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       Introduction to Blockchains and Cryptocurrencies

      Sam Goundar

       The University of the South Pacific, Suva, Fiji

       [email protected]

      Blockchains and cryptocurrencies are now topics of substantial impact that academia, practitioners and the IT industry need to contemplate, study, research, publish, innovate, exploit and adopt. This book titled Blockchain Technologies, Applications and Cryptocurrencies intends to provide information on the innovative, scholarly and professional research pertaining to the management, organization and technological use of blockchains and cryptocurrencies. The chapters in this book will be essential for anyone interested in these areas. This book is one of the few dedicated entirely to blockchain technologies, applications and cryptocurrencies.

      Blockchain technologies are being claimed to be as disruptive as the Internet. A white paper, written by Satoshi Nakamoto (a pseudonym), “Bitcoin: A Peer-to-Peer Electronic Cash System” appeared in 2008, setting everything into motion. The white paper detailed how an electronic cash transaction can take place between peers without the need for a third party (financial institution). Since then, the paper has been cited 5,687 times at the time of writing this introduction. Digital signatures and cryptography would be used to secure the financial transaction, and peers on the bitcoin network running on the blockchain technology would verify, validate and authorise the transaction to eliminate the “double spend problem”.

      According to Nakamoto (2008), this would make the system and transaction transparent, immutable and under the control of peers, thus eliminating control of financial institutions and their exorbitant fees. The bitcoin network would timestamp transactions by hashing them into an ongoing chain of hash-based proof-of-work, forming a record that cannot be changed without redoing the proof-of-work. The longest chain will not only serve as proof of the sequence of events witnessed, but proof that it came from the largest pool of CPU power. Messages are broadcast on a best effort basis, and nodes can leave and rejoin the network at will, accepting the longest proof-of-work chain as proof of what happened while they were gone.

      The website BlockGeeks.Com (2019) defines “blockchain” as a growing list of records, called blocks, which are linked using cryptography. Each block contains a cryptographic hash of the previous block, a timestamp and transaction data (generally represented as a Merkle tree). By design, a blockchain is resistant to modification of the data. It is “an open, distributed ledger that can record transactions between two parties efficiently and in a verifiable and permanent way”. Blockchain use with peer-to-peer electronic cash transactions enabled a number of Financial Technology (FinTech) applications, Distributed Ledger Technology (DLT) applications and introduction of more than thousand other Cryptocurrencies. Bitcoin still remains the most popular cryptocurrency.

      Blockchains have now moved from electronic cash to other applications in government, supply chain management, healthcare, agriculture, real estate, international development and almost any application that utilize databases that can be replaced with a more secure, immutable, consensus-based, transparent and trust-based database. Apart from FinTech applications, other applications based on blockchains are emerging in every sector and industry as everyone is intent on taking advantage of the special properties of blockchains mentioned in the previous sentence. After bitcoin’s success or failure (it depends), people are trying to apply it to procedures and processes beyond financial transactions. In effect, they are asking: What other

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