Blockchain Training

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Bitcoin. Ethereum. Hyperledger. With all the cryptocurrency buzzwords flying around, it is hard to get to the core of all of these technologies. The essential piece that serves as the underlying mechanism of all these technologies is blockchain. Blockchain is a decentralized, trustless, distributed ledger technology that was popularized by the Bitcoin global cryptocurrency platform. Athav Technologies provides training to cover the fundamentals of blockchain technology, including the three core layers [blockchain, data, and application]  and the three types of blockchains, and Enterprise solution design.

The Three Layers:

Blockchain:

  • Used for: 'Pointers'
  • Pillars: #2 - Decentralized/P2P, and #3 - Immutability and Data Integrity

The Blockchain Layer doesn't need; Storage, Business Logic (complex permission structures),Data Storage.

Instead of trying to achieve all 5 key pillars (solution design requirements) on one public network, we accept the fact that public Blockchains are a terrible storage solution and will struggle to scale.

A public Blockchain is not dropbox, nor is it a conventional database capable of running a billion + transactions per week. Therefore we will not see bitcoin or Ethereum (as they are designed today), power global trade or the Internet-of-Things on their own.

'Pointers' or 'hashes' (see Merkle-Trees) are transactions which do not disclose any valuable information to the public, who can also access open Blockchains like bitcoin. However, for people or machines that know which addresses to track for a new hash, these pointers offer 2 uses:

1. Notification to a status change or new entry made on the secondary, private blockchain, in the next layer -  The Data-Store Layer (see below).
2. Validate the integrity of the data placed in said private chain.

Data-Store:

  • Used for: Storage, Business Logic (permission structures), Data Storage, etc
  • Pillars: #1 - Permissioned/Private, #4 - Scalability and #5 - Security

The Data-Store Layer doesn't need; Open-Access or limited transaction payloads due to block sizes or other public blockchain constraints.
In an Enterprise Blockchain Design, very limited data is recorded on the public Blockchain. The majority of data is recorded in a private data store that behaves like a distributed relational database. The data-store is configured to auto-hash transaction sets onto the public chain in bulk, at any required interval.

The data recorded on the blockchain serves as a secure way to ensure that the private data store is in sync with any permissioned participant's master copy, and as a way for trusted third-parties to discover when there are new records that are relevant to the accounts they are entitled to monitor.

Application:

  • Used for: Processing the first two layers into a useful business application.
  • Pillars: Non

The Data-Store Layer doesn't need; Any of the Blockchain or Data-Store layer functions or considerations.
The Application Layer is the 'connector' into and out of the Data-Store (and from there the public Blockchain of choice, for the underwriting of data integrity).

3 types of Blockchains:

# Public Blockchains

State of the art public Blockchain protocols based on proof of work (POW) consensus algorithms are open source and not permissioned, which means that everyone can be part of them and explore them. (1) Anyone can download the code and start running a public node on their local device, validating transactions in the network, thus participating in the consensus process – the process for determining what blocks get added to the chain and what the current state is. (2) Anyone in the world can send transactions through the network and expect to see them included in the blockchain if they are valid. (3) Anyone can read transaction on the public block explorer.
ExamplesBitcoinEthereum, Monero, Dash, Litecoin, Dodgecoin, etc.
Effects: (1) Potential to disrupt current business models through disintermediation (2) No infrastructure costs! No need to maintain servers or system admins radically reduces the costs of creating and running decentralized applications (dApps).

# Federated Blockchains or Consortium Blockchains

Federated Blockchains operate under the leadership of a group. As opposed to public Blockchains, they don’t allow any person with an internet connection to participate in the verification of transactions process. Federated Blockchains are faster (higher scalability) and provide more transaction privacy. Consortium blockchains are mostly used in the banking sector. The consensus process is controlled by a pre-selected set of nodes; for example, one might imagine a consortium of 15 financial institutions, each of which operates a node and of which 10 must sign every block in order for the block to be valid. The right to read the blockchain may be public, or restricted to the participants.
ExampleR3 (Banks), EWF (Energy), B3i (Insurance), Corda
Effects: (1) reduces transaction costs and data redundancies and replaces legacy systems, simplifying document handling and getting rid of semi manual compliance mechanisms. (2) in that sense it can be seen as equivalent to SAP in the 1990’s: reduces costs, but not disruptive!

# Private Blockchains

Write permissions are kept centralized to one organization. Read permissions may be public or restricted to an arbitrary extent. Likely applications include database management, auditing, and more that are internal to a single company, and so public readability may in many cases not be necessary at all, though in other cases public audit ability is desired. Private blockchains are a way of taking advantage of blockchain technology by setting up groups and participants who can verify transactions internally. This puts you at the risk of security breaches just like in a centralized system, as opposed to public blockchain secured by game theoretic incentive mechanisms. However, private blockchains have their use case, especially when it comes to scalability and state compliance of data privacy rules and other regulatory issues. They have certain security advantages, and other security disadvantages (as stated before).
ExamplesMONAXMultichain
Effects: (1) reduces transaction costs and data redundancies and replaces legacy systems, simplifying document handling and getting rid of semi manual compliance mechanisms. (2) in that sense it can be seen as equivalent to SAP in the 1990’s: reduces costs, but not disruptive!

The 5 Pillars of Enterprise Blockchain Solution design:

1. Permissioned/Private
Writing records is exclusive to members, third parties can be granted read access, the general public excluded. The permissions architecture goes beyond ‘access = everything’ and allows third party access to specific raw data, as deemed appropriate, for interoperability and application requirements.
2. Decentralized/P2P
Allowing for equal control over the shared database, between all permissioned participants, and of equal importance. Distributing the number of full copies (nodes) of the ledger to maximize probability that there will always be a complete record in existence and available for those with permission to access.
3. Immutability and Data Integrity
Records are guaranteed to be cryptographically secure, with no possibility of bad actors threatening data integrity.
4. Scalability
The ability to secure trillions of transactions or records without compromising the networks synchronization, security, accessibility or data integrity.

Please reach out to us if you would like more information on Blockchain training!