Architecting Enterprise Blockchain Solutions

DEMYSTIFY ARCHITECTING COMPLEX BLOCKCHAIN APPLICATIONS IN ENTERPRISE ENVIRONMENTS

Architecting Enterprise Blockchain Solutions helps engineers and IT administrators understand how to architect complex blockchain applications in enterprise environments. The book takes a deep dive into the intricacies of supporting and securing blockchain technology, creating and implementing decentralized applications, and incorporating blockchain into an existing enterprise IT infrastructure.

Blockchain is a technology that is experiencing massive growth in many facets of business and the enterprise. Most books around blockchain primarily deal with how blockchains are related to cryptocurrency or focus on pure blockchain development. This book teaches what blockchain technology is and offers insights into its current and future uses in high performance networks and complex ecosystems.

* Provides a practical, hands-on approach
* Demonstrates the power and flexibility of enterprise blockchains such as Hyperledger and R3 Corda
* Explores how blockchain can be used to solve complex IT support and infrastructure problems
* Offers numerous hands-on examples and diagrams

Get ready to learn how to harness the power and flexibility of enterprise blockchains!

JOSEPH HOLBROOK is an expert on enterprise cloud and blockchain architectures, a widely published course author, and owner of the online learning platform myblockchainexperts.com. Joe is a Certified Bitcoin Professional (CBP), Certified Blockchain Solutions Architect (CBSA), and holds industry certifications from Amazon Web Services, Google Cloud Platform, Brocade, CompTIA, Blockchain Training Alliance, and numerous others. He has worked for companies such as HDS, 3PAR Data, Brocade, Northrup Grumman, Siemens Nixdorf, and Hitachi Data Systems. 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