Despite the significant potential of blockchain, it is also difficult to find a consistent description of what it really is. A Google search for “blockchain technical papers” returns nothing but white papers for the first three screens; not a single paper is peer-reviewed.10 One of the best discussions of the technology itself is from the National Institute of Standards and Technology, but at 50-plus pages, it is a bit much for a quick read.9
The purpose of this article is to look at the basics of blockchain: the individual components, how those components fit together, and what changes might be made to solve some of the problems with blockchain technology. This technology is far from monolithic; some of the techniques can be used (at surprising savings of resources and effort) if other parts are cut away.
Because there is no single set of technical specifications, some systems that claim to be blockchain instances will differ from the system described here. Much of this description is taken from the original blockchain paper.6 While details may differ, the main ideas stay the same. …
While there are lots of different ways to implement a blockchain, all have three major components. The first of these is the ledger, which is the series of blocks that are the public record of the transactions and the order of those transactions. Second is the consensus protocol, which allows all of the members of the community to agree on the values stored in the ledger. Finally, there is the digital currency, which acts as a reward for those willing to do the work of advancing the ledger. These components work together to provide a system that has the properties of stability, irrefutability, and distribution of trust that are the goals of the system.
Read more at ACM Queue
