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Blockchain and Cryptocurrency Blockchain and Cryptocurrency: A comparative framework of the main Architectural Drivers Martin Garriga Maxmiliano Arias Alan De Renzis CONICET, National Council for Fidtech Fidtech Scientific and Technical Research Independencia 596 Independencia 596 Buenos Aires 1400 Neuquen 8300, Argentina Neuquen 8300, Argentina Neuquen 8300, Argentina maximiliano.arias@fidtech.net alan.derenzis@fidtech.net martin.garriga@fi.uncoma.edu.ar ABSTRACT the success of Bitcoin cryptocurrency [13]. Its main goal is to Blockchain is a decentralized transaction and data manage- create a decentralized environment where no third party is in ment solution, the technological weapon-of-choice behind the control of the transactions and data [26]. This technology is success of Bitcoin and other cryptocurrencies. As the number now mainstream because it solves problems in a way people and variety of existing blockchain implementations continues could not before, generating a business value-add that will 1 to increase, adopters should focus on selecting the best one to reach about $176 billion by 2025 and $3.1 trillion by 2030 . support their decentralized applications (dApps), rather than The prime reason behind this expansion is the already wide- developing new ones from scratch. In this paper we present spread adoption of blockchain in financial transactions and a framework to aid software architects, developers, tool se- cross-border payments [6]. lectors and decision makers to adopt the right blockchain Even though the most popular blockchain implementation technology for their problem at hand. The framework ex- is Bitcoin, a myriad others are currently running or still poses the correlation between technological decisions and in development. Different implementations vary in many architectural features, capturing the knowledge from existing ways such as their purpose, governance and efficiency, among industrial products, technical forums/blogs, experts’ feed- others. back and academic literature; plus our own experience using However, no single blockchain by itself can meet the require- and developing blockchain-based applications. We validate ments for all usage scenarios, e.g., those that require real-time our framework by applying it to dissect the most outstand- processing. When building blockchain-based applications, we ing blockchain platforms, i.e., the ones behind the top 10 need to systematically consider the key technological features cryptocurrencies apart from Bitcoin. Then, we show how we and configurations, and assess their impact on quality at- applied it to a real-world case study in the insurtech domain. tributes for the overall systems [25]. Moreover, to determine which blockchain implementation should be leveraged (or CCS CONCEPTS even if a new one is needed) for a given application, it is crucial to be familiar with the differences among them [7]. •Computer systems organization → Embedded systems; Re- In this paper we propose a framework to help software dundancy; Robotics; •Networks → Network reliability; architects, developers, tool selectors and decision makers to 2 KEYWORDS adopt the right blockchain technology for their problem at hand. Even though new blockchains increased exponen- Blockchain, Cryptocurrencies, Software Architectures tially up to 2017, nowadays it makes no sense to “reinvent ACM Reference format: the wheel” by building a custom blockchain from scratch Martin Garriga, Maxmiliano Arias, and Alan De Renzis. 2018. every time; but rather to leverage, and probably combine arXiv:1812.08806v1 [cs.CR] 29 Nov 2018 Blockchain and Cryptocurrency: A comparative framework of the existing, battle-hardened solutions to support new applica- main Architectural Drivers. In Proceedings of Sample Conference, tions. For crafting our framework, we surveyed the knowledge , November, 2018 (CONF), 8 pages. from existing industrial products, technical forums/blogs, aca- DOI: xx.xxx/xxx x demic literature and our own experience using and developing blockchain-based applications. 1 INTRODUCTION Afterwards, we applied the framework to analyze and score the most outstanding solutions in the real-world market — Blockchain is a decentralized transaction and data manage- 3 ment solution, well-known for being the technology behind i.e., the technology behind the top 11 cryptocurrencies , giving an overview of the current ecosystem of mainstream Permission to make digital or hard copies of part or all of this work blockchain solutions. We then show how such an assessment for personal or classroom use is granted without fee provided that framework can be applied through a real-world case study in copies are not made or distributed for profit or commercial advantage and that copies bear this notice and the full citation on the first page. the insurtech domain. Copyrights for third-party components of this work must be honored. 1 For all other uses, contact the owner/author(s). https://www.gartner.com/doc/3627117/ CONF, forecast-blockchain-business-value-worldwide 2 © 2018 Copyright held by the owner/author(s). xxx-x-xxxx-xxxx- For the sake of simplicity we will use the word blockchain to refer to x/xx/xx. $15.00 any distributed ledger implementation, except when explicitly clarified. DOI: xx.xxx/xxx x 3According to their market cap. See: https://coinmarketcap.com CONF, November, 2018, M. Garriga et al. The rest of the paper is organized as follows. Section 2 but parameterisably expensive to compute. Given the ludi- provides an overview of key concepts in blockchain and cryp- crous energy consumption of PoW5, other blockchains opted tocurrencies, as well as related work. Section 4 details our for greener but rather centralized options such as Proof-of- framework for assessment of blockchain technologies. Sec- Stake [8] (PoS), where miner are limited to a percentage of tion 5 assesses the top blockchain solutions by means of our transactions that is reflective of his or her ownership stake framework and then applies it to a real-world case study. of the token, and lately Delegated Proof of Stake (DPoS). Finally, Section 6 concludes the paper. Finally, several blockchains provided their own hybrid or ad-hoc protocols [16]. 2 BACKGROUND The first generation of blockchains (e.g., Bitcoin) provided very limited capability to support programmable transac- A blockchain is a distributed ledger, in the form of a totally tions, apart from value transfer from one account to another. ordered, back-linked list of blocks [13]. Each block contains The second generation (e.g., Ethereum [3]) aims to provide transactions that are hashed into a binary hash tree (also a general-purpose programmable infrastructure, whose pro- called a merkle tree), with the top (root) of the tree stored grams are known as smart contracts [21, 25]. Originally, alongside the transactions. Each block also contains the smart contracts were defined as the digital equivalent of a previous block’s hash, thus guaranteeing integrity and deter- paper contract: an agreement between parties with a set of minism — i.e., any node replaying all blocks starting from promises that are legally enforceable [21]. Nowadays, any the first one (genesis block) should end up with the same general purpose computation that takes place on a blockchain state as every other node [3]. This forbids to call external or distributed ledger is considered a smart contract. APIs whose responses may change over time4. Blockchain distribution is coupled with trust creation and a consensus 3 RELATED WORK mechanism for determining agreement on the next block to add. Cryptocurrencies have emerged as the first generation of Yli-huumo et al. [26] identified that a majority of the blockchain- blockchain-based applications, as digital currencies that are related papers focused on certain technical challenges: through- based on cryptography techniques and peer-to-peer networks. put, latency, size and bandwidth, security, wasted resources, The first and most popular example is Bitcoin [1, 13]. usability, versioning, hard forks, and multiple chains [20]. One of the fundamental disruptions that blockchain tech- In addition, they identified privacy, smart contracts, new nology is causing is the redefinition of digital trust, which cryptocurrencies, botnets, consensus protocols and trust- manifests itself in a fully distributed way without anyone worthiness. As future research directions, authors highlight having to trust any single member of the network. The only scalability issues; other uses beyond cryptocurrency systems trust required is that, on average, the participants of the (i.e., dApps) and effectiveness of the proposed solutions –. network are not colluding against the others in a coordinated the latter being one of the contributions of our paper. In a manner [25]. similar direction, Alharby and Van Morsel [1] present a sys- Transactions are data packages that store information tematic mapping study of smart contracts. They identified — e.g., monetary value for cryptocurrencies, or results of four groups according to the challenges tackled: codifying, function calls for other decentralized applications (dApps). security, privacy and performance. The integrity of a transaction is checked by algorithmic rules Scriber [18] performed a literature review and evaluated 23 and cryptographic techniques. A transaction, signed by blockchain implementation projects. This evaluation revealed its initiator, is sent to a node connected to the blockchain 10 architectural or blockchain characteristics that can help network, which validates the transaction and
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