Blockchain research

While major innovations have been made in blockchain technology in recent years, the area is still
very ripe for further research. Some selected research topics are listed as follows with some
information about existing challenges and state of the art. Some ideas are also presented in the
following subsections on how to address these issues. S

Smart contracts

Significant progress has been made in this area to define the key requirements of smart contracts
and development of templates. However, further research is required in the area of making smart
contracts more secure and safe.

Centralization issues This is true for especially Bitcoin mining centralization, there is a growing
concern about how Bitcoin can be decentralized again.

Limitations in cryptographic functions

Cryptography used in the Bitcoin blockchain is exceptionally secure and has stood the test of time. In
other blockchains, similar security techniques are used and are also very secure. However, specific
security issues such as the possibility of generation and usage of duplicate signature nonces in
elliptic curve digital signature schemes (leading to private key recovery attack), collisions in hash
functions, and a possibility of quantum attacks that may break the underlying cryptographic
algorithms remain an exciting area of research.

Consensus algorithms

Research in PoS algorithms or alternatives to PoW is also an important area of research. This is
especially relevant due to the fact the current Bitcoin network's power consumption is expected to
reach almost 125 TWh by the end of 2018. Currently it is almost equivalent to the country of Israel in
terms of electricity consumption. It has also been suggested that instead of performing an inefficient
or single-purpose type of work as is the case with Bitcoin's PoW, the network power can be used to
solve some mathematical or scientific problems. Also, alternatives such as PoS algorithms have
already gained much traction and are due to be implemented in major blockchains, for example,
Ethereum's Casper. However, so far, PoW remains the best option for securing a public blockchain.

Scalability

A detailed discussion has already been carried out on scalability in Chapter 18, Scalability and Other
Challenges; briefly, it is sufficient to say in this section that while some progress has already been
made, still there is a need for more research to enable on-chain scalability and further improve off-
chain solutions such as state channels. Some initiatives like block size increase and transaction-only
blockchains (without blocks) have been proposed to address scalability issues that increase the
capacity of the blockchain itself instead of using side channels. Examples of without blocks
implementation include IOTA (Tangle). It is a DAG which is used to store transactions as compared to
traditional blockchain solutions where a block is used to store transactions. This makes it inherently
faster as compared to block-based blockchains such as Bitcoin where waiting time between block
generations is at least approximately 10 minutes.
Code obfuscation

Code obfuscation by using indistinguishability obfuscation can be used as a means to provide

Notable projects

Following is a list of notable projects in the blockchain space that is currently in progress. In addition
to these projects, there is also a myriad of start-ups and companies working in the blockchain space
and offering blockchain-related products.

Zcash on Ethereum

A recent project by the Ethereum R&D team is the implementation of Zcash on Ethereum. This is an
exciting project whereby developers are trying to create a privacy layer for Ethereum using ZK-
SNARKs already used in Zcash project. With Zcash implementation on Ethereum, the aim is to create
a platform that allows applications such as voting where privacy is of paramount importance. It will
also allow the creation of anonymous tokens on Ethereum that can be used in a number of
applications.

CollCo

This is a project developed by Deutsche Borse which is based on the Hyperledger code base and is
used for managing commercial bank cash transfers. Collateralized Coin (CollCo) provides a
blockchain-based platform that allows real-time transfer of commercial bank money while still
relying on traditional capabilities provided by Eurex Clearing CCP. This is a major project that can be
used to address inefficiencies in the post-trade settlement processes.

Cello

As of February 2017, this is the most recent addition to Hyperledger project. This project aims to
provide on-demand BaaS which will make deployments and management of multiple blockchains
convenient and easy for users. It is envisioned that Cello will support all future and current
Hyperledger blockchains, such as Fabric and Sawtooth Lake.

Qtum

This project is based on the idea of combining capabilities of Bitcoin and Ethereum blockchains.
Qtum makes use of the Bitcoin code base but uses Ethereum's EVM for smart contract execution.
Ethereum smart contracts can run using Bitcoin's UTXO (unspent transactions) model

Bitcoin-NG

This is another proposal for addressing scalability, throughput, and speed issues in the Bitcoin
blockchain. Next Generation (NG) protocol is based on a mechanism of leader election which verifies
transactions as soon as they occur, as compared to Bitcoin's protocols, where the time between
blocks and block size are the key limitations concerning scalability.

Solidus

This is a new cryptocurrency which provides a solution for selfish mining while addressing scaling
and performance issues. It also addresses confidentiality issues. It is based on permissionless
Byzantine consensus. The protocol in its current state is comparatively complex and is an open area
for research.

Hawk

This is a project that is aiming to address privacy issues of smart contracts in blockchains. It is a
smart contract system that allows encryption of transactions on the blockchain. Hawk can generate
a secure protocol for interaction with blockchains automatically without the need for manually
programming the cryptographic protocol.

Town-Crier

This is a project that is aiming to provide real-world, authentic feed into smart contracts. This system
is based on Intel's SGX trusted hardware technology. This is a step further in Oracle design whereby
smart contracts can request data from online sources while preserving confidentiality.

SETLCoin

This is a system built by Goldman Sachs and is filed for the patent under the Cryptographic currency
for securities settlement application. As the name suggests, this cryptocurrency coin can be used for
fast and efficient settlement. The technology makes use of virtual wallets to exchange assets over
the network between peers and allows immediate settlement via ownership of SETLCoin

TEEChan

This is novel idea of using Trusted Execution Environments (TEEs) to provide a scalable and efficient
solution for scaling the Bitcoin blockchain. This is similar to the concept of payment channels
whereby off-chain channels are used for faster transfer of transactions. The principal attraction in
this idea is that it is implementable on Bitcoin blockchain without the need for any changes in the
Bitcoin network because it is an off-the-chain solution.

Falcon

Falcon is a project that helps Bitcoin to scale by providing a fast relay network for broadcasting
Bitcoin blocks over the network. The core idea revolves around a technique to reduce orphan blocks,
thus helping with the overall scalability of the Bitcoin network. The technique used for this purpose
has been called application-level cut-through routing.

Bletchley

This project has been introduced by Microsoft, indicating the commitment by Microsoft to
blockchain technology. Bletchley allows the use of Azure cloud services to build blockchains in a
user-friendly manner. A major concept introduced by Bletchley is called cryptlets, which can be
thought of like an advanced version of Oracles that reside outside the blockchain and can be called
by smart contracts using secure channels. These can be written in any language and execute within a
secure container. There are two types of cryptlets: utility cryptlets and contract cryptlets. The first
type is used to provide basic services such as encryption and basic data fetching from external
sources, whereas the latter is a more intelligent version that is created automatically when a smart
contract is created on the chain and resides off the chain but still linked to the onchain contract. Due
to this off-chain existence, there is no need to execute the contract cryptlets on all nodes of the
blockchain net.
Casper

This is the Proof of Stake algorithm for Ethereum in development. Significant research has already
been conducted in this area and is expected to be implemented in 2017. The nodes become bonded
validators in a Casper-based Ethereum network and are required to pay a security deposit for them
to be able to propose new blocks