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Mastering Blockchain
Mastering Blockchain

Mastering Blockchain: Distributed ledger technology, decentralization, and smart contracts explained , Second Edition

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Mastering Blockchain

Decentralization

Decentralization is not a new concept. It has been used in strategy, management, and the government, for a long time. The basic idea of decentralization is to distribute control and authority to the peripheries of an organization instead of one central body being in full control of the organization. This configuration produces several benefits for organizations, such as increased efficiency, expedited decision making, better motivation, and a reduced burden on top management.

In this chapter, we will discuss the concept of decentralization in the context of blockchain. The fundamental basis of blockchain is that no single central authority is in control, and, in this chapter, we will present examples of various methods of decentralization and routes to achieve this. Furthermore, we will discuss the decentralization of the blockchain ecosystem, decentralized applications...

Decentralization using blockchain

Decentralization is a core benefit and service provided by blockchain technology. By design, blockchain is a perfect vehicle for providing a platform that does not need any intermediaries and that can function with many different leaders chosen via consensus mechanisms. This model allows anyone to compete to become the decision-making authority. This competition is governed by a consensus mechanism, and the most commonly used method is known as Proof of Work (PoW).

Decentralization is applied in varying degrees from a semi-decentralized model to a fully decentralized one depending on the requirements and circumstances. Decentralization can be viewed from a blockchain perspective as a mechanism that provides a way to remodel existing applications and paradigms, or to build new applications, in order to give full control to users.

Information and...

Methods of decentralization

Two methods can be used to achieve decentralization: disintermediation and competition (Contest-driven decentralization). These methods will be discussed in detail in the sections that follow.

Disintermediation

The concept of disintermediation can be explained with the aid of an example. Imagine that you want to send money to a friend in another country. You go to a bank who, for a fee, will transfer your money to the bank in that country. In this case, the bank maintains a central database that is updated, confirming that you have sent the money. With blockchain technology, it is possible to send this money directly to your friend without the need for a bank. All you need is the address of your...

Routes to decentralization

Even though there were systems that pre-existed blockchain and Bitcoin, including BitTorrent and the Gnutella file sharing system, which to a certain degree could be classified as decentralized. However, with the advent of blockchain technology, many initiatives are now being taken to leverage this new technology for achieving decentralization. The Bitcoin blockchain is typically the first choice for many, as it has proven to be the most resilient and secure blockchain and has a market cap of nearly $145 billion at the time of this writing. Alternatively, other blockchains, such as Ethereum, serve as the tool of choice for many developers for building decentralized applications. As compared to Bitcoin, Ethereum has become a more prominent choice because of the flexibility it allows for programming any business logic into the blockchain by using smart...

Blockchain and full ecosystem decentralization

To achieve complete decentralization, it is necessary that the environment around the blockchain also be decentralized. The blockchain is a distributed ledger that runs on top of conventional systems. These elements include storage, communication, and computation. There are other factors, such as identity and wealth, which are traditionally based on centralized paradigms, and there's a need to decentralize these aspects as well in order to achieve a sufficiently decentralized ecosystem.

Storage

Data can be stored directly in a blockchain, and with this fact it achieves decentralization. However, a significant disadvantage of this approach is that a blockchain is not suitable...

Smart contracts

A smart contract is a decentralized program. Smart contracts do not necessarily need a blockchain to run; however, due to the security benefits that blockchain technology provides, blockchain has become a standard decentralized execution platform for smart contracts.

A smart contract usually contains some business logic and a limited amount of data. The business logic is executed if specific criteria are met. Actors or participants in the blockchain use these smart contracts, or they run autonomously on behalf of the network participants.

More information on smart contracts will be provided in Chapter 9, Smart Contracts.

Decentralized Organizations

DOs are software programs that run on a blockchain and are based on the idea of actual organizations with people and protocols. Once a DO is added to the blockchain in the form of a smart contract or a set of smart contracts, it becomes decentralized and parties interact with each other based on the code defined within the DO software.

Decentralized Autonomous Organizations

Just like DOs, a Decentralized Autonomous Organization (DAO) is also a computer program that runs atop a blockchain and embedded within it are governance and business logic rules. DAO and DO are fundamentally the same thing. The main difference, however, is that DAOs are autonomous, which means that they are fully automated and...

Platforms for decentralization

Today, there are many platforms available for decentralization. In fact, the fundamental feature of blockchain networks is to provide decentralization. Therefore, any blockchain network such as Bitcoin, Ethereum, Hyperledger Fabric, or Quorum can be used to provide decentralization service. Many organizations around the world have introduced platforms that promise to make distributed application development easy, accessible, and secure. Some of these platforms are described next.

Ethereum

Ethereum tops the list as being the first blockchain to introduce a Turing-complete language and the concept of a virtual machine. This is in stark contrast to the limited scripting language in Bitcoin and many...

Summary

In this chapter, we introduced the concept of decentralization, which is the core service offered by blockchain technology. Although the concept of decentralization is not new, it has gained renewed significance in the world of the blockchain. Consequently, various applications based on a decentralized architecture have recently been introduced.

We began the chapter with an introduction to the concept of decentralization. Next, we discussed decentralization from the blockchain perspective. Moreover, we introduced you to ideas relating to the different layers of decentralization in the blockchain ecosystem and to the several new concepts and terms that have emerged with the advent of blockchain technology and decentralization from the blockchain perspective, including DAOs, DACs, and DApps. Finally, we looked at few examples of decentralized applications.

In the next chapter...

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Key benefits

  • Get to grips with the underlying technical principles and implementations of blockchain
  • Build powerful applications using Ethereum to secure transactions and create smart contracts
  • Explore cryptography, mine cryptocurrencies, and solve scalability issues with this comprehensive guide

Description

Publisher's Note: This edition from 2018 is outdated and does not cover the latest insights on consensus algorithms, Ethereum 2.0, tokenization, and enterprise blockchains. A new and updated edition of this book that includes all the newest developments and improvements in Blockchain including the above topics is now available. A blockchain is a distributed ledger that is replicated across multiple nodes and enables immutable, transparent and cryptographically secure record-keeping of transactions. The blockchain technology is the backbone of cryptocurrencies, and it has applications in finance, government, media and almost all other industries. Mastering Blockchain, Second Edition has been thoroughly updated and revised to provide a detailed description of this leading technology and its implementation in the real world. This book begins with the technical foundations of blockchain technology, teaching you the fundamentals of distributed systems, cryptography and how it keeps data secure. You will learn about the mechanisms behind cryptocurrencies and how to develop applications using Ethereum, a decentralized virtual machine. You will also explore different other blockchain solutions and get an introduction to business blockchain frameworks under Hyperledger, a collaborative effort for the advancement of blockchain technologies hosted by the Linux Foundation. You will also be shown how to implement blockchain solutions beyond currencies, Internet of Things with blockchain, blockchain scalability, and the future scope of this fascinating and powerful technology.

Who is this book for?

This book will appeal to those who wish to build fast, highly secure, transactional applications. It targets people who are familiar with the concept of blockchain and are comfortable with a programming language.

What you will learn

  • Master the theoretical and technical foundations of the blockchain technology
  • Understand the concept of decentralization, its impact, and its relationship with blockchain technology
  • Master how cryptography is used to secure data - with practical examples
  • Grasp the inner workings of blockchain and the mechanisms behind bitcoin and alternative cryptocurrencies
  • Understand the theoretical foundations of smart contracts
  • Learn how Ethereum blockchain works and how to develop decentralized applications using Solidity and relevant development frameworks
  • Identify and examine applications of the blockchain technology - beyond currencies
  • Investigate alternative blockchain solutions including Hyperledger, Corda, and many more
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Table of Contents

20 Chapters
Blockchain 101 Chevron down icon Chevron up icon
Decentralization Chevron down icon Chevron up icon
Symmetric Cryptography Chevron down icon Chevron up icon
Public Key Cryptography Chevron down icon Chevron up icon
Introducing Bitcoin Chevron down icon Chevron up icon
Bitcoin Network and Payments Chevron down icon Chevron up icon
Bitcoin Clients and APIs Chevron down icon Chevron up icon
Alternative Coins Chevron down icon Chevron up icon
Smart Contracts Chevron down icon Chevron up icon
Ethereum 101 Chevron down icon Chevron up icon
Further Ethereum Chevron down icon Chevron up icon
Ethereum Development Environment Chevron down icon Chevron up icon
Development Tools and Frameworks Chevron down icon Chevron up icon
Introducing Web3 Chevron down icon Chevron up icon
Hyperledger Chevron down icon Chevron up icon
Alternative Blockchains Chevron down icon Chevron up icon
Blockchain – Outside of Currencies Chevron down icon Chevron up icon
Scalability and Other Challenges Chevron down icon Chevron up icon
Current Landscape and What's Next Chevron down icon Chevron up icon
Another Book You May Enjoy Chevron down icon Chevron up icon

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William Slater III Jun 14, 2018
Full star icon Full star icon Full star icon Full star icon Full star icon 5
If you want to learn Blockchain or if you think you really understand Blockchain, check out this excellent book.I bought Imran Bashir’s Mastering Blockchain, 2nd Edition because I knew it was a complete update to his first edition, and because I wanted to keep up with what’s happening in the rapidly moving world of Blockchain Development. Needless to say, I am a huge fan of Blockchain and the promise it has for trusted, decentralized distributed computing transactions.I have been pleasantly surprised and extremely satisfied with this invaluable tome. It could have been titled “The Bible of Blockchain”, because that’s basically what it is. No serious Blockchain Developer or Blockchain Project Manager should be without this book. With its wealth of information on every facet of Blockchain, it is easily worth more than 10 times the purchase price. That is not an exaggeration and here’s why:1. The author, who is clearly a great author and a very experienced practitioner of all areas Blockchain development.2. It is authoritative.3. Easy to read.4. Extremely thorough.5. Provides useful Blockchain knowledge that is immediately useful to all Blockchain professionals from the novice to the journeyman and master.What really stands out:The author’s explanation of Blockchain, what it is, its components, and how it works is some of the clearest and most thorough I have seen.His incredible explanations of the details about Ethereum and the Ethereum Development environment works. And his explanations of the Ethereum Virtual Machine and Ethereum Messaging are the best and clearest I have seen.The author is such a great teacher that he suggests tricks like installing Wireshark so that the Blockchain engineer can actually see the network events between clients and servers happening in real-time.The author generously defines and suggests a full spectrum of Blockchain tools from Wallet Managers to Blockchain Browsers to development environments and that is much appreciated.His though coverage of major cryptocurrencies shows that he his fair, knowledgeable, passionate about providing as much information as possible to the reader.In Summary:I love this book and have recommended it to everyone I know who is interested in Blockchain. I also teach Blockchain at the graduate school level and have used this book in my course development and teaching, for my students and the interns I am working with this summer of 2018. Quite simply, there is nothing better on the market.Special thanks to the author, Imran Bashir, for his tireless work that produced this masterpiece, and to everyone at PACKT for publishing it. It is the best Blockchain Book of 2018.
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Aviel Sep 15, 2018
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This book is well written, topics are ordered beautifully, the explanations are comprehensive and simple.I would recommend anyone interested in blockchains, regardless the level of interest, to buy this book, many aspects of blockcahins, technical and nontechnical are explained simply.
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ST Oct 22, 2019
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I have read a number of popular books on blockchain. This is the first book that serves as a text on blockchain. Excellent, clear presentation.
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Ele Liao Jul 04, 2019
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an easy read for a very comprehensive context in the blockchain.
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Orce Dec 27, 2019
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Highly Recommended. ITEM AS DESCRIBED AND SHIPPED QUICKLY. Thanks.
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