Foundational Concepts of Blockchains

Abstract

Blockchain technology rests upon distributed-ledger principles, offering a decentralised, tamper-evident method of recording transactions across networks. The discussion begins with an analysis of network topologies –centralised, decentralised, distributed, and hybrid – each with distinct implications for resilience, control, and scalability. Distributed-Ledger Technology (DLT) is defined as a class of decentralised systems enabling peer-to-peer consensus without central authority, with blockchain as a linear, cryptographically chained variant . Key architectural elements are examined, including node types, data structures, and consensus mechanisms such as Proof-of-Work, Proof-of-Stake, and Byzantine Fault Tolerance, each with distinct trade-offs between security, performance, and energy efficiency. The emergence of smart contracts and tokenisation is presented as transformative: enabling programmable, trust-minimised interactions and asset digitisation, while simultaneously introducing regulatory, legal, and technical challenges . The chapter critically distinguishes blockchain from broader DLTs, highlighting alternative models such as DAG-based systems (e.g., IOTA, Hashgraph) and permissioned frameworks (e.g., Corda). Foundational applications across financial services, supply chains, and digital identity are introduced, setting the stage for industry-specific use cases. Finally, implications for the built environment – including the “Golden Thread” of building lifecycle information – are briefly explored, identifying the potential of blockchain to enhance data integrity, accountability, and compliance in complex asset ecosystems .