We use cookies to distinguish you from other users and to provide you with a better experience on our websites. Close this message to accept cookies or find out how to manage your cookie settings.
We use cookies to distinguish you from other users and to provide you with a better experience on our websites. Close this message to accept cookies or find out how to manage your cookie settings.
Published online by Cambridge University Press: 20 December 2023
The best way to explain blockchain is to break it down into its basic components. We define components as the applied technologies and concepts which are either standalone technologies or concepts in computer science, which have been researched for decades in contexts other than blockchain. We identify technical and mathematical components as well as economic, political and social concepts, which are intertwined to facilitate blockchains’ functionalities. The aim of this chapter is to provide an overview of the applied technologies and concepts and an understanding of how they are combined.
First, we will explain the technical components, including P2P networks, virtual machines and smart contracts. Depending on the perspective, many blockchain systems can indeed be categorized as specific types of P2P systems, because P2P technology is the technical foundation of blockchain systems whose purpose is the exchange of verifiably unique assets. Whether P2P systems are considered forerunners of blockchain systems or a component of blockchain systems, understanding its concept, structure and differentiation from centralized architectures is crucial for understanding the innovation of blockchain technology.
While P2P networks are the technical foundation of blockchain systems, virtual machines greatly increase the functionality of blockchain systems as they allow non-censorable and autonomous programs (in the form of smart contracts) to be uploaded onto a blockchain. This is the basis of what some refer to as the Web 3.0. Blockchain is said to complement the current state of the internet by an increased connectivity through direct connections between users, new concepts of ownership, the uniqueness of digital assets and un-intermediated exchange. It adds another layer for payments, decentralized applications, automated and autonomous organizations, which need no central coordinator. By covering the topics of virtual machines and the smart contracts they enable we account for the technical evolution which the technology has experienced in the last years. Numerous applications (Chapter 4) and social impacts (Chapter 3), which we will focus on in the course of this book, rely on the increased functionality of blockchains through virtual machines. This is why we provide a detailed description of how they work and of the smart contracts they enable.
To save this book to your Kindle, first ensure [email protected] is added to your Approved Personal Document E-mail List under your Personal Document Settings on the Manage Your Content and Devices page of your Amazon account. Then enter the ‘name’ part of your Kindle email address below. Find out more about saving to your Kindle.
Note you can select to save to either the @free.kindle.com or @kindle.com variations. ‘@free.kindle.com’ emails are free but can only be saved to your device when it is connected to wi-fi. ‘@kindle.com’ emails can be delivered even when you are not connected to wi-fi, but note that service fees apply.
Find out more about the Kindle Personal Document Service.
To save content items to your account, please confirm that you agree to abide by our usage policies. If this is the first time you use this feature, you will be asked to authorise Cambridge Core to connect with your account. Find out more about saving content to Dropbox.
To save content items to your account, please confirm that you agree to abide by our usage policies. If this is the first time you use this feature, you will be asked to authorise Cambridge Core to connect with your account. Find out more about saving content to Google Drive.
