Peter Kent - Cryptocurrency All-in-One For Dummies

EndPointRegistry: A place to record items in a blockchain

IntegerKey: A shared ledger that is used for supply chain management

MarketPlace: A blockchain trading platform for buying, selling, and trading digital assets

The consensus algorithm for Sawtooth is called proof of elapsed time (PoET). It was built to run in a secure area of the main processor of your computer, called a trusted execution environment (TEE). PoET leverages the security of the TEE to prove that time has passed by time-stamping transactions.

Other consensus algorithms have some kind of time-stamping element as well. The way they ensure that the records have not been changed is through publicly publishing their blockchains as proof that they have not been altered. The published ledger acts as a public witness that anyone can roll back and check. It’s sort of like publishing an ad in a newspaper to prove something happened.

PoET also has a lottery system that works a bit differently from other blockchains using proof of work. It randomly selects a node from the pool of validating nodes. The probability of a node being selected increases proportionally to how much processing resources that node contributed to the shared ledger. Measures may be put in place to prevent nodes from gaming the system and corrupting the ledger.

Check out Book 6, Chapter 2for information about other consensus algorithms.

The Hyperledger website has some fantastic documentation and tutorials at https://www.hyperledger.org/use/tutorials . When you are within the tutorials page, navigate to Hyperledger Sawtooth to go through their collection of helpful tutorials.

You may also want to review Coding For Dummies, by Nikhil Abraham (John Wiley & Sons, Inc.), prior to trying these tutorials.

A lot of work has gone into making Fabric accessible. The Hyperledger Composer is an easy-to-use tool that allows you to create blockchain application proof of concepts (PoCs). The best part is that it will enable you to define your business network with JavaScript, one of the most popular development languages in the world. This feature alone will significantly cut down on your need for specialized blockchain developers.

The Hyperledger Composer will decrease the development time and cost and enable you to get to the production-ready stage sooner. Another benefit of the Composer is that it utilizes LoopBacks. LoopBacks communicate digital data streams back to your existing business system, keeping your operations in sync. You still need a good development team to do this, but you can easily mock up your business logic.

A LoopBack is a bit of code that sits in your software and communicates a digital data stream back to a source without intentional processing or modification.

You can try the Hyperledger Composer in your browser without needing to download any special software. The Composer also has a download option that works great if you need to work offline or need to use the Composer’s full application development capabilities.

For this quick tutorial, you need a web browser and an Internet connection. In the following sections, we show you how to deploy your own network, set up a tracking demo, and move assets from one location to another. It’s mostly a point-and-click demo, but you also need to copy and paste a few snippets of code.

You’ll use the Animal Tracking Business Network framework. It was built as a use case for the U.K. government and farmers. In this demo, a farmer can move animals between fields, and the U.K. regulator can track the locations of the cows. The assets in this demo happen to be animals, but they could represent any type of object that needs to have its location tracked by a third party, such as a regulator or insurance provider.

A smart contract is computer code that is written inside a blockchain protocol. Smart contracts are created to facilitate, verify, or enforce the prenegotiated terms between two or more parties. The blockchain protocol takes the place of enforcement of contracts. Smart contracts, in effect, allow two or more parties to work together without trust or the need to have authoritative judgment or settlement if things go wrong. At least that’s how they work in theory. Many different platforms enable smart contracts. On Hyperledger, they’re called chaincode.

Chaincode is conveniently written in Go, node.js, and Java and runs in a secured Docker container. Unlike other smart contract platforms that must expose your contract to a public network to enforce them, chaincode is isolated from the endorsing peer process of public blockchains. This allows you to keep your business logic private.

Another feature that distinguishes chaincode from many other platforms is that each chaincode contract is isolated. Other organizations using Hyperledger can’t access your chaincode directly unless permissioned. This feature may reduce attack vectors on your contracts by keeping third parties from accessing them.

A smart auction is a type of smart contract. Its function is to transfer ownership of an item after predetermined parameters of the agreement are met.

Chapter 7

IN THIS CHAPTER

Discovering future global bank trends

Uncovering new investment vehicles

Exposing risk in the banking blockchain

Developing new financing strategies

The first institutions to adopt blockchain technology were banks, governments, and other financial organizations — and they’re the fastest-growing blockchain users, too. The powerful tools that are being built to manage and move money will reshape our world in new and unexpected ways, so it makes sense that financial technology (fintech) would jump onboard.

This chapter gives you the inside scoop on what governments are currently doing with blockchain technology and how it will affect you. Fintech touches your life every day, whether you’re aware of it or not.

This chapter introduces you to future banking trends, new regulations, and the new tools that can help you move money faster and more cheaply. You discover new types of investment vehicles and other blockchain innovations. And finally, we warn you about potential risks of investments involving virtual currency and new blockchain-technology-enabled financial products. To read more about how blockchain technology may affect the economy of the future, head to Book 5, Chapter 1, and check out the rest of Book 5to learn about cryptocurrency investing.