International Conference on Electrical Engineering and Computer Science (ICECOS) 2017

A Critical Review of Blockchain and Its Current

Applications
Bayu Adhi Tama, Bruno Joachim Kweka, Youngho Park, Kyung-Hyune Rhee⋆
Department of IT Convergence and Applications Engineering
Pukyong National University, Busan, South Korea
Email: {bayuat, drbruno}@pukyong.ac.kr; {pyhoya, khrhee}@pknu.ac.kr
⋆
corresponding author

Abstract—Blockchain technology has been known as a digital It enables trustless and reliable transaction where a centralized
currency platform since the emergence of Bitcoin, the first and management is not required though the users do not trust
the largest of the cryptocurrencies. Hitherto, it is used for the each other or there are unreliable users in the network.
decentralization of markets more generally, not exclusively for
the decentralization of money and payments. The decentralized Since then, blockchain has drawn a lot of attention to the
transaction ledger of blockchain could be employed to register, decentralized transaction ledger functionality which could be
confirm, and send all kinds of contracts to other parties in used to register, confirm, and send the payment or contracts.
the network. In this paper, we thoroughly review state-of-the- Furthermore, blockchain technology has been applied beyond
art blockchain-related applications emerged in the literature. A financial transactions, to any kind of transaction and applica-
number of published works were carefully included based on
their contributions to the blockchain’s body of knowledge. Several tions, i.e. healthcare, utilities, real estate, and the government
remarks are explored and discussed in the last section of the sector [5]. These are found to be feasible as the blockchain
paper. structure develop for Bitcoin is portable and extensible.
Index Terms—Blockchain; cryptocurrency; review; applica- Originally, the main area for blockchain is connecting cryp-
tions tocurrencies with conventional banking and financial institu-
tions. Blockchain technology offers a novel banking ecosystem
I. I NTRODUCTION thus enabling financial institutions to conduct their financial
A software system can be characterized into two main transactions directly between themselves without any cen-
architectural approaches, i.e. centralized and distributed [1]. In tral authorities or intermediaries. Every transaction must be
centralized software system, the nodes are located around and authenticated through the agreement of more than half of
connected with one central node of coordination. Distributed those participating in the network [6]. This means that no
system, on the contrary, have several connected nodes without participants would be able to modify any data within the
any central node of control. Fig. 1 illustrates the contrast blockchain without the approval of other participants.
of these two architectures. There are several benefits of a The objective of this paper is to provide and explore
distributed system, i.e. having more computing power by insight into blockchain technology and its current practical
combining the computing power of all connected nodes, an applications. The paper thoroughly classifies the published
increased reliability due to the fact that it does not have a works found in the literature, i.e. academic journals, con-
single of failure, and so forth. However, several drawbacks ferences, technical reports, and so on. Regarding the review
of a distributed system include communication overhead and studies about blockchain technology, several works have been
security issues which is related to misuse network access by conducted such as in [7], [8], [9], and [10]. However, most
untrustworthy nodes. studies have not considered a comprehensive discussion about
Meanwhile, blockchain can be seen as a part of the imple- blockchain-related applications.
mentation layer of a distributed software system. The data The rest of the paper is structured as follows. Section II
integrity in distributed systems can be achieved and main- presents an overview of blockchain technology, whilst Section
tained using blockchain [2]. Furthermore, blockchain could III describes in detail about the practical facets of blockchain.
be also considered as a purely peer-to-peer system which is Several remarks and an in-depth discussion are given in
made up of the individual nodes in a network. Dishonest Section IV, and finally some concluding remarks are drawn
and malicious peers become the crucial integrity threat in in Section V.
peer-to-peer systems. The individual nodes try to exploit the
system for their own purposes since unknown peers with II. F UNDAMENTALS OF B LOCKCHAIN T ECHNOLOGY
unknown reliability and trustworthiness may exist [3]. Thus, Blockchain is a type of distributed ledger (data structure)
these critical problems are needed to be solved by blockchain. which contains information about transactions or events. It is
Along with blockchain, Bitcoin was originally invented by replicated and shared among the participants in the network
Nakamoto [4] as the first and most prevalent cryptocurrency. [4]. The size of chain unceasingly increases since blocks are

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 International Conference on Electrical Engineering and Computer Science (ICECOS) 2017

TABLE I
T HE CURRENT EXISTING CRYPTOCURRENCY SYSTEMS

Cryptocurreny Year Hash Func- Mining Method

tion
Bitcoin [4] 2008 SHA-256 Find all possible nonce values
by computing proof of work
and other users agree and ver-
ify the proof.
Litecoin [11] 2011 Scrypt Similar to Bitcoin (proof of
work)
Peercoin [17] 2012 SHA-256d proof of work and proof of
stake
Primecoin [12] 2013 Cunningham proof of work
chain
Ripple [18] 2014 EC digital consensus system
signature
Ethereum [19] 2014 Ethash proof of work
Fig. 1. Centralized and distributed network architecture, adapted from [1] Permacoin 2014 Floating dig- proof of retreivability
[20] ital signature
Blackcoin [21] 2014 Scrypt proof of stake
Auroracoin 2014 Scrypt proof of work
[22]
Darkcoin [23] 2014 X11 proof of work
Namecoin [24] 2015 SHA-256d proof of work

hash of the first block is forwarded to the miner, who employs

it and generates a hash for the second block. In similar fashion,
Fig. 2. A chain of blocks - blockchain in the Bitcoin, adapted from [4] the third block creates a hash that comprises of the first two
blocks, and etc. All blocks in the blockchain can be traced
back to the genesis block [7] [15].
added and chained to the previous block using a hash function
Cryptocurrency has its own currency (coin). Mining is the
(see Figure 2 for further illustration of the Bitcoin’s blockchain
process of introducing a new block into blockchain. Each node
as an example). A cryptographic hash function is used to
uses blockchain to verify whether the coin is legitimate or if
produce a hash. For instance, Bitcoin uses SHA-256, whilst
it has not spent already. Before the transaction records are
Litecoin [11] and Primecoin [12] use Scrypt and Cunningham
appended into blockchain, a greater number of participants
chain, respectively. In addition, it enables us to simply verify
reach an agreement. Mining process is a resource-intensive
the input mapping to a given hash value. It would not be
task, thus makes it tough for an attacker to validate an invalid
feasible for two different inputs having the same hash [13].
transaction. Each mined-block is verified to see if it has
The ledger in the blockchain is validated and preserved by
whether a valid proof of work [12] or a proof of stake [16].
a network node (user) in pursuance of consensus mechanism
The followings are the prevalent steps in cryptocurrency: (i)
(a collection of rules that allow users to reach a mutual
a generated address (public key) is available for a user who has
agreement [14]) thereby a central authority or intermediary is
a wallet, (ii) a private key is assigned to the wallet. It is used to
not required. Each node keeps a complete replica of the entire
sign transaction and proving ownership, (iii) the payer sends
ledger. As the first aim of blockchain is to solve the problems
coin to the payee using given address and sign it using payer’s
exist in Bitcoin cryptocurrency, Section III discusses in detail
private key, and finally (iv) the transaction is validated via min-
the practical implementation of the blockchain for financial
ing process. Eleven cryptocurrency sytems are included in our
transaction.
study, i.e. Bitcoin [4], Litecoin [11], Peercoin [17], Primecoin
III. B LOCKCHAIN A PPLICATIONS [12], Ripple [18], Ethereum [19], Permacoin [20], Blackcoin
In this section, the implementation of blockchain technology [21], Auroracoin [22], Darkcoin [23], and Namecoin [24]. Ta-
in different areas are thoroughly discussed. Furthermore, such ble I summarizes the afore-mentioned cryptocurrency systems
applications have been categorized into several groups, i.e. which is presented in chronological order of occurrence.
financial services, healthcare, business and industry, and other
B. Healthcare
novel applications.
Blockchain has a tremendous potential in addressing the in-
A. Financial Service teroperability issues exist in the current healtcare systems [25].
Blockchain has been widely applied for financial transaction It can be used as a standard which allows the stakeholders, i.e.
which is so-called cryptocurrency. Nowadays, cryptocurrencies healthcare entities, medical researcher, etc to share electronic
have appeared as prominent software systems. Recalling the health record (EHR) in a secure manner [26]. Sharing of EHR
above-mentioned of Fig. 2, the first block or genesis block (is enables us to improve the quality of medical care [27] and
not appeared in the figure) contains the first transaction. The enhance the recommendation for doctors [28], for instance.

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 International Conference on Electrical Engineering and Computer Science (ICECOS) 2017

However, managing healthcare data, i.e. acquiring, storing, TABLE II

and analyzing is not a simple task, particularly in case of T HE CURRENT EXISTING BLOCKCHAIN FOR HEALTHCARE
privacy issues. Healthcare data should not be revealed to other Study Year Hash Function Mining Method
parties which it might be vulnerable to be used fraudulently HDG [29] 2016 NA NA
by malicious users or attackers. MedRec [30] 2016 Ethash proof of work
PSN [31] 2016 NA NA
In order to get the better of those issues, a healthcare data BBDS [32] 2017 SHA-256 proof of work
gateway (HDG) based on the blockchain storage platform
is proposed by [29]. It is a smartphone application which
can be used to manage and control the data sharing easily. gives transaction services in the absence of human interven-
The proposed system enables users to process the patient tion. The core of the proposed system is a transaction mode
data without exposing patient privacy. Furthermore, a private in which peer to peer transaction is performed autonomously,
blockchain cloud is used to stored the data thus ensuring whilst Bitcoin and IoTcoin are adopted as the currency and
the medical data can not be altered by anybody, including exchange certificate, respectively.
physicians and patients. The authors [35] consider the importance of food safety and
The work [30] emphasizes on the designing of a new quality when proposing a agri-food supply chain traceability
system to prioritize patient agency, called MedRec. It is a system using RFID and blockchain technology. Blockchain is
distributed ledger protocol that uses public key cryptography adopted for ensuring the shared and published information is
to create blockchain. The blockchain replicas are distributed on reliable and valid. Furthermore, a term ’smart manufacturing’
each node in the network. Similar to prior work, blockchain in the era of Industry 4.0 is also extensively discussed in
technology is used as a access control in order to automate [36] [37]. Industry 4.0 denotes the flexibility of products and
and track certain tasks, i.e. append a new record, change services to be shared over the Internet or other networks,
in viewership rights, etc. Furthermore, smart contracts on i.e. blockchain. With regard to the supply chain management,
an Ethereum blockchain [19] is utilized to create intelligent Industry 4.0 is expected to attain the circumstance of decen-
representation of EHR that are stored in each individual node. tralization and self-regulation.
Subsequently, the application of pervasive social network To date, an extension of cloud computing which is so-called
(PSN) based healthcare using blockchain is proposed by [31]. fog computing or edge computing, has been attracted authors
PSN allows us to share medical data acquired by medical to develop a fair payment system based on Bitcoin [38]. Fog
sensors. PSN-based healthcare system comprises two main computing can be regarded as a large-scale, ubiquitous, and
security protocols, i.e. an authentication protocol between decentralized system which processes any computing tasks.
medical sensors and mobile devices in wireless body area The proposed system is established to improve the traditional
network (WBAN) and an EHR data sharing using blockchain e-cash system which needs a trusted authority, i.e. bank to
in PSN area. Each node in the PSN is responsible for gener- generate payment token. By employing the Bitcoin-based
ating and broadcasting of medical data transactions, i.e. node payment, the fog users (outsourcers) can directly make a
address and medical sensors. The miners, on the other hand, transaction to the fog nodes (workers) without involving third
are responsible for transaction verification and new block party. The authors argue that the proposed system can assure a
creation. payment for any completed tasks performed by honest workers
Lastly, a blockchain-based access control mechanism is pro- regardless of the outsourcers is malicious or not.
posed by [32]. Access control includes identification, authen-
tication, and authorization process. It ascertains a condition of D. Other Implementations
being accountable where user access can be traced for what In this section, the current implementation of blockchain in
particular action in a system. The proposed system permits many areas such as right management system, reputation sys-
users to access EHR from a shared data pools using blockchain tem, digital content distribution system, WiFi authentication
after verifying their identity and cryptographic keys. To and IoT security are discussed.
achieve user’s authentication, an identity based authentication The two papers [39] [40] present and discuss a new concept
is adopted. In addition, an efficient lightweight block format is of decentralized right management system by using blockchain
proposed to enhance the current implementation of blockchain. technology (BRIGHT). It is entirely different with the tradi-
Table II compares the related study of blockchain technology tional approach in which a central third-party is commonly
for healthcare application. taken into account. The proposed system is expected to have
a strong mechanism against attack and it enables us to lower
C. Business and Industry user’s service fees. In addition, a reputation system is great
The emergence of Internet of Things (IoT) has brought potential to measure the trust valuation of us in the commu-
many advantages such as delivering an inter-connection be- nity. It is measured based on our previous transactions and
tween objects and humans. This motivates authors in [33] interactions in such network, i.e. e-commerce website [41].
[34] to propose an e-business architecture which is particularly By involving blockchain in the reputation system, it can solve
developed for IoT environment. For this purpose, distributed the major issues exist in the current reputation system, i.e.
autonomous corporation (DAC) is adopted as an entity that freeloaders.

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 International Conference on Electrical Engineering and Computer Science (ICECOS) 2017

number of papers were comprehensively chosen from the

online database then they were classified into several different
areas. This paper offers an understanding of the current
blockchain research and its real-world implementations.
ACKNOWLEDGMENT
This work was supported by Institute for Information &
communications Technology Promotion (IITP) grant funded
by the Korea government (MSIT) (2017-0-00156, The Devel-
opment of a Secure Framework and Evaluation Method for
Blockchain)
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