On Blockchain: Design Principle, Building Blocks, Core Innovations, and Misconceptions

Abstract

Blockchain has become one of the hottest research areas in recent years. The technology could potentially lead to a new generation of decentralized applications and decentralized autonomous organizations. Unfortunately, there is simply too much misinformation regarding blockchain. Most notably, blockchain has been used as a buzzword synonymous with data immutability and trust. In fact, this is far from the truth. In this article, we provide a concise description of exactly what blockchain technology is, including its design principle, building blocks, core innovations, and benefits. This is followed by an analysis of data immutability. We show that to create an insurmountable barrier against attacks on data immutability, decentralization and system scale are both necessary. Based on this analysis, we further dissect what benefits private and consortium blockchain could actually offer when decentralization is removed. We show that private and consortium blockchain cannot offer data immutability and trust as many works in the literature have claimed or implied. Instead, the centralized version of blockchain technology provides an elegant solution to achieving fault tolerance and atomic contract execution, which could make private and consortium blockchain useful for enterprises that would like to provide high availability to their customers and for their internal operations.