| Abstract | The Distributed Ledgers Technology (DLT) Sunyaev [2020] refers to decen- tralized technological infrastructure and protocols that allow all participants in the connected system to access, verify, and store updates in an immutable and traceable way across the whole decentralized system. Blockchain technol- ogy Nakamoto [2009] is a typical example of DLT that can record, validate, and store transactions using cryptographic Cho and Lee [2019] hash signatures. In DLT, each distributed participant, as a ledger, is able to process and verify ev- ery transactional item that can be processed based on a consensus of multiple participants. Unlike the central authority-based ledger systems, which need a central authority to validate the authenticity of transactions recorded in the ledgers, the DLT utilizes cryptography algorithms to automatically access, validate, and record transactions based on a specific consensus algorithm in the decentralized network Miraz and Ali [2018a].
As a typical DLT implementation, the blockchain bundles transactions into ’blocks’ that are ’chained’ together through their respective cryptographic hashes. Blockchain technologies have attracted much attention across indus- tries and sectors, such as cryptocurrencies, supply chains, finance systems, banking systems, etc. Alladi et al. [2019] The DLT has great potential to im- prove the way of governance, instituting, and corporations work by offering a way to securely and efficiently create a tamper-proof record of sensitive ac- tions and activities. In recent, DLT has been widely researched and several distributed ledger solutions have been developed, such as Hyperledger Fabric, Ethereum, Quorum, R3 Corda, etc.
The DLT is based on cryptography algorithms Miraz and Ali [2018b], de- centralization networks Zwitter and Hazenberg [2020], and consensus protocols Wahab and Mehmood [2018], which ensure trust among participants through fair execution of transactions. Data in DLT is structured into chained blocks inherent security properties. Each new block is chained to all the blocks before it using a cryptographic chain in such a way that it is nearly impossible to tam- per with the data stored in the ledger Zhao et al. [2019]. All transactions within the blocks are validated and agreed upon through a consensus mechanism, en- suring that each transaction is correct and true. According to the nature of the DLT, there is no single point of failure, and a single user cannot change the record of transactions. However, DLT based technologies are different with many critical security aspects. In DLT or blockchain, the data is organized by cryptographically connected chained blocks and each new block connects to the blocks chained before it in a cryptographic chain Li et al. [2019b]. In this decentralized system, a single point of failure at each participant cannot change the record of transactions.
This chapter has been divided into three distinct sections. Following is an overview of content covered in each section:
Section 1 explains the evolution of distributed databases into blockchain and DLTs (Distributed Ledger Technologies). It also elaborates the differences be- tween distributed databases, blockchain, and DLTs. After presenting the idea of the CAP theorem Frank et al. [2014], it further elaborates the relationship of three basics pillars of the CAP theorem, viz. 1) Consistency (C), 2) Avail- ability (A), and 3) Partition Tolerance (P). The first section also explains the constraints of DLTs for supporting only two of the three features of the CAP theorem and focuses on the three mechanisms of the POW (Proof of Work) Chepurnoy et al. [2017], PBFT (Practical Byzantine Fault Tolerance)Sukhwani et al. [2017], and TDAG (Transactions-based Directed Acyclic Graph) Yeow et al. [2017] for respectively achieving the AP, CP, and CA. This chapter will introduce the detailed DLT with respect to the CAP theorem along with its associated security and privacy issues. in the DLT. |
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