Exploring Blockchain \u2013 Technology Behind Bitcoin and Implications for Transforming Transportation, Final Report

2018PDFTech ReportPRC 17-13 FCurrencyMoneyTransportationFinanceFinancingElectronic commerceDistributed databasesDistributed processingBlocktrainBitcoinCrypto CurrenciesTexasTexas A&M Transportation InstituteRajbhandari, RajatTexas A&M Transportation InstituteUS Transportation CollectionWith the release of the Bitcoin concept into the public domain in late 2008, the world of cryptocurrency (electronic currency such as Bitcoin, Ethereum, and hundreds of others) and distributed computing gained a new kind of trust protocol called \u201cblockchain.\u201d Blockchain is a distributed immutable (cannot be deleted) ledger of electronic transactions. It uses a point to point protocol with financial incentives for computer nodes to validate and secure transactions. In addition to featuring an immutable ledger of transactions, Blockchain also provides security by having no single point of failure, pseudo anonymity, and traceability. Public blockchain implementations such as Bitcoin operate in an open source environment. That means anybody can join the network as a mining node (user), see the code base, and contribute. On the other hand, private and permissioned blockchain operates in a controlled environment in which an operator controls who can join as nodes and users, and as such, do not need crypto currency as economic incentives to secure the underlying blockchain. Public blockchain needs economic incentives in the form of crypto currency to validate and secure transaction blocks. Because of the open source environment where crypto currencies and public blockchain operate, companies involved in this technology have proliferated. Hundreds of startups have created their own versions of blockchain built for specific applications such as internet of things, identification, land transfer, etc., along with crypto currencies or tokens to provide economic incentives to secure blockchain. These startups are financially supported by big banks, venture capitalists, technology companies, and even crowd sale of tokens. In 2016, over $1 billion (US) has been invested in blockchain-related startups all over the globe