Evolution, Architecture and Characteristics of Blockchain

1. Muhammad Nasir Mumtaz Bhutta
College of Computer Science and Information Systems
King Faisal University, Saudi Arabia
Email: mmbhutta@kfu.edu.sa,
Tel: +966 – 13589-9207
Office: 2088, first floor, CCSIT Building
www.kfu.edu.sa
Blockchain Technology: Evolution,
Characteristics and Architecture
9 April 2019

2. Dr M Nasir Mumtaz Bhutta www.kfu.edu.sa
Presentation Overview
• Blockchain Evolution
• Characteristics of Blockchain Technology
• Blockchain Architecture
• Types of Blockchain
• Open Research Directions
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3. Dr M Nasir Mumtaz Bhutta www.kfu.edu.sa
Blockchain Evolution – I
• Blockchain 1.0 concept got popularity as a
shared ledger to store the transactions of Digital
Cash “Bitcoin”.
– The, crypto currency (digital cash), Bitcoin allows the
sale and purchase transactions between interested
parties without need of any trusted third party such as
Banks.
– Blockchain helps to transfer the assets (digital cash)
between transacting parties.
– The Blockchain also keeps track of user’s balances of
currency to be spent in transactions.
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4. Dr M Nasir Mumtaz Bhutta www.kfu.edu.sa
Blockchain Evolution – II
• With the passage of time, the Blockchain potential was
realized by researchers to provide solutions in more
generalized form called Blockchain 2.0 (Smart Contract).
• Smart Contracts concept is beyond merely storing the
financial transactions of digital currency.
– It developed as a way to automatically enforce the rules agreed
between interested parties like traditional business contracts.
– It works as entire slate of market and financial applications using
Blockchain for more than simple cash transactions including
stocks, bonds, loans, mortgages, smart properties etc.
– In short, it helps to implement the complete cycle of contracts
between interested parties.
• After Smart Contracts, Blockchain realized as a platform
to develop more generic secure applications pertaining
to all areas of life called Blockchain 3.0.
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5. Dr M Nasir Mumtaz Bhutta www.kfu.edu.sa
Blockchain Evolution – III
• Blockchain 3.0 or Blockchain Applications is a
platform to develop distributed, secure
applications beyond the monetary markets,
payments, financial services and economies.
– It supports a universal and global scope and scale
that was previously impossible with interconnection of
web.
– It is seen as a good means to allocate resources in
particular of physical-world assets and also human
assets.
– It is being seen as a technology to contribute
extensively for the development of Smart world using
Internet of Things (IoT).
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6. Dr M Nasir Mumtaz Bhutta www.kfu.edu.sa
Characteristics of Blockchain
Technology – I
• The most important characteristics that enable
the Blockchain technology to radically reshape
several industries are:
– Decentralization
– Pseudonymity
– Transparency
– Democracy
– Immutability
– Auditability
– Fault Tolerance
– Security
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7. Dr M Nasir Mumtaz Bhutta www.kfu.edu.sa
Characteristics of Blockchain
Technology – II
• Decentralization
– The Blockchain systems run normally in a peer-to-
peer manner without a centralized third party.
• Pseudonymity
– Each node (consumer) is linked to a public
pseudonymous address keeping its real world identity
hidden.
• Transparency
– Blockchain enables everyone to access all
transaction record thus making it transparent.
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8. Dr M Nasir Mumtaz Bhutta www.kfu.edu.sa
Characteristics of Blockchain
Technology – III
• Democracy
– Each activity record to be recorded as part of
Blockchain is agreed by consensus of all
decentralized nodes which makes it
democratized.
• Immutability
– Any small change in the transactions or
record of Blockchain can be immediately
detected using Hash functions and digital
signatures.
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9. Dr M Nasir Mumtaz Bhutta www.kfu.edu.sa
Characteristics of Blockchain
Technology – IV
• Auditability
– All peers (consumers) in Blockchain hold a copy of all
transactions (activities) and can thus access all time
stamped records for verification.
• Fault Tolerance
– All Blockchain peers contain the identical replicas of
the ledger record. Any fault or data leakage can be
identified through decentralized consensus.
– Also, there is not a single point of failure due to its
decentralization nature.
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10. Dr M Nasir Mumtaz Bhutta www.kfu.edu.sa
Characteristics of Blockchain
Technology – V
• Security
– Blockchain uses many cryptographic
techniques to provide security including
symmetric and asymmetric key cryptography.
• After reviewing the characteristics of
Blockchain, let’s discuss its architecture.
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11. Dr M Nasir Mumtaz Bhutta www.kfu.edu.sa
Blockchain Architecture – I
• Block: A Blockchain is made up of blocks
containing the transactions occurred within
the network.
• The transaction information stored in
blocks can be regarding assets transfers
(digital cash) occurring in a network or any
manner of data exchange.
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12. Dr M Nasir Mumtaz Bhutta www.kfu.edu.sa
Blockchain Architecture – II
• Each block is logically divided into two parts: the
Header and the Body.
• The body section contains the transaction
information while the header contains the ID of
the previous block.
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Source: [3]

13. Dr M Nasir Mumtaz Bhutta www.kfu.edu.sa
Blockchain Architecture – III
• The blocks are chained to each other as
like linked list.
• The first block in the chain is called
“Genesis Block”.
• The identifier of each blocked in obtained
by taking the cryptographic hash of the
block containing the identifier of previous
block thus achieving the immutability of its
contents.
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14. Dr M Nasir Mumtaz Bhutta www.kfu.edu.sa
Blockchain Architecture – IV
• The header part of the block also contains the
publish timestamp of it and Merkle tree root for
all the transactions stored within body of the
block as shown below:
• The Merkle tree root
significantly reduces
the effort required to
verify transactions
within a block.
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15. Dr M Nasir Mumtaz Bhutta www.kfu.edu.sa
Blockchain Architecture – V
• The Blockchain grows linearly and new block is
added when transaction activity increases.
• Peers verify the transactions recorded in a newly
published block by an agreement called
consensus.
– Different algorithms exist for consensus.
• All the transactions in a block have a separate
transaction id and this transaction id is the
cryptographic hash of the transaction
information stored in the body of the block.
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16. Dr M Nasir Mumtaz Bhutta www.kfu.edu.sa
Blockchain Architecture – VI
• The transaction IDs are hashed together in
pairs and a hash tree is built within the
block as shown in the figure below
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17. Dr M Nasir Mumtaz Bhutta www.kfu.edu.sa
Blockchain Architecture – VII
• The root of Merkle tree is stored in the
header of block and help in verification.
– To verify a transaction, Merkle tree branch
containing the transaction in question is used.
– A tempered transaction would produce altered
hashes within its branch and would be
detected without much computational effort.
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18. Dr M Nasir Mumtaz Bhutta www.kfu.edu.sa
Blockchain Architecture – VIII
• When multiple nodes in the Blockchain network
produce valid blocks at the same time, the
Blockchain can fork and maintaining a single
canonical version becomes issue.
– This issue is resolved by considering the longest fork
as canonical version.
– Other blocks in other forks are discarded.
• Block header also contains information about
consensus algorithm used within network as
well.
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19. Dr M Nasir Mumtaz Bhutta www.kfu.edu.sa
Blockchain Architecture – IX
• Transactions and Digital Signatures
– To make a transaction or data exchange
between different peers (consumers), a
public/private key pair is assigned to each
peer.
– Peers use their private key to sign the
transactions while public keys are used to
create the address of a peer by calculating its
hash.
– The public key is also obfuscated in
Blockchain.
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20. Dr M Nasir Mumtaz Bhutta www.kfu.edu.sa
Blockchain Architecture – X
• Each address of the peer is assigned an
initial amount of tokens (crypto currency or
just a token).
– Following the Genesis block, the transactions
ownership is maintained by adding or
subtracting the associated tokens with each
participating address.
– In applications other than cryptocurrency, the
tokens ownership is not stored and exchange
of data is secured only by digital signatures.
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21. Dr M Nasir Mumtaz Bhutta www.kfu.edu.sa
A General Blockchain
Architecture
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22. Dr M Nasir Mumtaz Bhutta www.kfu.edu.sa
Types of Blockchains – I
• Blockchains can categorized into multiple types
based on their usage and distinct attributes:
• Public (Permissionless) Blockchains
– Public Blockchains are truly decentralized.
– All members participate in publishing new blocks and
accessing Blockchain contents.
– These are termed as Permissionless as anyone can
maintain a copy of Blockchain and engage in
validating new blocks.
– Examples include cryptocurrency networks such as
Bitcoin, Ethereum etc.
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23. Dr M Nasir Mumtaz Bhutta www.kfu.edu.sa
Types of Blockchains – II
– In public Blockchains, publishing a new block involves
either computationally expensive puzzle solving or
staking one’s own cryptocurrency.
– Each transaction has a processing fee attached to it
which serves as an incentive to the peers attempting
to publish new blocks on the Blockchain.
• Private (Permissioned) Blockchains
– Private Blockchains are permissioned and every node
joining the network is known member of a single
organization.
– Private Blockchains are suited for a single enterprize
solutions.
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24. Dr M Nasir Mumtaz Bhutta www.kfu.edu.sa
Types of Blockchains – III
– Private Blockchains are utilized as a
synchronized distributed database meant to
keep track of data exchanges occurring
between different departments or individuals.
– There are no processing fees in Private
Blockchain transactions hence no currency or
tokens are required to function.
– Private Blockchains are not temper-resistant
as blocks are published by delegated nodes
within the network and organization can also
role back its Blockchain to any point in the
past.
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25. Dr M Nasir Mumtaz Bhutta www.kfu.edu.sa
Types of Blockchains – IV
• Consortium (Federated) Blockchains
– These are similar to Private Blockchains in a
sense that it is a permissioned network.
– It spans over multiple organizations and
maintain transparency among the individual
parties.
– Also, there is no processing fee and not
expensive to publish new blocks similar to
Private Blockchains.
– It is not entirely decentralized however,
provides auditability and reliability.
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26. Dr M Nasir Mumtaz Bhutta www.kfu.edu.sa
Types of Blockchains – V
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Source: [3]

27. Dr M Nasir Mumtaz Bhutta www.kfu.edu.sa
Open Research Directions
• This section only lists some of identified interesting
research directions for IoT domain as it is focus of our
research group.
• Public blockchains provide immutability through
decentralized consensus while private blockchains
preserve privacy within one organization but don’t
guarantee accountability. Recently, research efforts are
being focused on developing privacy-preserving
decentralized IoT blockchains.
• More solutions are being developed to ensure data
integrity in data stored on-chain and in off-chain storage
mechanisms.
• In general, there are quite a lot interesting challenges to
be solved and needs more exploration.
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28. Dr M Nasir Mumtaz Bhutta www.kfu.edu.sa
References
• [1] Melanie Swan, “Blockchain, Blueprint for a New Economy”, O’Reilly, Sebastopol, USA, 2015.
• [2] www.bitcoin.org Accessed on 9 April 2019.
• [3] Muhammad Salek Ali, Massimo Vecchio, Miguel Pincheira, Koustabh Dolui, Fabio Antonelli and Mubashir
Rehmani, “Application of Blockchains in the Internet of Things: A Comprehensive Survey”, IEEE Communications
Surveys & Tutorials, 2018, Early Access.
• [4] Junfeng Xie, Helen Tang, Tao Huang, F. Richard Yu, Renhao Xie, Jiang Liu and Yunjie Liu, “A Survey on
Blockchain Technology Applied to Smart Cities: Resaerch Issues and Challenges”, IEEE Communications
Surveys and Tutorials, 2019, Early Access.
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29. Dr M Nasir Mumtaz Bhutta www.kfu.edu.sa29
Thanks for listening !
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