Potentials of Blockchain Technologies in Manufacturing
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SCUOLA DI INGEGNERIA INDUSTRIALE E DELL’INFORMAZIONE Laurea Magistrale in Ingegneria Gestionale Potentials of Blockchain Technologies in Manufacturing: Study of applicability of Blockchain technology in manufacturing: Blockchain typologies, manufacturing scenarios, application benefits and technology constraints. Supervisor: Prof. Marco TAISCH Co-Supervisor: Ing. Claudio PALASCIANO Master of Science Thesis of: Simone VACCA TORELLI 905294 Academic Year: 2018/19 This page is intentionally left blank 1 “So, the problem is not so much to see what nobody has yet seen, as to think what nobody has yet thought concerning that which everybody sees.” Arthur Schopenhauer. 2 This page is intentionally left blank 3 Acknowledgements The process of writing this thesis has been both challenging and an invaluable learning experience. The writing of this thesis would not have been possible without the help of several knowledgeable and resourceful people, and I would like to take this opportunity to express my sincerest gratitude for their assistance. First, I would like to show my deepest gratitude to my academic supervisor, Prof. Marco Taisch, and, in particular, to my co-supervisor, Eng. Claudio Palasciano, for giving me the opportunity to work on this thesis and for the feedbacks that I have received which have been highly useful in setting the structure and the direction of this thesis. Lastly, I would like to express my sincerest gratitude and appreciation to my family and friends, for always supporting me and being there for me throughout all my studies. Thank you! Milan, December 2019. 4 This page is intentionally left blank 5 Abstract This thesis analyses the possibility of application of the innovative Blockchain technology within Manufacturing, taking into consideration different application scenarios, the possible resulting benefits and the technological constraints. Thanks to the diffusion of Bitcoins, which have gained great notoriety in recent years, the Blockchain has attracted the attention not only of researchers but also of investors who have begun to investigate the possibility of using this technology in other areas as well. Therefore, in this thesis this technology is first examined from an informatics point of view to understand the basic working mechanism and to find out what are the motivations that make it so interesting and so versatile; then the phenomenon of the fourth industrial revolution, the so-called Industry 4.0, is investigated in order to contextualize the current production scenario and the technologies with which the manufacturing world is evolving; finally, the definition of a decision-making framework will make it possible to establish the applicability of the Blockchain within different industrial applications taking into account the main technologies with which it will have to interface, the requirements it will have to respect and the benefits it will bring. 6 This page is intentionally left blank 7 Abstract (Italian Version) La tesi analizza la possibilità di applicazione della innovativa tecnologia Blockchain all’interno del Manufacturing, tenendo in considerazioni diversi scenari di applicazione, i possibili benefici risultanti ed i vincoli tecnologici. Grazie alla diffusione dei Bitcoin, che hanno acquisito una grande notorietà negli ultimi anni, la Blockchain ha richiamato l’attenzione non solo di ricercatori ma anche di investitori che hanno iniziato ad indagare la possibilità di utilizzare questa tecnologia anche in altri ambiti. Pertanto, in questa tesi viene dapprima analizzata questa tecnologia da un punto di vista informatico per capire il meccanismo base di funzionamento e per scoprire quali sono le motivazioni che la rendono così interessante e così versatile; quindi viene analizzato il fenomeno della quarta rivoluzione industriale, il cosiddetto Industry 4.0, al fine di contestualizzare al meglio l’attuale scenario produttivo e le tecnologie con cui il mondo del Manufacturing si sta evolvendo; infine, la definizione di un framework decisionale permetterà di stabilire l’applicabilità della Blockchain all’interno di diverse applicazioni industriali tenendo conto delle principali tecnologie con cui essa dovrà interfacciarsi, dei requisiti che dovrà rispettare e dei benefici che potrà portare. 8 This page is intentionally left blank 9 SUMMARY Acknowledgements ............................................................................................ 4 Abstract ............................................................................................................. 6 Abstract (Italian Version) .................................................................................. 8 Table of Figures ................................................................................................. 14 Table of Tables ..................................................................................................18 Table of Acronyms ........................................................................................... 20 1) Introduction to the Research ........................................................................ 22 2) Introduction to the Blockchain Technology .................................................. 24 2.1) What Blockchain Is ................................................................................. 24 2.1.1) History: from the Hash-Chain to the Bitcoin Block-Chain ..................................... 24 2.1.2) Main Elements of a Blockchain .............................................................................. 26 2.1.2.1) Centralised, Decentralised, Distributed systems .............................................. 26 2.1.2.2) Blocks in the Blockchain .................................................................................. 27 2.1.2.3) Mining .............................................................................................................. 27 2.1.2.3.1) Rewards and Transactions Fees ................................................................. 28 2.1.2.4) Hash Value ....................................................................................................... 29 2.1.2.4.1) Hash Algorithm: SHA256 .......................................................................... 29 2.1.2.5) The Timestamp ................................................................................................. 30 2.1.2.6) The Genesis Block ............................................................................................. 31 2.1.2.7) Digital signature: Public & Private Key Pairs ................................................... 32 2.2) How Blockchain Works .......................................................................... 34 2.2.1) Stepping through key elements of Blockchain: ...................................................... 34 2.2.2) Network Propagation of the Blockchain ................................................................ 42 2.2.2.1) Block Size and Propagation Delay .................................................................... 43 2.2.2.2) Blocks Dissemination and Forks ..................................................................... 44 2.2.2.3) Improving Network Propagation Speed .......................................................... 47 2.2.3) Fork Classes and Hard & Soft Types ...................................................................... 47 2.2.4) Scalability and the Trilemma ................................................................................. 49 2.2.5) Access Control ........................................................................................................ 54 2.2.6) Consensus Mechanism ........................................................................................... 57 2.2. Unanimity in unreliable distributed systems: The Byzantine Generals Problem . 58 2.2.6.1.1 Illustration of the problem .......................................................................... 59 2.2.6.1.2 Solutions to the problem ............................................................................. 59 2.2.6.2 Consensus Algorithm ........................................................................................ 60 2.2.6.2.1 Classification of Consensus Algorithms ...................................................... 60 2.2.6.2.1.1) Proof of Work (PoW) ............................................................................ 61 2.2.6.2.1.2) Proof of Stake (PoS) ............................................................................ 65 2.2.6.2.1.3) Delayed Proof of Work (dPoW) .......................................................... 66 2.2.6.2.1.4) Delegated Proof of Stake (dPoS) ......................................................... 67 10 2.2.6.2.1.5) Leased Proof of Stake (lPoS) ............................................................... 68 2.2.6.2.1.6) Proof of Authority (PoA) ..................................................................... 69 2.2.6.2.1.7) Proof of Reputation (PoRep) .............................................................. 69 2.2.6.2.1.8) Proof of Elapsed Time (PoET) ............................................................ 70 2.2.6.2.1.9) Proof of Space (PoSp) ......................................................................... 70 2.2.6.2.1.10) Proof of History (PoH) ....................................................................... 71 2.2.6.2.1.11) Proof of Stake Velocity (PoSV) ........................................................... 71 2.2.6.2.1.12) Proof of Importance (PoI) ................................................................