Blockchain Part 4: Decentralized Applications (Dapps)

While cryptocurrencies in general and Bitcoin in particular are the primary application that brought blockchain into the limelight, the potential of blockchain in the enterprise extends far beyond cryptocurrencies. As we’ll see in subsequent blogs, companies in financial, energy, medical, supply chain management, logistics, cloud computing, etc. are now investing in and launching proof of concepts to get ahead of the coming operations and technology changes in their enterprise systems.

The real power of blockchain will be realized as the technology gets adopted by industries such as:

  • Healthcare
  • Banking & Finance
  • Logistics
  • Ecommerce
  • Cloud Computing

Some of the startups launching Decentralized Applications
(Dapps) include Storj, which is a decentralized storage solution. There’s also technical conversation about how to launch domain name server (DNS) on blockchain to prevent denial of service (DoS) attacks.

Blockchain is rapidly gaining adoption in the enterprise. A significant percentage of fortune 500 companies are either building external facing commercial blockchain platforms (Microsoft, Amazon, Oracle, etc) or deploying proof of concept within their operations. This means that –

  • How to introduce blockchain to your organization especially teams already using DevOps
  • Knowledge base for blockchain solutions and strategies
  • Increased demand for blockchain developers
  • Timeline for blockchain widespread blockchain adoption

We will be exploring these topics in subsequent articles

Blockchain Part 3: Why Blockchain is the Next Platform for Applications

Blockchains are comprised of single blocks chained together to form a single chain or single main chain and multiple side chains.

  • Single (Main) Chain

    As the name implies is a single on the main chain in the blockchain. Here, the main chain validates and processes all blocks and transactions.

  • Multi (Side) Chain

    Because all transaction or requests must be verified prior to execution, it can put a tremendous overhead on the processing power of the main chain. So, there is a new technology being adopted (Ethereum already has this implemented) that allows a fork in the main chain into a side chain or child chain.

    A side chain is usually defined for one specific task. There can be multiple side chains where each is performing a different task. Side chains are implemented in order to maximize transaction (keep in mind that could be requests for action) processing efficiency.


    Suppose DevOps requirement is to put change management on the main chain. Side chains can be created to optimize for transactions that require monitoring and immediate response (such as approvals) and another side chain for processes that are time consuming and require team/operational coordination such as testing.

Fig 1. Main chain and side chain

In this scenario, we see that branches can be created from the main chain in the blockchain. Example, if the main chain represents the overall business objective, and the branches or side chains represent processes, business groups or divisions. A transaction in the main chain can call on processes in the side chain to be executed, validated and reported back to the main chain. This methodology can alleviate some of the overhead that can slow down the main chain.

Blockchain Part 2: What is Blockchain

Blockchain Part 2: What is Blockchain?

Blockchain is an append-only electronic distributed ledger database technology. The protocol ensures that each block of data is tamper proof, secure, decentralized, verified and fingerprinted (or hashed) before it is appended to the chain.

For example: Currently, most enterprise companies like Facebook, Amazon and Microsoft run a data monopoly, meaning that all user data that are collected are stored in a central database controlled by the entity. The user has little to no control on how that data is used, shared, stored, updated, etc.

Blockchain is an append-only electronic distributed ledger database. While the term “Blockchain” is relatively new, the underlying technologies have been in existence for 20+ years. Blockchain relies on the following existing technologies–

At a very high level, blockchain relies on the following existing technologies–

  • Cryptography – The fact that each blockchain record contains a unique cryptographic hash that is used to track that block, as well as others in the associated chain, means data cannot be modified (immutable). That makes it perfect for record keeping and auditing purposes.
  • Distributed Ledger Technology (DLT) – What makes a blockchain a special kind of ledger is that instead of being managed by a single centralized institution, such as a bank or government agency; rather, copes of the data are stored on multiple independent computers within a decentralized network. No single entity controls the ledger. Any of the computers on the network can make a change to the ledger, but only by following rules dictated by a “consensus protocol. Any changes made to the ledger are then broadcasted to all the nodes on the network. Then all nodes are updated to reflect those changes.
  • Consensus Algorithm – a mathematical algorithm that requires a majority of the other computers on the network to agree with the change. Consensus protocol comes in 2 flavors –
    • Permissioned and Permissionless

      Within this general framework are many variations. There are different kinds of consensus protocols, for example, and often disagreements over which kind is most secure. There are public, “permissionless” blockchain ledgers, to which in principle anyone can hitch a computer and become part of the network; these are what Bitcoin and most other cryptocurrencies belong to. There are also private, “permissioned” ledger systems that incorporate no digital currency. These might be used by a group of organizations that need a common record-keeping system but are independent of one another and perhaps don’t entirely trust one another—a manufacturer and its suppliers, for example.

  • Once a consensus generated by that algorithm has been achieved, all the computers on the network update their copies of the ledger simultaneously. If any of them tries to add an entry to the ledger without this consensus, or to change an entry retroactively, the rest of the network automatically rejects the entry as invalid.
  • Immutability – As mentioned above, data recorded on each block, once verified and accepted via consensus by all the nodes, cannot be modified or deleted. Any attempt to modify or delete a data on a block will render that block as well as the prior block non-compliant and therefore unacceptable.
  • Smart Contracts – are programmed instructions that are automatically executed when certain conditions are met. Smart contracts are similar to IF THEN ELSE statements embedded in contracts. Ex- do something (e.g., release code) if something else is true (test of code is completed and approved). Example, an attorney might create a smart contract “will” that is stored on a blockchain. In that case, in the event of an event, then the will is executed automatically, precisely as the owner stipulated without any human intervention or misunderstanding of the intent of the owner.
  • Trustless – Historically, society has relied on centralized authorities to establish trust between unknown parties in order to facilitate transactions and to execute contracts. These central authorities have served as custodians of trust for the millennia. Just imagine doing any business today without third party intermediaries. This is about to change thanks to blockchain. Because it is decentralized, transparent to all stakeholders and immutable, blockchain has trust built into its operations so it does not rely on a third party with a siloed and centralized database which are often subject to tempering and hacking.
  • Hashing – Takes the input on a given block in addition to the hash of the prior block and runs it through SHA-256 hashing algorithm and produces a new hash function that is then used to secure its place in the chain of blocks. This is one of the secure features of blockchain that makes it immutable and difficult to hack. If the content on a block is altered, then that block will be rejected by the blocks prior and after that block. So the only way to compromise a block is to solve a complex mathematical problem that alters the particular block and all other blocks before it along with all the decentralized block in the network. All these has to be done in a specific time limit for it to be accepted.

    How the hashing process works using the SHA-256 hash calculator

    Fig 2.

Part 1: Difference between Blockchain and Bitcoin —  Part 3: Why Blockchain is the next platform for Applications

Blockchain Part 1: Difference Between Blockchain vs Bitcoin (08/06/2018)

Edit: Interesting how much has changed in just 3 short months
Bitcoin is trading today 08/06/2018 at $7,632 ($3,941.67 11/25/2018) compared to August 16th, 2010, when it was trading at $0.07 per coin. Bitcoin actually went up to $15,825 per coin on December 2017. The meteoric rise in Bitcoin value and other cryptocurrencies has led to the misunderstanding that Bitcoin and Blockchain are one and the same thing. That would be similar to assuming that TCP/IP and email are the same thing.
While it is true that most people would probably never hear of blockchain without the current bitcoin buzz. The 2 are very different things.
Analogous to the early days of TCP/IP and the internet, it requires a compelling application like email or online commerce/payment in order to facilitate widespread adoption. Bitcoin happens to be the first viable application with compelling business disruption potential, investment incentives, financial rewards for investors, and global interests, to run on the Blockchain protocol.
While the term “Blockchain” is relatively new, some of the underlying technologies have been in existence for decades.

Fig 1.

Part 2: What is Blockchain