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Blockchain for Enterprise
Blockchain for Enterprise

Blockchain for Enterprise: Build scalable blockchain applications with privacy, interoperability, and permissioned features

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Blockchain for Enterprise

Building Blockchain Using Quorum

In the previous chapter, we saw what a DApp, DLT, and blockchain are. We also saw an overview of some popular blockchain-based DApps. At present, Ethereum is the most popular public DApp after Bitcoin. In this chapter, we will learn how to build permissioned blockchain-based DApps using Quorum. We will learn about Quorum in depth by exploring all the various consensus protocols it supports, its permissioning and privacy features, and finally, tools that enable us to quickly deploy a Quorum network.

In this chapter, we will cover the following topics:

  • User accounts in Ethereum
  • What is a Merkle tree and what is it used for in blockchain?
  • How do Istanbul Byzantine Fault Tolerant (IBFT) and Raft work?
  • Various mechanisms supported by Quorum to achieve privacy
  • Setting up constellation, Raft, and IBFT networks
  • Various third-party...

Overview of Quorum

Quorum is a permissioned decentralized platform that allows us to deploy DApps on top of it. DApps are created using one or more smart contracts. Smart contracts are programs that run exactly as programmed without any possibility of downtime, censorship, fraud, or third-party interface. In Quorum, smart contracts can be written in Solidity, LLL, or Serpent. Solidity is the preferred one. There can be multiple instances of a smart contract. Each instance is identified by a unique address, and you can deploy multiple DApps on the same Quorum network. 

In Ethereum, there is an internal currency called ether. To deploy or execute smart contracts, you need to pay ether to the miners and as Quorum is a fork of Ethereum, the same thing exists here too. But in Quorum, ether is valueless and a fixed number of ether is generated at the genesis block, and...

Ethereum accounts

To create an account, we just need an asymmetric key pair. There are various algorithms, such as Rivest–Shamir–Adleman (RSA) and Elliptic Curve Cryptography (ECC) for generating asymmetric key pairs. Ethereum uses ECC. ECC has various curves. These curves have a different speed and security. Ethereum uses  secp256k1 curves. To go in to  ECC and it's curves will require mathematical knowledge, and it's not necessary to understand it in depth to build DApps using Ethereum.

Ethereum uses 256-bit encryption. An Ethereum private and public key is a 256-bit number. As processors cannot represent such big numbers therefore it's always encoded as a hexadecimal string of length 64. 

Every account is represented by an address. Once we have the keys we need to generate the address, here is the procedure to generate the...

What are Ethereum transactions?

A transaction is a data package to transfer ether from an account to another account or contract, invoke methods of a contract, or deploy a new contract. A transaction is using Elliptic Curve Digital Signature Algorithm (ECDSA), which is a digital signature algorithm based on ECC. A transaction contains a signature identifying the sender and proving their intention, the amount of ether to transfer, the maximum number of computational steps the transaction execution is allowed to take (called a gas limit), and the cost the sender of the transaction is willing to pay for each computational step (called the gas price). The product of the gas used and the gas price is called the transaction fees.

In permissioned networks, ether is valueless. In a Quorum network, ether is supplied in the genesis block and is not generated dynamically at runtime...

What is a Merkle tree?

Before we get into what a Merkle root in blocks of blockchain is, let's understand the structure of blockchain. A block is made up of two parts; the first part is the block header and the second part is the set of transactions of that block. The block header contains information such as the previous block hash (it's actually a hash of the previous block's header), timestamp, Merkle root, and information related to achieving consensus. 

At the time of sync, while downloading a block a node downloads the block header and the block's transactions. Now, how would the receiving node know that these transactions are actually part of that block and are in the correct order? Every block is identified by a unique hash, but the block hash is not part of the block header and is uniquely calculated by every node after downloading the block;...

What is forking in blockchain?

A fork is said to have happened when there is a conflict among the nodes regarding the validity of the blockchain, that is, more than one blockchain happens to be in the network. There are three kinds of fork: regular, soft, and hard.

A regular fork is said to be happening when there are two or more blocks at the same height. It is a temporary conflict and is resolved automatically. This is resolved by nodes by selecting the most accurate blockchain. For example, in proof-of-work, if two miners mine a block at the same time then it creates a regular fork. And, this is resolved by selecting the blockchain with the highest difficulty as the most accurate one. 

A soft fork, by contrast, is any change to the blockchain protocol that's backward- compatible. Say, instead of 2 MB blocks, a new rule might only allow 1 MB blocks. Non-upgraded...

Raft consensus

Let's see how the Raft consensus protocol works at a level which will make us comfortable enough to build DApps. We won't go in depth into Raft as it's not necessary.

Raft is used in a semi-trusted network, and there is a desire for faster blocktimes (on the order of milliseconds instead of seconds) and single confirmation (the absence of regular forks).

Every node in the network keeps a list of all other nodes in the network regardless of whether they are up and running or not. A server in a Raft cluster is either a leader or a follower, and can be a candidate in the case of an election, which happens when the leader is unavailable. There can be only one leader at a time. The leader is responsible for creating and sending blocks to the followers. It regularly informs the followers of its existence by sending a heartbeat...

Istanbul Byzantine Fault Tolerence

Let's see how the IBFT consensus protocol works at a level that will make us comfortable enough to build DApps. We won't go in depth into IBFT as it's not necessary.

IBFT is a type of proof-of-authority protocol. In IBFT, there are two kinds of nodes: validator nodes (referred to as authorities when they are linked to physical entities) and regular nodes. Authority nodes are the ones that create blocks. IBFT is used in a network where there is a need for BFT, blocktime up to a few seconds is good enough, and we need a single confirmation (the absence of regular forks).

The system can tolerate at most F Byzantium or crashed nodes in a N validator nodes network that is, F = (N-1)/3 . The default block time in IBFT is between one to ten seconds and Quorum does allow you to customize this.

In IBFT, a round...

Overview of Quorum


Quorum is a permissioned decentralized platform that allows us to deploy DApps on top of it. DApps are created using one or more smart contracts. Smart contracts are programs that run exactly as programmed without any possibility of downtime, censorship, fraud, or third-party interface. In Quorum, smart contracts can be written in Solidity, LLL, or Serpent. Solidity is the preferred one. There can be multiple instances of a smart contract. Each instance is identified by a unique address, and you can deploy multiple DApps on the same Quorum network. 

In Ethereum, there is an internal currency called ether. To deploy or execute smart contracts, you need to pay ether to the miners and as Quorum is a fork of Ethereum, the same thing exists here too. But in Quorum, ether is valueless and a fixed number of ether is generated at the genesis block, and no more ether can be generated after that. Both user accounts and smart contracts can hold ether. In Quorum, you need to have some...

Ethereum accounts


To create an account, we just need an asymmetric key pair. There are various algorithms, such as Rivest–Shamir–Adleman (RSA) and Elliptic Curve Cryptography (ECC) for generating asymmetric key pairs. Ethereum uses ECC. ECC has various curves. These curves have a different speed and security. Ethereum uses  secp256k1 curves. To go in to  ECC and it's curves will require mathematical knowledge, and it's not necessary to understand it in depth to build DApps using Ethereum.

Ethereum uses 256-bit encryption. An Ethereum private and public key is a 256-bit number. As processors cannot represent such big numbers therefore it's always encoded as a hexadecimal string of length 64. 

Every account is represented by an address. Once we have the keys we need to generate the address,here is the procedure to generate the address, and here is the procedure to generate the address from the public key:

  1. First, generate the Keccak-256 hash of the public key. It will give you a 256-bit number...

What are Ethereum transactions?


A transaction is a data package to transfer ether from an account to another account or contract, invoke methods of a contract, or deploy a new contract. A transaction is using Elliptic Curve Digital Signature Algorithm (ECDSA), which is a digital signature algorithm based on ECC. A transaction contains a signature identifying the sender and proving their intention, the amount of ether to transfer, the maximum number of computational steps the transaction execution is allowed to take (called a gas limit), and the cost the sender of the transaction is willing to pay for each computational step (called the gas price). The product of the gas used and the gas price is called the transaction fees.

In permissioned networks, ether is valueless. In a Quorum network, ether is supplied in the genesis block and is not generated dynamically at runtime. You need to supply ether in the genesis block. You need to provide gas to prevent attacks, such as infinite loops. Ether...

What is a Merkle tree?


Before we get into what a Merkle root in blocks of blockchain is, let's understand the structure of blockchain. A block is made up of two parts; the first part is the block header and the second part is the set of transactions of that block. The block header contains information such as the previous block hash (it's actually a hash of the previous block's header), timestamp, Merkle root, and information related to achieving consensus. 

At the time of sync, while downloading a block a node downloads the block header and the block's transactions. Now, how would the receiving node know that these transactions are actually part of that block and are in the correct order? Every block is identified by a unique hash, but the block hash is not part of the block header and is uniquely calculated by every node after downloading the block; therefore we cannot use the idea of a block hash. Instead, we can rely on something like a transactions hash; a hash stored in the block header...

What is forking in blockchain?


A fork is said to have happened when there is a conflict among the nodes regarding the validity of the blockchain, that is, more than one blockchain happens to be in the network. There are three kinds of fork: regular, soft, and hard.

A regular fork is said to be happening when there are two or more blocks at the same height. It is a temporary conflict and is resolved automatically. This is resolved by nodes by selecting the most accurate blockchain. For example, in proof-of-work, if two miners mine a block at the same time then it creates a regular fork. And, this is resolved by selecting the blockchain with the highest difficulty as the most accurate one. 

A soft fork, by contrast, is any change to the blockchain protocol that's backward- compatible. Say, instead of 2 MB blocks, a new rule might only allow 1 MB blocks. Non-upgraded nodes will still see the new transactions as valid (1 MB is less than 2 MB in this example). However, if non-upgraded nodes continue...

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Key benefits

  • Build permissioned enterprise-grade blockchain applications from scratch
  • Implement Blockchain-as-a-Service to enterprises in terms of deployment and security
  • Achieve privacy in blockchains using proxy re-encryption algorithms

Description

The increasing growth in blockchain use is enormous, and it is changing the way business is done. Many leading organizations are already exploring the potential of blockchain. With this book, you will learn to build end-to-end enterprise-level decentralized applications and scale them across your organization to meet your company's needs. This book will help you understand what DApps are and how the blockchain ecosystem works, via real-world examples. This extensive end-to-end book covers every blockchain aspect for business and for developers. You will master process flows and incorporate them into your own enterprise. You will learn how to use J.P. Morgan’s Quorum to build blockchain-based applications. You will also learn how to write applications that can help communicate enterprise blockchain solutions. You will learn how to write smart contracts that run without censorship and third-party interference. Once you've grasped what a blockchain is and have learned about Quorum, you will jump into building real-world practical blockchain applications for sectors such as payment and money transfer, healthcare, cloud computing, supply chain management, and much more.

Who is this book for?

This book is for innovators, digital transformers, and blockchain developers who want to build end-to-end, decentralized applications using the blockchain technology. If you want to scale your existing blockchain system across the enterprise, you will find this book useful, too. It adopts a practical approach to solving real problems in enterprises using a blend of theory and practice.

What you will learn

  • Learn how to set up Raft/IBFT Quorum networks
  • Implement Quorum s privacy and security features
  • Write, compile, and deploy smart contracts
  • Learn to interact with Quorum using the web3.js JavaScript library
  • Learn how to execute atomic swaps between different networks
  • Build a secured Blockchain-as-a-Service for efficient business processes
  • Achieve data privacy in blockchains using proxy re-encryption
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Table of Contents

9 Chapters
What are Decentralized Applications? Chevron down icon Chevron up icon
Building Blockchain Using Quorum Chevron down icon Chevron up icon
Writing Smart Contracts Chevron down icon Chevron up icon
Getting Started with web3.js Chevron down icon Chevron up icon
Building Interoperable Blockchains Chevron down icon Chevron up icon
Building Quorum as a Service Platform Chevron down icon Chevron up icon
Building a DApp for Digitizing Medical Records Chevron down icon Chevron up icon
Building a Payment Solution for Banks Chevron down icon Chevron up icon
Other Books You May Enjoy Chevron down icon Chevron up icon

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