Blockchain challenges and opportunities: A survey

Abstract and Figures

Blockchain has numerous benefits such as decentralisation, persistency, anonymity and auditability. There is a wide spectrum of blockchain applications ranging from cryptocurrency, financial services, risk management, internet of things (IoT) to public and social services. Although a number of studies focus on using the blockchain technology in various application aspects, there is no comprehensive survey on the blockchain technology in both technological and application perspectives. To fill this gap, we conduct a comprehensive survey on the blockchain technology. In particular, this paper gives the blockchain taxonomy, introduces typical blockchain consensus algorithms, reviews blockchain applications and discusses technical challenges as well as recent advances in tackling the challenges. Moreover, this paper also points out the future directions in the blockchain technology.
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352 Int. J. Web and Grid Services, Vol. 14, No. 4, 2018
Blockchain challenges and opportunities: a survey
Zibin Zheng and Shaoan Xie
School of Data and Computer Science,
Sun Yat-sen University,
Guangzhou 510275, China
Hong-Ning Dai
Faculty of Information Technology,
Macau University of Science and Technology,
Macau SAR
Xiangping Chen*
Institute of Advanced Technology,
National Engineering Research Center of Digital Life,
Sun Yat-sen University,
Guangzhou 510275, China
*Corresponding author
Huaimin Wang
National Laboratory for Parallel and Distributed Processing,
National University of Defense Technology,
Changsha 410073, China
Abstract: Blockchain has numerous benefits such as decentralisation,
persistency, anonymity and auditability. There is a wide spectrum of blockchain
applications ranging from cryptocurrency, financial services, risk management,
internet of things (IoT) to public and social services. Although a number
of studies focus on using the blockchain technology in various application
aspects, there is no comprehensive survey on the blockchain technology in
both technological and application perspectives. To fill this gap, we conduct a
comprehensive surveyon the blockchain technology. In particular, this paper gives
the blockchain taxonomy, introduces typical blockchain consensus algorithms,
reviews blockchain applications and discusses technical challenges as well as
recent advances in tackling the challenges. Moreover, this paper also points out
the future directions in the blockchain technology.
Copyright © 2018 Inderscience Enterprises Ltd.
Blockchain challenges and opportunities: a survey 353
Keywords: blockchain; consensus algorithms; cryptocurrency; IoT; internet of
things; smart contract.
Reference to this paper should be made as follows: Zheng, Z., Xie, S.,
Dai, H-N., Chen, X. and Wang, H. (2018) ‘Blockchain challenges and
opportunities: a survey’, Int. J. Web and Grid Services, Vol. 14, No. 4, pp.352–375.
Biographical notes: Zibin Zheng is an Associate Professor at Sun Yat-sen
University, Guangzhou, China. He received PhD from the Chinese University of
Hong Kong in 2011. He received ACM SIGSOFT Distinguished Paper Award
at ICSE’10, Best Student Paper Award at ICWS’10, and IBM PhD Fellowship
Award. His research interests include blockchain, services computing, software
engineering, and data mining.
Shaoan Xie is a graduate student at Sun Yat-Sen University, China. He received
his Bachelor degree in Computer Science at Sun yat-sen University in 2016. His
current research interests include blockchain and data mining.
Hong-Ning Dai is an Associate Professor in Faculty of Information Technology
at Macau University of Science and Technology. He obtained his PhD in
Computer Science and Engineering from the Department of Computer Science
and Engineering at the Chinese University of Hong Kong in 2008. His research
interests include wireless networks, mobile computing, and distributed systems.
Xiangping Chen is a Research Associate at Sun Yat-sen University, Guangzhou,
China. She received her PhD from Peking University in 2010. Her research
interests include data-driven software engineering, program comprehension, and
web engineering.
Huaimin Wang received his PhD in Computer Science from the National
University of Defense Technology (NUDT) in 1992. He has been awarded
the Chang Jiang Scholars Professor by Ministry of Education of China, and
the National Science Fund for Distinguished Young Scholars, and so on. He
has published more than 100 research papers in international conferences and
journals. His current research interests include middleware, software agent,
trustworthy computing.
This paper is a revised and expanded version of a paper entitled ‘An overview of
blockchain technology: architecture, consensus, and future trends’ presented at
2017 International Congress on Big Data, Honolulu, USA, 25–30 June, 2017.
1 Introduction
Recently, cryptocurrency has attracted extensive attentions from both industry and
academia. Bitcoin that is often called the first cryptocurrency has enjoyed a huge
success with the capital market reaching 10 billion dollars in 2016 (coindesk, 2016).
The blockchain is the core mechanism for the Bitcoin. Blockchain was first proposed
354 Z. Zheng et al.
in 2008 and implemented in 2009 (Nakamoto, 2008). Blockchain could be regarded as
a public ledger, in which all committed transactions are stored in a chain of blocks.
This chain continuously grows when new blocks are appended to it. The blockchain
technology has the key characteristics, such as decentralisation, persistency, anonymity
and auditability. Blockchain can work in a decentralised environment, which is enabled by
integrating several core technologies such as cryptographic hash, digital signature (based
on asymmetric cryptography) and distributed consensus mechanism. With blockchain
technology, a transaction can take place in a decentralised fashion. As a result, blockchain
can greatly save the cost and improve the efficiency.
Although Bitcoin is the most famous application blockchain application, blockchain can
be applied into diverse applications far beyond cryptocurrencies. Since it allows payments
to be finished without any bank or any intermediary, blockchain can be used in various
financial services such as digital assets, remittance and online payment (Peters et al., 2015;
Foroglou and Tsilidou, 2015). Additionally, blockchain technology is becoming one of the
most promising technologies for the next generation of internet interaction systems, such
as smart contracts (Kosba et al., 2016), public services (Akins et al., 2013), internet of
things (IoT) (Zhang and Wen, 2015), reputation systems (Sharples and Domingue, 2015)
and security services (Noyes, 2016a).
Despite the fact that the blockchain technology has great potential for the construction of
the future internet systems, it is facing a number of technical challenges. Firstly, scalability
is a huge concern. Bitcoin block size is limited to 1 MB now and a block is mined about every
10 min. Subsequently, the Bitcoin network is restricted to a rate of 7 transactions per second,
which is incapable of dealing with high-frequency trading. However, larger blocks mean
larger storage space and slower propagation in the network. This will lead to centralisation
gradually as users would like to maintain such a large blockchain. Therefore the tradeoff
between block size and security has become a challenge. Secondly, it has been proved
that miners can achieve larger revenue than their fair share through selfish mining strategy
(Eyal and Sirer, 2014). Miners hide their mined blocks for more revenue in the future. In
that way, branches can take place frequently; this hinders blockchain development. Hence
some solutions need to be put forward to fix this problem. Moreover, it has been shown
that privacy leakage can also happen in blockchain even when users only make transactions
with their public key and private key (Biryukov et al., 2014). User’s real IP address could
even be tracked. Furthermore, current consensus algorithms like proof of work (PoW) or
proof of stake (PoS) are facing some serious problems. For example, PoW wastes too much
electricity energy while the phenomenon that the rich get richer could appear in the PoS
consensus process. These challenges need to be addressed in the blockchain technology
There is a substantial body of literature on blockchain from various sources, such as
blogs, wikis, forum posts, codes, conference proceedings and journal papers. Tschorsch
and Scheuermann (2016) made a technical survey about decentralised digital currencies
including Bitcoin. Compared with (Tschorsch and Scheuermann, 2016), our paper focuses
on blockchain technology instead of digital currencies. Nomura Research Institute made
Blockchain challenges and opportunities: a survey 355
a technical report about blockchain (NRI, 2015). In contrast to (NRI, 2015), our paper
focuses on state-of-art blockchain studies including recent advances and future trends.
This paper is an extended version of the work published in Zheng et al. (2017) with the
substantial extensions on blockchain technical details, consensus algorithms, applications
of blockchains, research challenges and future directions.
The rest of this paper is organised as follows. Section 2 introduces blockchain
architecture. Section 3 shows typical consensus algorithms used in the blockchain. Section 4
introduces several typical blockchain applications. Section 5 summarises the technical
challenges and the recent advances in this area. Section 6 discusses some possible future
directions and Section 7 concludes the paper.
2 Blockchain architecture
The blockchain is a sequence of blocks, which holds a complete list of transaction records
like conventional public ledger (Lee Kuo Chuen, 2015). Figure 1 illustrates an example of
a blockchain. Each block points to the immediately previous block via a reference that is
essentially a hash value of the previous block called parent block. It is worth noting that
uncle blocks (children of the block’s ancestors) hashes would also be stored in ethereum
blockchain (Buterin, 2014). The first block of a blockchain is called genesis block which
has no parent block. We then introduce the block structure in Section 2.1, a digital signature
mechanism in Section 2.2. We also summarise blockchain key characteristics in Section 2.3.
Blockchain taxonomy is showed in Section 2.4.
Figure 1 An example of blockchain which consists of a continuous sequence of blocks (see online
version for colours)
2.1 Block
A block consists of the block header and the block body as shown in Figure 2. In particular,
the block header includes:
Block version: indicates which set of block validation rules to follow.
Parent block hash: a 256-bit hash value that points to the previous block.
Merkle tree root hash: the hash value of all the transactions in the block.
Timestamp: current timestamp as seconds since 1970-01-01T00:00 UTC.
nBits: current hashing target in a compact format.
Nonce: a 4-byte field, which usually starts with 0 and increases for every hash
calculation (will be explained in details in Section 3).
356 Z. Zheng et al.
The block body is composed of a transaction counter and transactions. The maximum
number of transactions that a block can contain depends on the block size and the size
of each transaction. Blockchain uses an asymmetric cryptography mechanism to validate
the authentication of transactions (NRI, 2015). A digital signature based on asymmetric
cryptography is used in an untrustworthy environment. We next briefly illustrate digital
Figure 2 Block structure (see online version for colours)
2.2 Digital signature
Each user owns a pair of private key and public key. The private key is used to sign the
transactions. The digital signed transactions are spread throughout the whole network and
then are accessed by public keys, which are visible to everyone in the network. Figure 3
shows an example of digital signature used in blockchain. The typical digital signature is
involved with two phases: the signing phase and the verification phase. Take Figure 3 as
an example again. When a user Alice wants to sign a transaction, she first generates a hash
value derived from the transaction. She then encrypts this hash value by using her private
key and sends to another user Bob the encrypted hash with the original data. Bob verifies the
received transaction through the comparison between the decrypted hash (by using Alice’s
public key) and the hash value derived from the received data by the same hash function as
Alice’s. The typical digital signature algorithms used in blockchains include elliptic curve
digital signature algorithm (ECDSA) (Johnson et al., 2001).
Figure 3 Digital signature used in blockchain (see online version for colours)
Blockchain challenges and opportunities: a survey 357
2.3 Key characteristics of blockchain
In summary, blockchain has following key characteristics.
Decentralisation. In conventional centralised transaction systems, each transaction
needs to be validated through the central trusted agency (e.g., the central bank)
inevitably resulting the cost and the performance bottlenecks at the central servers.
Differently, a transaction in the blockchain network can be conducted between any
two peers (P2P) without the authentication by the central agency. In this manner,
blockchain can significantly reduce the server costs (including the development cost
and the operation cost) and mitigate the performance bottlenecks at the central server.
Persistency. Since each of the transactions spreading across the network needs to be
confirmed and recorded in blocks distributed in the whole network, it is nearly
impossible to tamper. Additionally, each broadcasted block would be validated by
other nodes and transactions would be checked. So any falsification could be
detected easily.
Anonymity. Each user can interact with the blockchain network with a generated
address. Further, a user could generate many addresses to avoid identity exposure.
There is no longer any central party keeping users’ private information. This
mechanism preserves a certain amount of privacy on the transactions included in the
blockchain. Note that blockchain cannot guarantee the perfect privacy preservation
due to the intrinsic constraint (details refer to Section 5).
Auditability. Since each of the transactions on the blockchain is validated and
recorded with a timestamp, users can easily verify and trace the previous records
through accessing any node in the distributed network. In Bitcoin blockchain, each
transaction could be traced to previous transactions iteratively. It improves the
traceability and the transparency of the data stored in the blockchain.
2.4 Taxonomy of blockchain systems
Current blockchain systems can be roughly categorised into three types: public blockchain,
private blockchain and consortium blockchain (Buterin, 2015). We compare these three
types of blockchain from different perspectives. The comparison is listed in Table 1.
Consensus determination. In public blockchain, each node could take part in the
consensus process. And only a selected set of nodes are responsible for validating the
block in consortium blockchain. As for private chain, it is fully controlled by one
organisation who could determine the final consensus.
Read permission. Transactions in a public blockchain are visible to the public while
the read permission depends on a private blockchain or a consortium blockchain. The
consortium or the organisation could decide whether the stored information is public
or restricted.
Immutability. Since transactions are stored in different nodes in the distributed
network, so it is nearly impossible to tamper the public blockchain. However, if the
majority of the consortium or the dominant organisation wants to tamper the
blockchain, the consortium blockchain or private blockchain could be reversed or
358 Z. Zheng et al.
Efficiency. It takes plenty of time to propagate transactions and blocks as there are a
large number of nodes on public blockchain network. Taking network safety into
consideration, restrictions on public blockchain would be much more strict. As a
result, transaction throughput is limited and the latency is high. With fewer
validators, consortium blockchain and private blockchain could be more efficient.
Centralised. The main difference among the three types of blockchains is that public
blockchain is decentralised, consortium blockchain is partially centralised and
private blockchain is fully centralised as it is controlled by a single group.
Consensus process. Everyone in the world could join the consensus process of the
public blockchain. Different from public blockchain, both consortium blockchain
and private blockchain are permissioned. One node needs to be certificated to join the
consensus process in consortium or private blockchain.
Since public blockchain is open to the world, it can attract many users. Communities are also
very active. Many public blockchains emerge day by day. As for consortium blockchain, it
could be applied to many business applications. Currently, Hyperledger (hyperledger, 2015)
is developing business consortium blockchain frameworks. Ethereum also has provided
tools for building consortium blockchains (ethereum, n.d.). As for private blockchain, there
are still many companies implementing it for efficiency and auditability.
Table 1 Comparisons among public blockchain,consortium blockchain and private blockchain
Property Public blockchain Consortium blockchain Private blockchain
Consensus determination All miners Selected set of nodes One organisation
Read permission Public Could be public Could be public
or restricted or restricted
Immutability Nearly impossible Could be tampered Could be tampered
to tamper
Efficiency Low High High
Centralised No Partial Yes
Consensus process Permissionless Permissioned Permissioned
3 Consensus algorithms
In blockchain, how to reach consensus among the untrustworthy nodes is a transformation
of the Byzantine Generals (BG) Problem (Lamport et al., 1982). In BG problem, a group
of generals who command a portion of Byzantine army circle the city. The attack would
fail if only part of the generals attack the city. Generals need to communicate to reach
an agreement on whether attack or not. However, there might be traitors in generals. The
traitor could send different decisions to different generals. This is a trustless environment.
How to reach a consensus in such an environment is a challenge. It is also a challenge for
blockchain as the blockchain network is distributed. In blockchain, there is no central node
that ensures ledgers on distributed nodes are all the same. Nodes need not trust other nodes.
Thus, some protocols are needed to ensure that ledgers in different nodes are consistent.
We next present several common approaches to reach consensus in the blockchain.
Blockchain challenges and opportunities: a survey 359
3.1 Approaches to consensus
Proof of work (PoW) is a consensus strategy used in Bitcoin network (Nakamoto, 2008).
POW requires a complicated computational process in the authentication. In POW, each
node of the network is calculating a hash value of the constantly changing block header.
The consensus requires that the calculated value must be equal to or smaller than a certain
given value. In the decentralised network, all participants have to calculate the hash value
continuously by using different nonces until the target is reached. When one node obtains
the relevant value, all other nodes must mutually confirm the correctness of the value. After
that, transactions in the new block would be validated in case of frauds. Then, the collection
of transactions used for the calculations is approved to be the authenticated result, which
is denoted by a new block in the blockchain. The nodes that calculate the hashes are called
miners and the POW procedure is called mining. Since the calculation of the authentication
is a time-consuming process, an incentive mechanism (e.g., granting a small portion of
Bitcoins to the miner) is also proposed (Nakamoto, 2008).
In the decentralised network, valid blocks might be generated simultaneously when
multiple nodes find the suitable nonce nearly at the same time. As a result, branches (or forks)
may be generated as shown in Figure 4. However, it is unlikely that two competing forks will
generate next block simultaneously. In POW protocol, a chain that becomes longer thereafter
is judged as the authentic one. Take Figure 4 as an example again. Consider two forks
created by simultaneously validated blocks B11 and G11. Miners work on both the forks
and add the newly generated block to one of them. When a new block (say B12) is added to
block B11, the miners working on fork G11-G12 will switch to B12. Block G12 in the fork
G11-G12 becomes an orphan block since it is no longer increased. Generally, after a certain
number of new blocks are appended to the blockchain, it is nearly impossible to reverse
the blockchain to tamper the transactions. In Bitcoin blockchain, when approximately six
blocks are generated, the relevant blockchain is considered to be the authentic one (e.g., the
chain of blocks B11, B12, B13, B14, B15 and B16 in Figure 4). Block interval depends on
different parameter setting. Bitcoin block is generated about every 10 min while Ethereum
block is generated about every 17 s.
Figure 4 An scenario of blockchain branches (the longer branch would be admitted as the main
chain while the shorter one would be deserted) (see online version for colours)
!" !#$ !## !#% !#& !#' !#( !#)
*## *#%
Miners have to do a lot of computer calculations in PoW, yet these works waste too much
resources. To mitigate the loss, some PoW protocols in which works could have some side-
applications have been designed. For example, Primecoin (King, 2013) searches for special
prime number chains which can be used for mathematical research. Instead of burning
electricity for mining the POW block, proof of burn (P4Titan, 2014) asks miners to send
360 Z. Zheng et al.
their coins to addresses where they cannot be redeemed. By burning coins, miners get
chances for mining blocks and they do not need powerful hardwares as POW.
Proof of stake (PoS) is an energy-saving alternative to POW. Instead of demanding users
to find a nonce in an unlimited space, POS requires people to prove the ownership of the
amount of currency because it is believed that people with more currencies would be less
likely to attack the network. Since the selection based on account balance is quite unfair
because the single richest person is bound to be dominant in the network. As a result, many
solutions are proposed with the combination of the stake size to decide which one to forge
the next block. In particular, Blackcoin (Vasin, 2014) uses randomisation to predict the next
generator. It uses a formula that looks for the lowest hash value in combination with the
size of the stake. Peercoin (King and Nadal, 2012) favours coin age-based selection. In
Peercoin, older and larger sets of coins have a greater probability of mining the next block.
Compared with PoW, PoS saves more energy and is more effective. Unfortunately, as the
mining cost is nearly zero, attacks might come as a consequence. Many blockchains adopt
PoW at the beginning and transform to PoS gradually. For instance, Ethereum is planning
to move from Ethash (a kind of PoW) (Wood, 2014) to Casper (a kind of PoS) (Zamfir,
2015). To combine the benefits of POW and POS, proof of activity (Bentov et al., 2014) is
proposed. In proof of activity, a mined block needs to be signed by N miners to be valid.
In that way, if some owner of 50% of all coins exists, he/she cannot control the creation of
new blocks on his/her own. Sometimes stake could be other things, for example, in proof of
capacity (burstcoin, 2014), miners have to allocate large hard drive space to mine the block.
Practical byzantine fault tolerance (PBFT) is a replication algorithm to tolerate byzantine
faults (Miguel and Barbara, 1999). Hyperledger Fabric (hyperledger, 2015) utilises the
PBFT as its consensus algorithm since PBFT could handle up to 1/3 malicious byzantine
replicas. A new block is determined in a round. In each round, a primary would be selected
according to some rules. And it is responsible for ordering the transaction. The whole process
could be divided into three phase: pre-prepared,prepared and commit. In each phase, a node
would enter next phase if it has received votes from over 2/3 of all nodes. So PBFT requires
that every node is known to the network. Like PBFT, Stellar consensus protocol (SCP)
(Mazieres, 2015) is also a Byzantine agreement protocol. There is no hashing procedure in
PBFT. In PBFT, each node has to query other nodes while SCP gives participants the right
to choose which set of other participants to believe. Based on PBFT, Antshares (antshares,
2016) has implemented their delegated byzantine fault tolerance (dBFT). In dBFT, some
professional nodes are voted to record the transactions instead of all nodes.
Delegated proof of stake (DPOS). Similar to POS, miners get their priority to generate
the blocks according to their stake. The major difference between POS and DPOS is that
POS is a direct democratic while DPOS is representative democratic. Stakeholders elect
their delegates to generate and validate a block. With significantly fewer nodes to validate
the block, the block could be confirmed quickly, making the transactions confirmed quickly.
Meanwhile, the parameters of the network such as block size and block intervals could
be tuned. Additionally, users do not need to worry about the dishonest delegates because
the delegates could be voted out easily. DPOS has already been implemented, and is the
backbone of Bitshares (bitshares, n.d.).
Ripple (Schwartz et al., 2014) is a consensus algorithm that utilises collectively-trusted
subnetworks within the larger network. In the network, nodes are divided into two types: a
server for participating consensus process and client for only transferring funds. In contrast
to that PBFT nodes have to ask every node in the network, each Ripple server has a Unique
Node List (UNL) to query. UNL is important to the server. When determining whether to
Blockchain challenges and opportunities: a survey 361
put a transaction into the ledger, the server would query the nodes in UNL. If the received
agreements have reached 80%, the transaction would be packed into the ledger. For a node,
the ledger will remain correct as long as the percentage of faulty nodes in UNL is less than
Tendermint (Kwon, 2014) is a byzantine consensus algorithm. A new block is
determined in a round. A proposer would be selected to broadcast an unconfirmed block in
this round. So all nodes need to be known for proposer selection. It could be divided into
three steps:
Prevote step. Validators choose whether to broadcast a prevote for the proposed
Precommit step. If the node has received more than 2/3 of prevotes on the proposed
block, it broadcasts a precommit for that block. If the node has received over 2/3 of
precommits, it enters the commit step.
Commit step. The node validates the block and broadcasts a commit for that block. if
the node has received 2/3 of the commits, it accepts the block.
The process is quite similar to PBFT, but Tendermint nodes have to lock their coins to
become validators. Once a validator is found to be dishonest, it would be punished.
3.2 Consensus algorithms comparison
Different consensus algorithms have different advantages and disadvantages. Table 2 gives
a comparison between different consensus algorithms and we use the properties given by
(Vukoli´c, 2015).
Node identity management. PBFT needs to know the identity of each miner in order
to select a primary in every round while Tendermint needs to know the validators in
order to select a proposer in each round. For PoW, PoS, DPOS and Ripple, nodes
could join the network freely.
Energy saving. In PoW, miners hash the block header continuously to reach the target
value. As a result, the amount of electricity required to process has reached an
immense scale. As for PoS and DPOS, miners still have to hash the block header to
search the target value but the work has been largely reduced as the search space is
designed to be limited. As for PBFT, Ripple and Tendermint, there is no mining in
the consensus process. So it saves energy greatly.
Tolerated power of the adversary. Generally 51% of hash power is regarded as the
threshold for one to gain control of the network. But selfish mining strategy (Eyal
and Sirer, 2014) in PoW systems could help miners to gain more revenue by only
25% of the hashing power. PBFT and Tendermint are designed to handle up to 1/3
faulty nodes. Ripple is proved to maintain correctness if the faulty nodes in a UNL is
less than 20%.
Example. Bitcoin is based on PoW while Peercoin is a new peer-to-peer PoS
cryptocurrency. Further, Hyperledger Fabric utilises PBFT to reach consensus.
Bitshares, a smart contract platform, adopts DPOS as their consensus algorithm.
Ripple implements the Ripple protocol while Tendermint devises the Tendermint
362 Z. Zheng et al.
PBFT and Tendermint are permissioned protocols. Node identities are expected to be known
to the whole network, so they might be used in commercial mode rather than public. PoW
and PoS are suitable for public blockchain. Consortium or private blockchain might have
preference for PBFT, Tendermint, DPOS and Ripple.
Table 2 Typical consensus algorithms comparison
Property PoW PoS PBFT DPOS Ripple Tendermint
Node identity Open Open Permissioned Open Open Permissioned
Energy saving No Partial Yes Partial Yes Yes
Tolerated <25% <51% <33.3% <51% <20% <33.3%
power computing stake faulty validators faulty nodes byzantine
of adversary power replicas in UNL voting power
Example Bitcoin Peercoin Hyperledger Bitshares Ripple Tendermint
3.3 Advances on consensus algorithms
A good consensus algorithm means efficiency, safety and convenience. Current common
consensus algorithms still have many shortages. New consensus algorithms are devised
aiming to solve some specific problems of the blockchain. The main idea of PeerCensus
(Decker et al., 2016) is to decouple block creation and transaction confirmation so that
the consensus speed can be significantly increased. Besides, Kraft (Kraft, 2016) proposed
a new consensus method to ensure that a block is generated in a relatively stable speed.
It is known that high blocks generation rate compromise Bitcoin’s security. So the
Greedy Heaviest-Observed Sub-Tree (GHOST) chain selection rule (Sompolinsky and
Zohar, 2013) is proposed to solve this problem. Instead of the longest branch scheme,
GHOST weights the branches and miners could choose the better one to follow. Chepurnoy et
al. (Chepurnoy et al., 2016) proposed a new consensus algorithm for peer-to-peer blockchain
systems where anyone who provides non-interactive proofs of retrievability for the past
state snapshots is agreed to generate the block. In such a protocol, miners only have to store
old block headers instead of full blocks.
4 Applications of blockchain
There is a diverse of applications of blockchain technology. In this section, we summarise
several typical applications of blockchain. We roughly categorise the applications of the
blockchain into finance in Section 4.1, IoT in Section 4.2, public and social services in
Section 4.3, reputation system in Section 4.4 and security and privacy in Section 4.5. Figure 5
illustrates 5 representative application domains of the blockchain.
Blockchain challenges and opportunities: a survey 363
Figure 5 Representative application domains of blockchain (see online version for colours)
Public and
xWeb Community
xSecurity Enhancement
xPrivacy Protection
xSafety and Privacy
xLand Registration
xEnergy Saving
xFree-Speech Right
xFinancial Services
xEnterprise Transformation
xP2P Financial Market
xRisk Management
4.1 Finance
Financial services. The emergency of blockchain systems such as Bitcoin
(Nakamoto, 2008) and (hyperledger, 2015) has brought a huge impact on traditional
financial and business services. Peters et al. (Peters and Panayi, 2015) discussed that
blockchain has the potential to disrupt the world of banking. Blockchain technology
could be applied to many areas including clearing and settlement of financial assets
etc. Besides, Morini (2016) showed that there are real business cases like
collateralisation of financial derivatives that could leverage blockchain to reduce
costs and risks. Blockchain has also caught tremendous attention in the eyes of large
software companies: Microsoft Azure (azure, 2016) and IBM (ibm, 2016) are
beginning to offer Blockchain-as-a-Service.
Enterprise transformation. In addition to the evolution of financial and business
services, blockchain can help traditional organisations to complete the enterprise
transformation smoothly. Consider an example of postal operators (POs). Since
traditional postal operators (POs) act as a simple intermediary between merchants
and customers, blockchain and cryptocurrency technology can help POs to extend
their simple roles with the provision of new financial and un-financial services. In
Jaag et al. (2016), Jaag and Bach explored opportunities of arising blockchain
technology for POs and claimed that each PO could issue their own postcoin which is
a kind of colored coin of Bitcoin. Since the POs are viewed as a trusted authority by
the public, postcoin could be prevailed quickly with their dense retail network. In
addition, it is also shown in Jaag et al. (2016) that blockchain technology offers
business opportunities for POs in identity services, device management and supply
chain management.
P2P financial market. Blockchain could also help build a P2P financial market in a
secure and reliable way. Noyes explored ways of combining peer-to-peer
364 Z. Zheng et al.
mechanisms and multiparty computation protocols to create a P2P financial MPC
(Multiparty Computation) market (Noyes, 2016b). Blockchain-based MPC market
allows offloading computational tasks onto a network of anonymous peer-processors.
Risk management. Risk management framework plays a significant role in financial
technology (FinTech) and now it can be combined with blockchain to perform better.
Pilkington (Pilkington, 2016) provided a novel risk-management framework, in
which blockchain technology is used to analyse investment risk in the
Luxembourgish scenario. Investors who nowadays hold securities through chains of
custodians tend to face the risk of any of these failings. With the help of blockchain,
investments and collaterals can be decided quickly instead of going through
long-term consideration. Micheler and Heyde indicated in Micheler and von der
Heyde (2016) that a new system combined with blockchain can reduce custody risk
and achieve the same level of transactional safety. Besides, blockchain-based smart
contract enables the decentralised autonomous organisations (DAO) to engage in
business-work collaborations. A highly dependable DAO-GaaS conflict model (Norta
et al., 2015) was proposed to safeguard business-semantics induced consistency rules.
4.2 Internet of things (IoT)
Internet of things (IoT), one of the most promising information and communication
technologies (ICT), is ramping up recently. IoT is proposed to integrate the things (also
named smart objects) into the internet and provides users with various services (Atzori
et al., 2010; Miorandi et al., 2012). The typical killer applications of IoT include the logistic
management with Radio-Frequency Identification (RFID) technology (ISO, 2013), smart
homes (Dixon et al., 2012), e-health (Habib et al., 2015), smart grids (Fan et al., 2013),
Maritime Industry (Wang et al., 2015), etc.
Blockchain technologies can potentially improve the IoT sector.
E-business. Zhang and Wen (2015) propose a new IoT E-business model and realise
the transaction of smart property based on blockchain and smart contract. In this
model, distributed autonomous corporations (DAC) is adopted as a decentralised
transaction entity. People trade with DACs to obtain coins and exchange sensor data
without any third party.
Safety and privacy. Safety and privacy preservation is another important concern for
IoT industry. Blockchain can also help in improving privacy in IoT applications. In
particular, Hardjono and Smith (2016) proposed a privacy-preserving method for
commissioning an IoT device into a cloud ecosystem. More specifically, a new
architecture was proposed in Hardjono and Smith (2016) to help the device to prove
its manufacturing provenance without the authentication of the third party and it is
allowed to register anonymously. Besides, in IBM (2015), IBM unveiled its proof of
concept for Autonomous Decentralised Peer-to-Peer Telemetry (ADEPT), which is a
system using blockchain technologies to build a distributed network of devices. In
ADEPT, appliances in the home would be able to identify operational problems and
retrieve software updates on their own.
4.3 Public and social services
Blockchain can also be widely used in public and social services.
Blockchain challenges and opportunities: a survey 365
Land registration. One of the typical blockchain applications in public services is the
land registration (NRI, 2015), in which the land information such as the physical
status and related rights can be registered and publicised on blockchains. Besides,
any changes made on the land, such as the transfer of land or the establishment of a
mortgage can be recorded and managed on blockchains consequently improve the
efficiency of public services.
Energy saving. Besides, blockchains can be used in green energy. Gogerty and Zitoli
proposed the solarcoin (Gogerty and Zitoli, 2011) to encourage the usage of
renewable energies. In particular, solarcoin is a kind of digital currency rewarding
solar energy producers. In addition to the usual way of getting coins through mining,
solarcoins could be granted by the solarcoin foundation as long as you have
generated the solar energy.
Education. Blockchain is originally devised to enable currency transactions to be
carried out in trustless environment. However, if we regard the learning and teaching
process as the currency, blockchain technology can potentially be applied to the
online educational market. in Devine (2015), blockchain learning was proposed. In
blockchain learning, blocks could be packed and placed into blockchain by teachers
and the learning achievements could be thought as coins.
Free-speech right. Moreover, blockchain can be used to secure internet infrastructure
such as DNS and identities. For example, Namecoin (namecoin, 2014) is an
experimental open-source technology that improves decentralisation, security,
censorship resistance, privacy, and speed of DNS and identities (namecoin, 2014). It
protects free-speech rights online by making the web more resistant to censorship.
Blockchains can also be used for other public services such as marriage registration, patent
management and income taxation systems (Akins et al., 2013). In the new public services
integrated with blockchains, mobile devices with digital signature embedded may replace
seals to be affixed on documents, which are submitted to administrative departments. In this
way, extensive paperwork can be greatly saved.
4.4 Reputation system
Reputation is an important measure on how much the community trusts you. The greater
your reputation, the more trustworthy you are regarded by others. The reputation of a person
can be evaluated on his or her previous transactions and interactions with the community.
There is a rising number of cases of personal reputation records falsification. For example,
in e-commerce, many service-providers enroll a huge number of fake customers to achieve
a high reputation. Blockchain can potentially solve this problem.
Academics. Reputation is important to academics. Sharples and Domingue (2015)
proposed a blockchain-based distributed system for educational record and
reputation. At the beginning, each institution and intellectual worker would be given
an initial award of educational reputation currency. An institution could award a staff
by transferring some reputation records to the staff. Since transactions are stored on
blockchain, all the reputation change could be detected easily.
Web community. The ability to assess the reputation of a member in a web
community is very important. Carboni (2015) proposed a reputation model based on
366 Z. Zheng et al.
blockchain, in which a voucher will be signed if customer is satisfied with the service
and would like to give a good feedback. After signing a voucher, a service provider
needs to take extra 3% of the payment to the network as the voting fee to discourage
the Sybil attack. A service provider’s reputation is calculated based on the amount of
the voting fee. Dennis and Owen (2015) proposed a new reputation system that is
practically applicable to multiple networks. In particular, they created a new
blockchain to store single dimension reputation value (i.e., 0 or 1) from the
completed transactions. Take the file sharing as an example. Entity Asends a file to
entity B. Upon receiving the file, Bsends a transaction consists of the score, the hash
of file and private key of Bto verify the identity. Then, the miners contact Aand Bto
confirm that the transaction happens with no suspicion. Since transactions are stored
on blockchain, reputation records are nearly impossible to tamper.
4.5 Security and privacy
Security enhancement. We have seen the proliferation of various mobile devices and
various mobile services, which are also exhibiting their vulnerability to malicious
nodes. There are a number of anti-malware filters proposed to detect the suspected
files through pattern matching schemes, which a central server to store and update
the virus patterns. However, these centralised countermeasures are also vulnerable to
malicious attackers. Blockchain can potentially help to improve the security of
distributed networks. In particular, Charles (Noyes, 2016a) proposed a novel
anti-malware environment named BitAV, in which users can distribute the virus
patterns on blockchain. In this way, BitAV can enhance the fault tolerance. It is shown
in Noyes (2016a) that BitAV can improve the scanning speed and enhance the fault
reliability (i.e., less susceptible to targeted denial-of-service attacks). Blockchain
technologies can also be used to improve the reliability of security infrastructure. For
example, conventional public key infrastructures (PKIs) are often susceptible to
single point of failure due to the hardware and software flaws or malicious attacks.
As shown in Axon (2015), blockchain can be used to construct a privacy-aware PKI
while simultaneously improving the reliability of conventional PKIs.
Privacy protection. In addition to the increasing risk of the exposure of our private
data to malwares, various mobile services and social network providers are collecting
our sensitive data. For example, Facebook has collected more than 300 petabytes of
personal data since its inception (Vagata and Wilfong, 2014). Usually, the collected
data are stored on central servers of service providers, which are susceptible to
malicious attacks. Blockchain has the potential to improve the security of privacy
sensitive data. in Zyskind et al. (2015), Zyskind et al. propose a decentralised
personal data management system that ensures the user ownership of their data. This
system is implemented on the blockchain. The system can protect the data against
these privacy issues:
data ownership
data transparency and auditability
fine-grained access control.
A similar system based on blockchain technology was also proposed to securely
distribute sensitive data in a decentralised manner in ethos (2014).
Blockchain challenges and opportunities: a survey 367
5 Challenges and recent advances
As an emerging technology, blockchain is facing multiple challenges and problems. We
summarise three typical challenges: scalability in Section 5.1, privacy leakage in Section 5.2
and selfish mining in Section 5.3.
5.1 Scalability
With the amount of transactions increasing day by day, the blockchain becomes heavy.
Currently, Bitcoin blockchain has exceeded 100 GB storage. All transactions have to be
stored for validating the transaction. Besides, due to the original restriction of block size
and the time interval used to generate a new block, the Bitcoin blockchain can only process
nearly 7 transactions per second, which cannot fulfil the requirement of processing millions
of transactions in a real-time fashion. Meanwhile, as the capacity of blocks is very small,
many small transactions might be delayed since miners prefer those transactions with a high
transaction fee. However, large block size would slow down the propagation speed and lead
to blockchain branches. So scalability problem is quite tough.
There are a number of efforts proposed to address the scalability problem of the
blockchain, which could be categorised into two types:
Storage optimisation of blockchain. To solve the bulky blockchain problem, a novel
cryptocurrency scheme was proposed in (Bruce, 2014). In the new scheme, old
transaction records are removed by the network and a database named account tree is
used to hold the balance of all non-empty addresses. In this way, nodes do not need
to store all transactions to check whether a transaction is valid or not. Besides
lightweight client could also help fix this problem. A novel schem named VerSum
(van den Hooff et al., 2014) was proposed to provide another way allowing
lightweight clients to exist. VerSum allows lightweight clients to outsource expensive
computations over large inputs. It ensures that the computation result is correct by
comparing results from multiple servers.
Redesigning blockchain. in Eyal et al. (2016), Bitcoin-NG (Next Generation) was
proposed. The main idea of Bitcoin-NG is to decouple conventional block into two
parts: key block for leader election and microblock to store transactions. Miners are
competing to become a leader. The leader would be responsible for microblock
generation until a new leader appears. Bitcoin-NG also extended the heaviest
(longest) chain strategy where only key blocks count and microblocks carry no
weight. In this way, blockchain is redesigned and the tradeoff between block size and
network security has been addressed.
5.2 Privacy leakage
The blockchain is believed to be very safe as users only make transactions with generated
addresses rather than real identity. Users also could generate many addresses in case of
information leakage. However, it is shown in Meiklejohn et al. (2013) and Kosba et al.
(2016) that blockchain cannot guarantee the transactional privacy since the values of all
transactions and balances for each public key are publicly visible. Besides, the recent study
(Barcelo, 2014) has shown that a user’s Bitcoin transactions can be linked to reveal user’s
information. Moreover, Biryukov et al. (2014) presented a method to link user pseudonyms
368 Z. Zheng et al.
to IP addresses even when users are behind network address translation (NAT) or firewalls.
in Biryukov et al. (2014), each client can be uniquely identified by a set of nodes it connects
to. However, this set can be learned and used to find the origin of a transaction. Multiple
methods have been proposed to improve anonymity of blockchain, which could be roughly
categorised into two types:
Mixing (Möser, 2013). In blockchain, users addresses are pseudonymous. But it is
still possible to link addresses to user real identity as many users make transactions
with the same address frequently. Mixing service is a kind of service which provides
anonymity by transferring funds from multiple input addresses to multiple output
addresses. For example, user Alice with address A wants to send some funds to Bob
with address B. If Alice directly makes a transaction with input address A and output
address B, the relationship between Alice and Bob might be revealed. So Alice could
send funds to a trusted intermediary Carol. Then Carol transfer funds to Bob with
multiple inputs c1, c2, c3, etc., and multiple output d1, d2, B, d3, etc. Bob’s address
B is also contained in the output addresses. So it becomes harder to reveal the
relationship between Alice and Bob. However, the intermediary could be dishonest
and reveal Alice and Bob’s private information on purpose. It is also possible that
Carol transfers Alice’s funds to her own address instead of Bob’s address. Mixcoin
(Bonneau et al., 2014) provides a simple method to avoid dishonest behaviours. The
intermediary encrypts users’ requirements including funds amount and transfer date
with its private key. Then if the intermediary did not transfer the money, anybody
could verify that the intermediary cheated. However, theft is detected but still not
prevented. Coinjoin (Maxwell, 2013) depends on a central mixing server to shuffle
output addresses to prevent theft. And inspired by Coinjoin, CoinShuffle (Ruffing
et al., 2014) uses decryption mixnets for address shuffling.
Anonymous. In Zerocoin (Miers et al., 2013), a zero-knowledge proof is used. Miners
do not have to validate a transaction with digital signature but to validate coins belong
to a list of valid coins. Payment’s origin is unlinked from transactions to prevent
transaction graph analyses. But it still reveals payments’ destination and amounts.
Zerocash (Sasson et al., 2014) was proposed to address this problem. In Zerocash,
zero-knowledge Succinct Non-interactive Arguments of Knowledge (zk-SNARKs) is
leveraged. Transaction amounts and the values of coins held by users are hidden.
5.3 Selfish mining
The blockchain is susceptible to attacks of colluding selfish miners. Generally,it is convinced
that nodes with over 51% computing power could reverse the blockchain and reverse the
happened transaction. However, recent research shows that even nodes with less 51% power
are still dangerous. In particular, Eyal and Sirer (2014) showed that the network is vulnerable
even if only a small portion of the hashing power is used to cheat. In selfish mining strategy,
selfish miners keep their mined blocks without broadcasting and the private branch would
be revealed to the public only if some requirements are satisfied. As the private branch is
longer than the current public chain, it would be admitted by all miners. Before the private
blockchain publication, honest miners are wasting their resources on a useless branch while
selfish miners are mining their private chain without competitors. So selfish miners tend to
get more revenue. Rational miners would be attracted to join the selfish pool and the selfish
could exceed 51% power quickly.
Blockchain challenges and opportunities: a survey 369
Based on selfish mining, many other attacks have been proposed to show that blockchain
is not so secure. In stubborn mining (Nayak et al., 2016), miners could amplify its gain
by non-trivially composing mining attacks with network-level eclipse attacks. The trail-
stubbornness is one of the stubborn strategies that miners still mine the blocks even if the
private chain is left behind. Yet in some cases, it can result in 13% gains in comparison with
a non-trail-stubborn counterpart. Sapirshtein et al. (2015) show that there are selfish mining
strategies that earn more money and are profitable for smaller miners compared with simple
selfish mining. But the gains are relatively small. Furthermore, it shows that attackers with
less than 25% of the computational resources can still gain from selfish mining. To help fix
the selfish mining problem, Heilman (Billah, 2015) presented a novel approach for honest
miners to choose which branch to follow. With random beacons and timestamps, honest
miners would select more fresh blocks. However, (Billah, 2015) is vulnerable to forgeable
timestamps. ZeroBlock (Solat and Potop-Butucaru, 2016) builds on the simple scheme:
Each block must be generated and accepted by the network within a maximum time interval.
Within ZeroBlock, selfish miners cannot achieve more than its expected reward.
6 Possible future directions
The blockchain has shown its potential in industry and academia. We discuss possible future
directions with respect to five areas: blockchain testing,stop the tendency to centralisation,
big data analytics,smart contract and artificial intelligence.
6.1 Blockchain testing
Recently different kinds of blockchains appear and over 700 cryptocurrencies are listed
in coindesk (2017) up to now. However, some developers might falsify their blockchain
performance to attract investors driven by the huge profit. Besides, when users want
to combine blockchain into business, they have to know which blockchain fits their
requirements. So blockchain testing mechanism needs to be in place to test different
Blockchain testing could be separated into two phases: standardisation phase and testing
phase. In standardisation phase, all criteria have to be made and agreed. When a blockchain
is born, it could be tested with the agreed criteria to valid if the blockchain works fine
as developers claim. As for testing phase, blockchain testing needs to be performed with
different criteria. For example, a user who is in charge of online retail business cares about
the throughput of the blockchain, so the examination needs to test the average time from a
user sending a transaction to the transaction being packed into the blockchain, capacity for
a blockchain block and etc.
6.2 Stop the tendency to centralisation
Blockchain is designed as a decentralised system. However, there is a trend that miners are
centralised in the mining pool. Up to now, the top 5 mining pools together owns larger than
51% of the total hash power in the Bitcoin network (bitcoinwrldwide, n.d.). Apart from
that, selfish mining strategy (Eyal and Sirer, 2014) showed that pools with over 25% of
total computing power could get more revenue than a fair share. Rational miners would
be attracted into the selfish pool and finally, the pool could easily exceed 51% of the total
370 Z. Zheng et al.
power. As the blockchain is not intended to serve a few organisations, some methods should
be proposed to solve this problem.
6.3 Big data analytics
Blockchain could be well combined with big data. Here we roughly categorised the
combination into two types: data management and data analytics. As for data management,
blockchain could be used to store important data as it is distributed and secure. Blockchain
could also ensure the data is original. For example, if blockchain is used to store patients
health information, the information could not be tampered and it is hard to steal those private
information. When it comes to data analytics, transactions on blockchain could be used for
big data analytics. For example, user trading patterns might be extracted. Users can predict
their potential partners’ trading behaviours with the analysis.
6.4 Smart contract
A smart contract is a computerised transaction protocol that executes the terms of a contract
(Szabo, 1997). It has been proposed for a long time and now this concept can be implemented
with blockchain. In blockchain, the smart contract is a code fragment that could be executed
by miners automatically. Nowadays, more and more smart contract develop platforms are
emerging and smart contract could achieve more and more functionalities. Blockchain could
be used in many areas, such as IoT (Christidis and Devetsikiotis, 2016) and banking services
(Peters and Panayi, 2015).
We categorise smart contract researches into two types: development and evaluation. The
development could be smart contract development or smart contract platform development.
Now many smart contracts are deployed on Ethereum (Wood, 2014) blockchain. As for
platform development, many smart contract develop platforms like Ethereum (Wood,
2014) and Hawk (Kosba et al., 2016) are emerging. Evaluation means code analysis
and performance evaluation. Bugs in smart contract could bring disastrous damages. For
instance, owing to the recursive call bug, over 60 million dollars are stolen from a smart
contract- the DAO (Jentzsch, 2016). So smart contract attack analysis is very important. On
the other hand, smart contract performance is also of vital importance to smart contract.
With blockchain technology developing quickly, more and more smart contract based
applications would be put into use. Companies need to take the application performance
into consideration.
6.5 Artificial intelligence
Recent developments in blockchain technology are creating new opportunities for artificial
intelligence (AI) applications (Omohundro, 2014). AI technologies could help solve many
blockchain challenges. For instance, there is always an oracle who is responsible for
determining whether the contract condition is satisfied. Generally, this oracle is a trusted
third party. AI technique may help build an intelligent oracle. It is not controlled by any
party, it just learns from the outside and train itself. In that way, there would be no argues
in he smart contract and the smart contract can become smarter. On the other hand, AI
is penetrating into our lives now. Blockchain and smart contract could help to restrict
misbehaviours done by AI products. For instance, laws written in smart contract could help
to restrict misbehaviours done by driverless cars.
Blockchain challenges and opportunities: a survey 371
7 Conclusion
The blockchain is highly appraised and endorsed for its decentralised infrastructure
and peer-to-peer nature. However, many researches about the blockchain are shielded
by Bitcoin. But blockchain could be applied to a variety of fields far beyond Bitcoin.
Blockchain has shown its potential for transforming the traditional industry with its key
characteristics: decentralisation, persistency, anonymity and auditability. In this paper,
we present a comprehensive survey on the blockchain. We first give an overview of the
blockchain technologies including blockchain architecture and key characteristics of the
blockchain. We then discuss the typical consensus algorithms used in the blockchain.
We analyse and compare these protocols in different respects. We also investigate typical
blockchain applications. Furthermore, we list some challenges and problems that would
hinder blockchain development and summarise some existing approaches for solving these
problems. Some possible future directions are also discussed. Nowadays smart contract is
developing fast and many smart contract applications are proposed. However, as there are
still many defects and limits in smart contract languages, many innovative applications are
hard to implement currently. We plan to take an in-depth investigation on smart contract in
the future.
The work described in this paper was supported by the National Key Research and
Development Program (2016YFB1000101), the National Natural Science Foundation of
China (61722214, 61472338), the Program for Guangdong Introducing Innovative and
Entrepreneurial Teams(2016ZT06D211), the Pearl River S&T Nova Program of Guangzhou
(201710010046), and Macao Science and Technology Development Fund under Grant No.
0026/2018/A1. The authors would like to thank Gordon K-T. Hon for his constructive
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... Blockchain is a distributed ledger [7] that cannot be tampered with or cryptographically faked because of the chain topology that joins data blocks progressively following the chronological order [8]. Blockchain has many advantages to solve the dependability, interoperability, and security concerns of IIoT [9] by supplying decentralized processes. Industrial processes and entities will be able to register and confirm their products and services via the integration of blockchain with IIoT [5]. ...
... In terms of the IIoT, Xu et al. [3] summarized the appl status, enabling technologies, and future directions of the IoT in the industrial f detail, but the description of the application level of the IoT middleware and bloc technology is not comprehensive. Wang, Lian, Leng, and Zheng et al. [6][7][8][9] summ the application of blockchain technology in IoT and IIoT in detail. They emphasiz the characteristics of blockchain technology (tamper-proofing, immutable, and dec ized), data structure, and consensus mechanism play a key role in the security is IIoT. ...
... In terms of the IIoT, Xu et al. [3] summarized the application status, enabling technologies, and future directions of the IoT in the industrial field in detail, but the description of the application level of the IoT middleware and blockchain technology is not comprehensive. Wang, Lian, Leng, and Zheng et al. [6][7][8][9] summarized the application of blockchain technology in IoT and IIoT in detail. They emphasized that the characteristics of blockchain technology (tamper-proofing, immutable, and decentralized), data structure, and consensus mechanism play a key role in the security issues of IIoT. ...
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... Blockchain transaction speed may be slow and difficult to apply to applications with high-frequency transactions. For example, Bitcoin processes 7 transactions per second, and Ethereum performs no more than 30 transactions per second [50], but Visa credit cards can process thousands of transactions per second [51]. A slower transaction speed may lead to more participating nodes (i.e., users, creators, and enterprises) having works pending on the podcast platform simultaneously and more data on the chain to process at the same time, thus making the blockchain more burdensome and lowering down the network transmission speed even further. ...
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The Internet of Vehicles (IoV) will be essential in building a smart city in the forthcoming Internet of Things (IoT) age. In reality, the IoV can successfully address several traffic issues. It is essential for maximizing the use of roads, cutting down on energy use and pollution, and promoting traffic safety. However, creating safe and immediate payments and communications is the main challenge with the IoV, especially with Vehicle-to-Vehicle (V2V) and Vehicle-to-Infrastructure (V2I). To examine the application of Blockchain as middle-ware amongst diverse stakeholders of intelligent transportation systems, this paper provides an approach for establishing secure payment and communication in response to this problem. Neural synchronization is used to enhance communication security. The architecture under consideration makes used to create a system for allowing Vehicle-to-Everything (V2X) interactions and transactions. Additionally, the efficiency and resistance of the suggested systems against typical security assaults are qualitatively tested in this paper. The key issues of V2X connections, such as safety and centralization, were addressed by the suggested method, according to computational testing. In this study, we also assessed the proposed solution’s most crucial characteristics, including memory and power use, modifiability, secrecy, consistency, authenticity, processing time, and affordability. The purpose of this test is to determine if the technology can provide efficient and reliable IoV communication and parking payment. The results show that the suggested methods are quicker and much more than the state-of-the-art communication technologies.
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Bitcoin was recently introduced as a peer-to-peer electronic currency in order to facilitate transactions outside the traditional financial system. The core of Bitcoin, the Blockchain, is the history of all transactions committed by the system. This distributed ledger is similar to a distributed shared register where miners write and read blocks. New blocks in the Blockchain contain the last transactions in the system and are added by miners after a block mining process that consists in solving a difficult cryptographic puzzle. Although, the reward is the main motivation for the mining process in Bitcoin, it also may be an incentive for attacks such as selfish mining. In this paper we propose and theoretically analyze a solution for one of the major problems in Bitcoin: selfish mining or block-withholding attack. This attack is conducted by adversarial miners in order to either earn undue rewards or waste the computational power of honest miners. Contrary to the best to date solution for preventing block-withholding [6], our solution, ZeroBlock, prevents this attack by using a novel timestamp-free technique that exploits the Poisson nature of the proof-of-work and the current knowledge on the propagation of information in Bitcoin [2]. Note that previous solutions are vulnerable to forgeable timestamps. Additionally, our solution is compliant with miners churn.
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Blockchain, the foundation of Bitcoin, has received extensive attentions recently. Blockchain serves as an immutable ledger which allows transactions take place in a decentralized manner. Blockchain-based applications are springing up, covering numerous fields including financial services, reputation system and Internet of Things (IoT), and so on. However, there are still many challenges of blockchain technology such as scalability and security problems waiting to be overcome. This paper presents a comprehensive overview on blockchain technology. We provide an overview of blockchain architechture firstly and compare some typical consensus algorithms used in different blockchains. Furthermore, technical challenges and recent advances are briefly listed. We also lay out possible future trends for blockchain.
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Recent blockchain-technology related innovations enable the governance of collaborating decentralized autonomous organizations (DAO) to engage in agile business-network collaborations that are based on the novel concept of smart contracting. DAOs utilize service-oriented cloud computing in a loosely coupled collaboration lifecycle with the main steps of setup, enactment, possible rollbacks and finally, an orderly termination. This lifecycle supports the selection of services provided and used by DAOs, smart contract negotiations, and behavior monitoring during enactment with the potential for breach management. Based on a sound understanding of the collaboration lifecycle in a Governance- as-a-Service (GaaS)-platform, a new type of conflict management must safeguard business-semantics induced consistency rules. This conflict management involves breach detection with recovery aspects. To fill the detected gap, we employ a formal design-notation that comprises the definition of structural and behavioral properties for exploring conflict-related exception- and compensation management during a decentralized collaboration. With the formal approach, we generate a highly dependable DAO-GaaS conflict model that does not collapse under left-behind clutter such as orphaned processes and exponentially growing database entries that require an unacceptable periodic GaaS reset.
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The ‘blockchain’ is the core mechanism for the Bitcoin digital payment system. It embraces a set of inter-related technologies: the blockchain itself as a distributed record of digital events, the distributed consensus method to agree whether a new block is legitimate, automated smart contracts, and the data structure associated with each block. We propose a permanent distributed record of intellectual effort and associated reputational reward, based on the blockchain that instantiates and democratises educational reputation beyond the academic community. We are undertaking initial trials of a private blockchain or storing educational records, drawing also on our previous research into reputation management for educational systems.
In this paper, we examine the emerging risk management strategies of the FinTech industry. We focus on the Luxembourgish scenario, given the idiosyncratic features of the financial, economic and regulatory environment in this very unique EU country. After a brief presentation of the architecture of the Luxembourgish financial center, we present a novel risk-management framework for issuers of digital currencies and providers of e-money services. This framework is divided into two sequences: 1) prior to the implementation of blockchain technology 2) following the implementation of blockchain technology.Finally, in the light of recently observed evolutions, some important economic consequences are sketched out for the eurozone as a whole.
Introduction: Blockchain Hype vs Blockchain Seclusion?There has been a lot of noise in the press about the great potential uses for financial markets of Bitcoin-related technology, that could be extracted from the Bitcoin world and applied to existing markets to increase efficiency dramatically. Later, there has been a lot of noise about the fact that there is no actual use but all boils down to a generic enthusiasm called Blockchain Hype, and Bitcoin is the only reality where such technology can be fruitfully used. This paper shows that there are real business cases for improving financial markets based on the lesson learnt from cryptocurrencies, but, differently from what the hype-enthusiasts say, they are not application of a technology to the existing business model of financial markets. They are reforms of the business model itself. What needs to be exported from the world of cryptocurrencies are aspects of the market organization, inspiration for a different accounting and legal system, and some aspects of the technology. These can be a huge contribution towards more robust, efficient and stable markets, but the process cannot be immediate and effortless, and can only be achieved within a market-wide strategic view. One crucial misunderstanding here is the idea that Blockchain Technology can be exported to financial markets as they are to make them more efficient. This is meaningless; Blockchain technology was created to change some trust-based business processes to make them less reliant on trust; without structural changes in this direction the best of Blockchain technology is lost and just the inefficiencies are left. This misunderstanding is the perfect partner of the idea that Blockchain technology cannot be used outside the Bitcoin world. This is equally meaningless; Bitcoin was created to attempt a level of independence from trust sufficient to allow players to be anonymous and do without any legal protection; other business solutions based on a level of trust intermediate between Bitcoin and traditional finance can use similar technology and yet be very different from Bitcoins. But we must ready to use the concept of trust in a totally different way, as a way to analyze the different parts of a business process and the reason for its current inefficiencies and risks.In the next we develop these concepts first in a parallel analysis of cryptocurrencies and financial markets. Then we focus on a specific business case regarding the collateralization of financial derivatives, that we describe bottom-up including quantifiable benefits in reducing costs, capital and risk. It is an example where the use of cryptocurrency technology is not more important than the business ideas developed in the analysis of cryptocurrencies; yet it was unconceivable before examples of distributed ledgers, smart contracts and oracles were visible in marketplaces. In fact, it was first presented in Morini and Sams (2015), in an introduction of the Blockchain innovation for the derivatives world.
This paper explores opportunities arising from blockchain technology for postal operators (POs). Blockchain technology has lately received a lot of interest by the media and the industry, especially in financial services. In the past years an entire ecosystem of new companies has developed, offering hundreds of different blockchain applications. Blockchains are a new kind of decentralized, secure and fast means of record-keeping. The first application of blockchain technology are cryptocurrencies like Bitcoin, which have become an alternative to commodity money and fiat money, but POs may be able to exploit this technology in a number of different ways.
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The Bitcoin system only provides eventual consistency. For everyday life, the time to confirm a Bitcoin transaction is prohibitively slow. In this paper we propose a new system, built on the Bitcoin blockchain, which enables strong consistency. Our system, PeerCensus, acts as a certification authority, manages peer identities in a peer-to-peer network, and ultimately enhances Bitcoin and similar systems with strong consistency. Our extensive analysis shows that PeerCensus is in a secure state with high probability. We also show how Discoin, a Bitcoin variant that decouples block creation and transaction confirmation, can be built on top of PeerCensus, enabling real-time payments. Unlike Bitcoin, once transactions in Discoin are committed, they stay committed.