The truth about

Blockchain
BY MARCO IANSITI AND KARIM R. LAKHANI
 What is Blockchain
◈ Originally block chain, is a continuously ◈ Blockchain is a sequence of blocks, which
growing list of records, calling blocks. It is holds a complete list of transaction
using cryptography to link and secure. records like conventional public ledger
which is illustrated in the diagram
◈ By design, block chain is inherently resistant
shown.
to modification of the data.
◈ This makes Blockchain potentially suitable for ◈ Think of Blockchain as an operating
system, such as Microsoft Windows and
the recording of events, medical records, and
bitcoin (like word or excel) as only one of
other records management activities, such as
the many applications that can be run on
identity management, transaction processing,
that operating system.
documenting provenance, food traceability or
voting.
Understanding how a Blockchain works

In case of difficulty in watching the video use the url given below
https://www.youtube.com/watch?v=SSo_EIwHSd4
 Transaction processing with blockchain
1 2 3

 Someone requests a  The requested transaction is  The network of nodes validate

transaction broadcast to a P2P network the transaction using
consisting of computers, known as cryptography.
nodes

6 5 4

 The transaction is complete  The new block is then added to  Once verified, this transaction is
the existing Blockchain. represented as a new block.
 Key characteristics of Blockchain
In conventional Transactions can Each user can Bitcoin
centralized be validated interact with the blockchain stores
transaction quickly and blockchain with a data about user
systems, each invalid generated balances based
transaction needs transactions address, which on the Unspent

Persistency:

Anonymity:

Auditability:
Decentralization:

to be validated would not be does not reveal Transaction

through the admitted and it is the real identity of Output (UTXO)
central trusted nearly impossible the user. model [2]:
agency, inevitably to delete or
resulting to the rollback
cost and the transactions once
performance they are included
bottlenecks. in the blockchain.
 Challenges and Recent Advances
Scalability Privacy leakage Selfish mining

• With the amount of • Blockchain can • Blockchain is

transactions preserve a certain susceptible to attacks
increasing day by amount of privacy of colluding selfish
day, the blockchain through the public miners. Based on
becomes bulky. Each key and private key selfish mining, many
node has to store all and blockchain other attacks have
transactions to cannot guarantee the been proposed to
validate them on the transactional privacy show that blockchain
blockchain because since the values of all is not so secure.
they have to check if transactions and
the source of the balances for each
current transaction is public key are
unspent or not. publicly visible.
 Conclusion
Blockchain has shown its potential for transforming traditional industry with its key
characteristics: decentralization, persistency, anonymity and auditability. In this paper,
we present a comprehensive overview on Blockchain.

We first give an overview of Blockchain technologies including Blockchain architecture

and key characteristics of Blockchain.

We then discuss the typical consensus algorithms used in Blockchain. We analyzed

and compared these protocols in different respects.

Furthermore, we listed some challenges and problems that would hinder Blockchain
development and summarized some existing approaches for solving these problems.
 Blockchain Applications
◈ Currently most blockchains
are used in the financial
domain, more and more
applications for different
fields are appearing.
◈ Traditional industries could
take blockchain into
consideration and apply
blockchain into their fields to
enhance their systems.