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A Critical Review of Blockchain and Its Current Applications

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—Blockchain technology has been known as a digital currency platform since the emergence of Bitcoin, the first and the largest of the cryptocurrencies. Hitherto, it is used for the decentralization of markets more generally, not exclusively for the
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  A Critical Review of Blockchain and Its CurrentApplications Bayu Adhi Tama, Bruno Joachim Kweka, Youngho Park, Kyung-Hyune Rhee  Department of IT Convergence and Applications EngineeringPukyong National University, Busan, South KoreaEmail:  { bayuat, drbruno } @pukyong.ac.kr;  { pyhoya, khrhee } @pknu.ac.kr  corresponding author  Abstract —Blockchain technology has been known as a digitalcurrency platform since the emergence of Bitcoin, the first andthe largest of the cryptocurrencies. Hitherto, it is used for thedecentralization of markets more generally, not exclusively forthe decentralization of money and payments. The decentralizedtransaction ledger of blockchain could be employed to register,confirm, and send all kinds of contracts to other parties inthe network. In this paper, we thoroughly review state-of-the-art blockchain-related applications emerged in the literature. Anumber of published works were carefully included based ontheir contributions to the blockchain’s body of knowledge. Severalremarks are explored and discussed in the last section of thepaper.  Index Terms —Blockchain; cryptocurrency; review; applica-tions I. I NTRODUCTION A software system can be characterized into two mainarchitectural approaches, i.e. centralized and distributed [1]. Incentralized software system, the nodes are located around andconnected with one central node of coordination. Distributedsystem, on the contrary, have several connected nodes withoutany central node of control. Fig. 1 illustrates the contrastof these two architectures. There are several benefits of adistributed system, i.e. having more computing power bycombining the computing power of all connected nodes, anincreased reliability due to the fact that it does not have asingle of failure, and so forth. However, several drawbacksof a distributed system include communication overhead andsecurity issues which is related to misuse network access byuntrustworthy nodes.Meanwhile, blockchain can be seen as a part of the imple-mentation layer of a distributed software system. The dataintegrity in distributed systems can be achieved and main-tained using blockchain [2]. Furthermore, blockchain couldbe also considered as a purely peer-to-peer system which ismade up of the individual nodes in a network. Dishonestand malicious peers become the crucial integrity threat inpeer-to-peer systems. The individual nodes try to exploit thesystem for their own purposes since unknown peers withunknown reliability and trustworthiness may exist [3]. Thus,these critical problems are needed to be solved by blockchain.Along with blockchain, Bitcoin was srcinally invented byNakamoto [4] as the first and most prevalent cryptocurrency.It enables  trustless  and reliable transaction where a centralizedmanagement is not required though the users do not trusteach other or there are unreliable users in the network.Since then, blockchain has drawn a lot of attention to thedecentralized transaction ledger functionality which could beused to register, confirm, and send the payment or contracts.Furthermore, blockchain technology has been applied beyondfinancial transactions, to any kind of transaction and applica-tions, i.e. healthcare, utilities, real estate, and the governmentsector [5]. These are found to be feasible as the blockchainstructure develop for Bitcoin is portable and extensible.Originally, the main area for blockchain is connecting cryp-tocurrencies with conventional banking and financial institu-tions. Blockchain technology offers a novel banking ecosystemthus enabling financial institutions to conduct their financialtransactions directly between themselves without any cen-tral authorities or intermediaries. Every transaction must beauthenticated through the agreement of more than half of those participating in the network [6]. This means that noparticipants would be able to modify any data within theblockchain without the approval of other participants.The objective of this paper is to provide and exploreinsight into blockchain technology and its current practicalapplications. The paper thoroughly classifies the publishedworks found in the literature, i.e. academic journals, con-ferences, technical reports, and so on. Regarding the reviewstudies about blockchain technology, several works have beenconducted such as in [7], [8], [9], and [10]. However, moststudies have not considered a comprehensive discussion aboutblockchain-related applications.The rest of the paper is structured as follows. Section IIpresents an overview of blockchain technology, whilst SectionIII describes in detail about the practical facets of blockchain.Several remarks and an in-depth discussion are given inSection IV, and finally some concluding remarks are drawnin Section V.II. F UNDAMENTALS OF  B LOCKCHAIN  T ECHNOLOGY Blockchain is a type of distributed ledger (data structure)which contains information about transactions or events. It isreplicated and shared among the participants in the network [4]. The size of chain unceasingly increases since blocks are International Conference on Electrical Engineering and Computer Science (ICECOS) 2017978-1-4799-7675-1/17/$31.00 ©2017 IEEE 109  Fig. 1. Centralized and distributed network architecture, adapted from [1]Fig. 2. A chain of blocks -  blockchain  in the Bitcoin, adapted from [4] added and chained to the previous block using a hash function(see Figure 2 for further illustration of the Bitcoin’s blockchainas an example). A cryptographic hash function is used toproduce a hash. For instance, Bitcoin uses SHA-256, whilstLitecoin [11] and Primecoin [12] use Scrypt and Cunninghamchain, respectively. In addition, it enables us to simply verifythe input mapping to a given hash value. It would not befeasible for two different inputs having the same hash [13].The ledger in the blockchain is validated and preserved bya network node (user) in pursuance of   consensus  mechanism(a collection of rules that allow users to reach a mutualagreement [14]) thereby a central authority or intermediary isnot required. Each node keeps a complete replica of the entireledger. As the first aim of blockchain is to solve the problemsexist in Bitcoin cryptocurrency, Section III discusses in detailthe practical implementation of the blockchain for financialtransaction.III. B LOCKCHAIN  A PPLICATIONS In this section, the implementation of blockchain technologyin different areas are thoroughly discussed. Furthermore, suchapplications have been categorized into several groups, i.e.financial services, healthcare, business and industry, and othernovel applications.  A. Financial Service Blockchain has been widely applied for financial transactionwhich is so-called cryptocurrency. Nowadays, cryptocurrencieshave appeared as prominent software systems. Recalling theabove-mentioned of Fig. 2, the first block or  genesis block   (isnot appeared in the figure) contains the first transaction. The TABLE IT HE CURRENT EXISTING CRYPTOCURRENCY SYSTEMS Cryptocurreny Year Hash Func-tionMining MethodBitcoin [4] 2008 SHA-256 Find all possible nonce valuesby computing proof of work and other users agree and ver-ify the proof.Litecoin [11] 2011 Scrypt Similar to Bitcoin (proof of work)Peercoin [17] 2012 SHA-256d proof of work and proof of stakePrimecoin [12] 2013 Cunninghamchainproof of work Ripple [18] 2014 EC digitalsignatureconsensus systemEthereum [19] 2014 Ethash proof of work Permacoin[20]2014 Floating dig-ital signatureproof of retreivabilityBlackcoin [21] 2014 Scrypt proof of stakeAuroracoin[22]2014 Scrypt proof of work Darkcoin [23] 2014 X11 proof of work Namecoin [24] 2015 SHA-256d proof of work  hash of the first block is forwarded to the  miner  , who employsit and generates a hash for the second block. In similar fashion,the third block creates a hash that comprises of the first twoblocks, and etc. All blocks in the blockchain can be tracedback to the genesis block [7] [15].Cryptocurrency has its own currency (coin). Mining is theprocess of introducing a new block into blockchain. Each nodeuses blockchain to verify whether the coin is legitimate or if it has not spent already. Before the transaction records areappended into blockchain, a greater number of participantsreach an agreement. Mining process is a resource-intensivetask, thus makes it tough for an attacker to validate an invalidtransaction. Each mined-block is verified to see if it haswhether a valid proof of work [12] or a proof of stake [16].The followings are the prevalent steps in cryptocurrency: (i)a generated address (public key) is available for a user who hasa wallet, (ii) a private key is assigned to the wallet. It is used tosign transaction and proving ownership, (iii) the payer sendscoin to the payee using given address and sign it using payer’sprivate key, and finally (iv) the transaction is validated via min-ing process. Eleven cryptocurrency sytems are included in ourstudy, i.e. Bitcoin [4], Litecoin [11], Peercoin [17], Primecoin[12], Ripple [18], Ethereum [19], Permacoin [20], Blackcoin[21], Auroracoin [22], Darkcoin [23], and Namecoin [24]. Ta-ble I summarizes the afore-mentioned cryptocurrency systemswhich is presented in chronological order of occurrence.  B. Healthcare Blockchain has a tremendous potential in addressing the in-teroperability issues exist in the current healtcare systems [25].It can be used as a standard which allows the stakeholders, i.e.healthcare entities, medical researcher, etc to share electronichealth record (EHR) in a secure manner [26]. Sharing of EHRenables us to improve the quality of medical care [27] andenhance the recommendation for doctors [28], for instance. International Conference on Electrical Engineering and Computer Science (ICECOS) 2017 110  However, managing healthcare data, i.e. acquiring, storing,and analyzing is not a simple task, particularly in case of privacy issues. Healthcare data should not be revealed to otherparties which it might be vulnerable to be used fraudulentlyby malicious users or attackers.In order to get the better of those issues, a healthcare datagateway (HDG) based on the blockchain storage platformis proposed by [29]. It is a smartphone application whichcan be used to manage and control the data sharing easily.The proposed system enables users to process the patientdata without exposing patient privacy. Furthermore, a privateblockchain cloud is used to stored the data thus ensuringthe medical data can not be altered by anybody, includingphysicians and patients.The work [30] emphasizes on the designing of a newsystem to prioritize patient agency, called MedRec. It is adistributed ledger protocol that uses public key cryptographyto create blockchain. The blockchain replicas are distributed oneach node in the network. Similar to prior work, blockchaintechnology is used as a access control in order to automateand track certain tasks, i.e. append a new record, changein viewership rights, etc. Furthermore, smart contracts onan Ethereum blockchain [19] is utilized to create intelligentrepresentation of EHR that are stored in each individual node.Subsequently, the application of pervasive social network (PSN) based healthcare using blockchain is proposed by [31].PSN allows us to share medical data acquired by medicalsensors. PSN-based healthcare system comprises two mainsecurity protocols, i.e. an authentication protocol betweenmedical sensors and mobile devices in wireless body areanetwork (WBAN) and an EHR data sharing using blockchainin PSN area. Each node in the PSN is responsible for gener-ating and broadcasting of medical data transactions, i.e. nodeaddress and medical sensors. The miners, on the other hand,are responsible for transaction verification and new block creation.Lastly, a blockchain-based access control mechanism is pro-posed by [32]. Access control includes identification, authen-tication, and authorization process. It ascertains a condition of being accountable where user access can be traced for whatparticular action in a system. The proposed system permitsusers to access EHR from a shared data pools using blockchainafter verifying their identity and cryptographic keys. Toachieve user’s authentication, an identity based authenticationis adopted. In addition, an efficient lightweight block format isproposed to enhance the current implementation of blockchain.Table II compares the related study of blockchain technologyfor healthcare application. C. Business and Industry The emergence of Internet of Things (IoT) has broughtmany advantages such as delivering an inter-connection be-tween objects and humans. This motivates authors in [33][34] to propose an e-business architecture which is particularlydeveloped for IoT environment. For this purpose, distributedautonomous corporation (DAC) is adopted as an entity that TABLE IIT HE CURRENT EXISTING BLOCKCHAIN FOR HEALTHCARE Study Year Hash Function Mining MethodHDG [29] 2016 NA NAMedRec [30] 2016 Ethash proof of work PSN [31] 2016 NA NABBDS [32] 2017 SHA-256 proof of work  gives transaction services in the absence of human interven-tion. The core of the proposed system is a transaction modein which peer to peer transaction is performed autonomously,whilst Bitcoin and IoTcoin are adopted as the currency andexchange certificate, respectively.The authors [35] consider the importance of food safety andquality when proposing a agri-food supply chain traceabilitysystem using RFID and blockchain technology. Blockchain isadopted for ensuring the shared and published information isreliable and valid. Furthermore, a term ’smart manufacturing’in the era of Industry 4.0 is also extensively discussed in[36] [37]. Industry 4.0 denotes the flexibility of products andservices to be shared over the Internet or other networks,i.e. blockchain. With regard to the supply chain management,Industry 4.0 is expected to attain the circumstance of decen-tralization and self-regulation.To date, an extension of cloud computing which is so-calledfog computing or edge computing, has been attracted authorsto develop a fair payment system based on Bitcoin [38]. Fogcomputing can be regarded as a large-scale, ubiquitous, anddecentralized system which processes any computing tasks.The proposed system is established to improve the traditionale-cash system which needs a trusted authority, i.e. bank togenerate payment token. By employing the Bitcoin-basedpayment, the fog users (outsourcers) can directly make atransaction to the fog nodes (workers) without involving thirdparty. The authors argue that the proposed system can assure apayment for any completed tasks performed by honest workersregardless of the outsourcers is malicious or not.  D. Other Implementations In this section, the current implementation of blockchain inmany areas such as right management system, reputation sys-tem, digital content distribution system, WiFi authenticationand IoT security are discussed.The two papers [39] [40] present and discuss a new conceptof decentralized right management system by using blockchaintechnology (BRIGHT). It is entirely different with the tradi-tional approach in which a central third-party is commonlytaken into account. The proposed system is expected to havea strong mechanism against attack and it enables us to loweruser’s service fees. In addition, a reputation system is greatpotential to measure the trust valuation of us in the commu-nity. It is measured based on our previous transactions andinteractions in such network, i.e. e-commerce website [41].By involving blockchain in the reputation system, it can solvethe major issues exist in the current reputation system, i.e.freeloaders. International Conference on Electrical Engineering and Computer Science (ICECOS) 2017 111  Fig. 3. Paper distribution by year A new authentication protocol for WiFi is proposed by[42]. This is based on Bitcoin 2.0 which is an alternativecash system derived from Bitcoin. At first, users have toinstall an application called Auth-Wallet then the tokens calledAuth-Coins are issued. Users and access points exchangethe tokens for authentication. At last, the implementation of blockchain for smart home security is described in [43]. Inorder to provide secure access control to the IoT devices, aprivate and local blockchain is utilized. In addition to allowinga lightweight security mechanism for smart home devices,the blockchain also generates an immutable time-ordered of transactions. Also, smart home miner is considered to be adevice that centrally processes transactions in the smart home.IV. S OME  R EMARKS Twenty six research papers which are related withblockchain applications were thoroughly discussed. The paperswere carefully chosen from the online database, i.e. GoogleScholar in terms of their practical implementation. The lit-erature were searched using a keyword ’blockchain’ whichyielded about 9,840 results, and finally 26 papers were consid-ered for classification. Fig. 3 depicts distribution of papers byyear of publication. It is obvious that the number of blockchaintechnology-related papers have increased significantly sinceit firstly appeared in 2008. It is also worth mentioned thatblockchain has fascinated researchers as this technologicalinnovation brings the possibility of cooperatively produce andmaintain transactions (distributed ledger) in the network.There are tremendous advantages of blockchain such asspeed, robustness, openness, and so forth. Before the trans-action is appended into blockchain, all participants in thenetwork have to reach an agreement. However, blockchain isnot an universal cure for all problems and there are severalissues that have been identified such as financial transactionfor criminal activities, legal aspects, and other economic risks.Blockchain become one of the promising technology in thefuture if well exploited.V. C ONCLUSION The state-of-the-art research papers which are related withblockchain technology have been reviewed and discussed. Anumber of papers were comprehensively chosen from theonline database then they were classified into several differentareas. This paper offers an understanding of the currentblockchain research and its real-world implementations.A CKNOWLEDGMENT This work was supported by Institute for Information &communications Technology Promotion (IITP) grant fundedby the Korea government (MSIT) (2017-0-00156, The Devel-opment of a Secure Framework and Evaluation Method forBlockchain)R EFERENCES[1] A. S. Tanenbaum and M. Van Steen,  Distributed systems: principles and  paradigms . 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