronic ISBN
978-3-030-40142-9
Print ISBN
978-3-030-40141-2
DOI
https://doi.org/10.1007/978-3-030-40142-9

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