Customize a Blockchain Model Using Google Cloud Platform

• By Olivia Jensen
• 10-02-2022
• Cryptocurrency

As a follow-up to our previous article on the blockchain, we will show you step by step how to use Google's Cloud Platform to create your own blockchain, with its very own genesis block. We'll also introduce the concept of a task queue and a workflow engine. By the end of this article, you should have a good understanding of what it takes to build a simple blockchain in the cloud. To follow along, you need basic knowledge of Python and NodeJS. You can either complete each section from scratch or download all source code from Github.

Since the advent of Bitcoin in 2009, there has been an increasing interest in implementing decentralized systems using blockchain technology.

In fact, according to this report by Deloitte University Press, blockchain implementations can be categorized into four different types:
• Permissioned ledgers that implement private blockchain solutions for intra-organizational use Private blockchains, which serve as a platform to facilitate secure transactions between known partners Public blockchains, such as Bitcoin and Ethereum, which allow anyone to join and read or write transactions Open distributed ledger systems, such as Hyperledger and Corda. This type is characterized by the presence of unknown actors in the network

So What Exactly Is A Blockchain?

Wikipedia defines it this way: "A blockchain – originally blockchain – is a growing list of records, called blocks, which are linked using cryptography. Each block contains an encrypted hash of the previous block, a timestamp, and transaction data (generally represented as a Merkle tree root hash)."

The first blockchain was conceptualized by Satoshi Nakamoto to serve as the public transaction ledger of the cryptocurrency Bitcoin. For more details on how Bitcoins are mined, you can check out this video. Basically, each block contains a set of valid transactions that were executed during a given time frame called a 'time-step'.

A new block is created once every 10 minutes and added to form an ever-growing blockchain. To verify whether or not a particular transaction is valid, all hashes corresponding to the previous transactions in the same block are examined. If these verifications are successful, then the current transaction gets included in the current block thereby forming part of the immutable record. It should be noted that all participants involved in a transaction, as well as the amount involved, are public information. Anyone with a copy of the entire blockchain can verify transactions.

The idea behind public blockchains is that anyone can join the system and use it for recording transactions or executing smart contracts (more on smart contracts later). However, because of this 'open' nature, public blockchains could potentially be used by almost anyone to store virtually any kind of data. This could include financial transactions as well as personal records such as medical histories which would result in loss of privacy. For this reason, there has been widespread interest in using blockchain technology to implement permissioned ledgers which restrict who may access specific parts of the network. By restricting general access to certain types of data, it becomes possible to implement private blockchains.

Private Blockchains, as the name suggests, allow only a pre-defined number of nodes to participate in the network. In this article, we will take a look at how one can easily create a blockchain by leveraging Google's Cloud Platform and then run some simple tasks using the resulting blockchain. For those who are new to GCP, here is a link that should help you get started.

By default, any node participating in the network has access to all transactions and smart contracts. This allows these nodes to verify transactions as well as execute smart contracts for themselves thereby forming part of the consensus mechanism. All other types of participants such as application developers or even individuals do not have direct access to transaction records or code fragments. In this article, we will take a look at how private blockchains can be created and deployed on GCP so that they can be used to store data in a secure manner.

Before we begin with the actual implementation of our private blockchain using Pub/Sub and Cloud Functions, let us first understand some more basics:

What is Cryptography?

Cryptography refers to the practice and study of techniques for secure communication in the presence of third parties. It involves both creating ciphers (code-breaking codes) as well as utilizing them to send messages confidentially and securely. A cipher is an algorithm used for performing encryption or decryption – processes by which plain text is transformed into something unreadable (ciphertext) and vice versa.

Conclusion:

Cryptography is basically a way of transforming information using an algorithm so that only those for whom it is intended can read and process it.