Blockchain
Blockchain
Distributed Ledger Technology (DLT)
1. Overview of Blockchain, the Technology of Trust
flowchart LR
A["Centralized trust"] -- "Shift to decentralization and distributed ledgers" --> B["Blockchain technology"]
Definition: A distributed ledger technology (DLT) in which transaction information is jointly recorded and managed by network participants rather than a central server.
Characteristics: (Decentralization) A P2P network manages data through distributed consensus with no central authority, eliminating any single point of failure. (Immutability) Once recorded, data cannot be altered or deleted, guaranteeing transparency and data integrity. (Smart contracts) Smart Contracts that execute automatically once conditions are met enable business automation without intermediaries.
2. Blockchain Architecture and Core Mechanisms
A. Block and Chain Structure
flowchart LR
subgraph BLOCK1["Block N-1"]
H1["Previous Hash"]
T1["Transactions"]
N1["Nonce"]
end
subgraph BLOCK2["Block N"]
H2["Hash (N-1)"]
T2["Transactions"]
N2["Nonce"]
end
subgraph BLOCK3["Block N+1"]
H3["Hash (N)"]
T3["Transactions"]
N3["Nonce"]
end
BLOCK1 --> BLOCK2 --> BLOCK3
style BLOCK2 fill:#E3F2FD,stroke:#1976D2,stroke-width:2px
| Component | Description | Notes |
|---|---|---|
| Hash | The block’s unique identifier and means of integrity verification | Includes the previous block’s hash, forming the chain |
| Transactions | The set of transactions that occurred | Stored in a Merkle Tree structure |
| Consensus algorithm | Determines whether network participants’ data agrees | PoW, PoS, PBFT, etc. |
B. Consensus Algorithms and Network Types
flowchart TD
subgraph R1[" "]
direction LR
G1["Consensus algorithms<br/>PoW (Proof of Work)<br/>PoS (Proof of Stake)<br/>BFT (Byzantine Fault Tolerance)"]
G2["Network types<br/>Public (anyone can join)<br/>Private (permissioned entities)<br/>Consortium (operated by a group)"]
end
subgraph R2[" "]
direction LR
G3["Key applications<br/>Smart contracts (Solidity)<br/>NFT / STO (security tokens)<br/>DID (decentralized identity)"]
G4["Software platforms<br/>Ethereum / Hyperledger<br/>Corda / Polygon<br/>Layer 2 solutions"]
end
style G1 fill:#E3F2FD,stroke:#1976D2,color:#000
style G2 fill:#F3E5F5,stroke:#7B1FA2,color:#000
style G3 fill:#FFF3E0,stroke:#F57C00,color:#000
style G4 fill:#E8F5E9,stroke:#388E3C,color:#000
style R1 fill:none,stroke:none
style R2 fill:none,stroke:none
| Type | Participation Restriction | Speed | Key Examples |
|---|---|---|---|
| Public | None (permissionless) | Slow | Bitcoin, Ethereum |
| Private | Permission required | Fast | Hyperledger Fabric, R3 Corda |
| Consortium | Predefined group | Medium | Banking consortium networks, logistics tracking networks |
3. Expected Benefits and Industry Applications of Blockchain Adoption
| Category | Key Expected Benefits | Application Areas and Strategy |
|---|---|---|
| Reduced intermediary cost | No need for a trusted third party (TTP) | Overseas remittances, P2P transactions, distribution-history tracking |
| Data integrity | Tamper-proof history management | Voting systems, copyright management, food traceability |
| Business automation | Automatic settlement once conditions are met | Smart-contract-based automatic insurance payouts, supply chain management |
| Identity security | Self-sovereign identity proof | Mobile IDs using DID (Decentralized Identifier) |