Akira Summers - Understanding Blockchain and Cryptocurrencies

A Primer for Implementing and Developing Blockchain Projects

Akira Summers

First edition published 2022

by CRC Press

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ISBN: 9781032034065 (hbk)

ISBN: 9781032034072 (pbk)

ISBN: 9781003187165 (ebk)

DOI: 10.1201/9781003187165

Typeset in Sabon

by Newgen Publishing UK

This book is dedicated to my darling children, Dantai, Skyler and Rayven; to Rei; to my partner, James Gordon; to my sisters Donna Dixon and Shelley McCubbin; to the friends who have supported me over the years, in no particular order, Melissa Reddy, Damian Rourke, Helena Nouwens, Stacy OBrien, John Kelly, Avi Jawanda, Lianne Forbes, Valentina Ippolito, Cathy Easthope, Sander Sarti, Ben Clempson and to my Granny and Peter.

Hi, I am Akira Summers and I have been working in software and technological development since the year 2000. I started off in web development and interactive media, but I have held many development roles including spending several years working as a game programmer.

I am a lecturer in digital media technologies at Birmingham City University in the United Kingdom, teaching programming, interactive media and development. I am a keen blockchain developer and researcher, teaching students and industrial partners the joy of blockchain and supporting them in their blockchain endeavours. When I began developing for blockchain and teaching my students, I struggled to find books that brought together the different things that they needed to understand, so I decided to write my own and I hope you enjoy it!

So, you want to learn about blockchain. Good move! Blockchains are still in their early days and activity is growing year by year. We are in a comparable stage to the internet in its infancy. It was seen as transformational, but it was just getting going. In the beginning, static webpages were all you could expect. Now, we have interactive web applications and all manner of different technologies built on top of the internet, from apps on mobile phones, to smart devices connected around the home.

Right now, there are hundreds, probably thousands of blockchain networks, but the potential is still growing day by day and new use-cases emerge that not only revise and enhance existing tools and workflows but also allow for innovations from blockchain-based, censorship-resistant social media, to game asset management.

With so much happening and so many opportunities emerging, right now is a very exciting time to be learning about blockchain and getting involved in developing or managing projects that use this innovative new technology.

This is a guide to the basic principles of how blockchains work. There are many different implementations of blockchains and this number is growing rapidly. The cryptocurrency field alone has thousands of unique blockchains, each with their own purpose and features that are often devised and created by thriving communities of developers. It is impossible to write one guide that covers all of the features of all existing blockchains. This book, instead, covers the general principles that apply, though they are modified in different implementations.

In this book, you will learn about the structure of a blockchain and the principles that it is built upon. You will look at the methods employed in cryptocurrencies and the structures and techniques used in managing transactions. We will look at so-called blockchain 1.0 and blockchain 2.0, the differences and vulnerabilities. We will discuss and explain topics such as hashing, Merkle trees, nodes, mining, Proof of Work and Proof of Stake, consensus mechanisms, encryption and much more.

Though this book describes the computing concepts behind the blockchain, it is not just for developers. Of course, if you want to move into blockchain management of supply chains or are responsible for a blockchain voting system, you really should understand what is happening inside these systems. Equally, if you would like to manage blockchain projects, then you should have a grounding in the concepts and possibilities that blockchains bring.

This book is intended to act as a primer, before possibly moving onto further study in follow-on subjects such as blockchain development, blockchain for business, financial technologies/FinTech, supply chain management or any of the many and varied roles that are growing around this new technology.

I would like to thank those who have contributed to the making of this book. In particular, I would like to thank Manyee Lee, John Lee and Damian Rourke, for the insightful feedback that I received from you. Additionally, I would like to thank Dr Gavin Wood, founder of Ethereum and Parity, Rob Stupay and The Remix Project, TradingView and BitInfoCharts for allowing me to use your images, charts and data.

Notes and interesting facts are provided in the following boxes. It is not essential to read them to understand blockchains, but they provide useful context and fun facts like this:

Note: Satoshi Nakamoto, the inventor of the first real-world, widely used blockchain, never actually used the term blockchain. It was coined years later. He instead referred to it as a chain-of-blocks.

The wonderful world of blockchain is shrouded in mystery, its inventor being anonymous, releasing the idea and the source code through a pseudonym. It is easy to see why the inventor of a disruptive technology might want to remain anonymous, particularly when the system you are disrupting is money!

Here is another fun fact: