Architecting Enterprise Blockchain Solutions

Foreword xxi Introduction xxiii Chapter 1 Introduction to Blockchain Technologies 1 What is a Blockchain? 2 My Approach to the Definition3 Technical Audience 3 Business Audience 3 Legal Audience 5 Three Definitions of Blockchain 5 History of Blockchains 5 Blockchain vs Traditional Database 9 Distribution of Trust 10 Consensus and Trust 10 Summary of Differences Between Ledgers and Traditional Databases 10 Cap Theorem 12 Common Properties of Permissionless Blockchains 13 Why the Blockchain is Considered Revolutionary 15 Blockchain Principles 15 Trust or Trustless 16 Transparency and Blockchain 18 Blockchain Transaction Basics 20 Consensus 20 Blocks 20 Types of Blockchains 21 Public, Private, and Hybrid Blockchains 21 Summary 27 Chapter 2 Enterprise Blockchains: Hyperledger, R3 Corda, Quorum, and Ethereum 29 Comparing Enterprise Blockchains 29 Introducing the Hyperledger Project 31 Hyperledger Frameworks 32 Introducing Hyperledger Fabric 35 Hyperledger Fabric Ledger 37 Hyperledger Fabric Consensus 38 Hyperledger Fabric Transactions 38 Hyperledger Fabric Nodes 40 Hyperledger Fabric Business Networks 40 Hyperledger Fabric Chaincode (Smart Contracts) 41 Hyperledger Fabric Development Tools 41 Hyperledger Fabric Governance 43 Introducing R3 Corda 43 R3 Corda Blockchain Fundamentals 46 R3 Corda Network 46 R3 Corda Ledger 47 R3 Corda Consensus 48 R3 Corda Nodes 49 R3 Corda States 49 R3 Corda Transactions 50 R3 Corda Client Applications 50 R3 Corda Smart Contracts 51 R3 Corda Development Tools 52 R3 Corda Governance 53 Introducing Quorum 54 Quorum Blockchain Fundamentals 55 Quorum Ledger 56 Quorum Consensus 56 Quorum Smart Contracts 56 Quorum Tools and Utilities 57 Quorum Governance 58 Introducing Ethereum 58 Ethereum Blockchain Fundamentals 60 Ethereum Ledger 61 Ethereum Node EVM 61 Ethereum Client Apps 63 Ethereum Transactions 64 Ethereum Smart Contracts 64 Ethereum Wallets 66 Ethereum Tools and Utilities 66 Ethereum Governance 68 Summary 68 Chapter 3 Architecting Your Enterprise Blockchain 69 Blockchain Technology Focus Areas 69 Blockchain Success Areas 70 Blockchain Compliance 71 Architecting a Blockchain Solution 71 Blockchain Design Workflow 72 Use Case Potential 72 Blockchain Structure and Components 77 Blockchain Structure 77 Blockchain Core Components 79 Enterprise Blockchain Architectures 81 TOGAF Domains 81 What, Who, and How of Enterprise Architecture 82 Tenets 82 Blockchain Design 83 Enterprise Blockchain Adoption Challenges 84 Risk Management 84 Blockchain as a Hammer 85 Enterprise Blockchain Design Principles 85 Enterprise Blockchain Design Requirements 86 Other Concerns—Deployment Model 90 Hyperledger Fabric 90 Hyperledger Fabric’s Main Selling Points 91 Hyperledger Fabric’s Blockchain Design Considerations 91 Hyperledger Fabric’s Advantages 91 Hyperledger Fabric’s Design Example Architectures 96 R3 Corda 98 R3 Corda’s Main Selling Points 98 R3 Corda’s Design Considerations 98 R3 Corda’s Design Example Architectures 102 Ethereum 104 Ethereum’s Selling Points 104 Ethereum’s Blockchain Design 105 Ethereum’s Design Example Architectures 107 Quorum 109 Quorum’s Selling Points 109 Quorum’s Blockchain Design Principles 111 Quorum’s Design Example Architectures 113 Summary 114 Chapter 4 Understanding Enterprise Blockchain Consensus 117 Blockchain Consensus Methods from a Historical Perspective 118 The Importance of Consensus 118 Byzantine Generals Problem 119 Byzantine Fault Tolerance 121 Comparing Enterprise Blockchain Consensus Methods 121 Proof-of-Work Consensus 122 Proof-of-Stake Consensus 124 Comparing Proof of Work and Proof of Stake 125 Proof of Elapsed Time 126 Delegated Proof of Stake 128 Delegated Byzantine Fault Tolerance 129 Practical Byzantine Fault Tolerance 130 Istanbul Byzantine Fault Tolerance 130 Raft Consensus 131 Directed Acyclic Graph 132 Blockchain Consensus Evaluation 134 Summary 135 Chapter 5 Enterprise Blockchain Sales and Solutions Engineering 137 Enterprise Blockchain Sales Cycle 137 Blockchain Roles (Stakeholders) 139 IT-Based Sales Cycles 141 Presales Tasks 143 Selling Enterprise Blockchain Solutions 152 Sales Engineering Success 159 Summary 162 Chapter 6 Enterprise Blockchain Economics 163 Introduction to Enterprise Blockchain Economics 163 Enterprise Ecommerce Business Models 163 Value Creation 164 Blockchain Payment Gateways 164 Stablecoins 165 Blockchain Funding and Costs 166 CAPEX and OPEX 166 Cost Considerations 168 Enterprise Blockchain Cost Models 173 Return on Investment 174 Total Cost of Ownership 176 ROI vs TCO 177 Potential Cost Efficiencies 177 Reducing Burdened Labor Costs 177 Using OPEX over CAPEX 179 Lower Transaction Costs 179 Costless Verification 179 Intermediary Roles and Blockchain 179 Summary 181 Chapter 7 Deploying Your Blockchain on BaaS 183 Blockchain as a Service Overview 183 Why Use a Blockchain as a Service? 184 Benefits of Using a Blockchain as a Service 184 Negatives of Using a Blockchain as a Service 185 Blockchain as a Service for Sales Teams 186 Blockchain as a Service Providers 186 Amazon Web Services Options 187 AWS Blockchain templates Deployment High-Level Steps 189 Understanding AWS Regions and Availability Zones 189 Deploying Hyperledger on AWS 191 Deploying AWS Managed Blockchain 221 IBM Cloud Blockchain Platforms 231 Blockchain Platform 2.0 231 Summary 239 Chapter 8 Enterprise Blockchain Use Cases 241 Merits of Blockchain Acceptance 241 Technical Merits of Blockchain 242 Business Merits of Blockchain 243 Common Elements of Blockchain Adoption 244 Financial Sector Use Cases 244 Cross-Border Payments 245 Know Your Customer 247 Peer-to-Peer Lending 248 Security Tokenization 248 Logistics Use Cases 249 Supply Chain 250 Internet of Things 250 Farm to Table 251 Government Use Cases 252 City/State of Dubai 252 Country of Georgia 252 Healthcare Use Cases 253 Other Potential Use Cases 254 Zero-Knowledge Proofs 254 Social Impact, Charity, and Fundraising 255 Distributed Cloud Storage 255 Identity Management 255 Summary 256 Chapter 9 Blockchain Governance, Risk, and Compliance (GRC), Privacy, and Legal Concerns 257 Governance, Risk, and Compliance 257 Compliance Benefits 258 Regulatory Oversight 259 Common Compliance Requirements 261 Smart Contract Legal Concerns 271 Smart Contract Enforcement 272 Smart Contract Adaptability 273 Legal Jurisdiction 274 Liability of Services 274 Financial Sector Compliance 275 Handling Customer Data 275 Intellectual Property 275 Auditing and Logging 276 Summary 277 Chapter 10 Blockchain Development 279 Common Programming Languages 279 Most Common Development Languages 280 Less Widely Used Development Languages 282 Summary of Blockchain Platforms 283 Ethereum Development 284 Smart Contracts 284 Ethereum Ecosystem 288 Ethereum Networks 291 Ethereum Nodes 295 Solidity Programming Language 296 Ethereum APIs 297 Ethereum Testing 299 Hyperledger Development 303 Chaincode 303 Hyperledger Fabric Consensus Options 305 Hyperledger Fabric Database Options 305 Client Applications 306 Fabric REST Services 307 Service Discovery 307 Hyperledger Composer 307 R3 Corda Development 310 Corda Consensus Model 311 CorDapps 311 Corda Network and Nodes 312 Corda Service Hub 312 Corda Doorman 313 Corda Flows 313 Client RPC 313 Oracles 313 Corda DemoBench 313 Quorum Development 315 Quorum vs Ethereum 315 Quorum Cakeshop 315 Blockchain Performance 316 Permission or Permissionless Performance 318 Performance Testing 319 Blockchain Integration and Interoperability 320 Data Exchange Methods 321 Hash Timed Locks 321 Relays and Gateways 321 Summary 322 Chapter 11 Blockchain Security and Threat Landscape 323 Blockchain Security Basics 323 Confidentiality, Integrity, and Availability 324 Blockchain Best Practices 325 Blockchain Security Audits 327 Blockchain Security Assumptions 328 Blockchain Cryptography 328 Blockchain Risks 332 Risk Assessment 332 Risk Mitigation 333 Blockchain Threat Landscape 335 51 Percent Attacks 335 Phishing Attacks 336 DDOS Attacks 336 DNS Hijacking Attacks 337 Eclipse Attacks 337 Insider Attacks 338 Replay Attacks 338 Routing Attacks 339 Sybil Attacks 339 Smart Contract Security 339 Smart Contract Legal Prose 339 Smart Contract Vulnerabilities 340 Blockchain-Specific Features 340 Ethereum 341 Hyperledger Fabric 343 R3 Corda Blockchain 344 Quorum 345 Summary 347 Chapter 12 Blockchain Marketplace Outlook 349 Technology Investments 349 Investments in Blockchain350 Blockchain Market Patents 350 Blockchain Market Growth 352 Complementary and Adverse Blockchain Acceptance Drivers 352 Blockchain Expertise Demand 353 Blockchain Market Expertise Expansion 353 Blockchain Certifications 354 Blockchain Institute of Technology 355 Blockchain Council 355 Blockchain Training Alliance 356 Summary 357 Index 359