Building Blockchain Projects

Title Page

Building Blockchain Projects

Develop real-time practical DApps using Ethereum and JavaScript

Narayan Prusty

BIRMINGHAM - MUMBAI

Copyright

Building Blockchain Projects

Copyright © 2017 Packt Publishing

All rights reserved. No part of this book may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, without the prior written permission of the publisher, except in the case of brief quotations embedded in critical articles or reviews.

Every effort has been made in the preparation of this book to ensure the accuracy of the information presented. However, the information contained in this book is sold without warranty, either express or implied. Neither the author, nor Packt Publishing, and its dealers and distributors will be held liable for any damages caused or alleged to be caused directly or indirectly by this book.

Packt Publishing has endeavored to provide trademark information about all of the companies and products mentioned in this book by the appropriate use of capitals. However, Packt Publishing cannot guarantee the accuracy of this information.

First published: April 2017

Production reference: 1240417

Published by Packt Publishing Ltd.

Livery Place

35 Livery Street

Birmingham 

B3 2PB, UK.

ISBN 978-1-78712-214-7

www.packtpub.com

Credits

About the Author

Narayan Prusty is a full-stack developer, with five years of experience in the field. He specializes in Blockchain and JavaScript. His commitment has led him to build scalable products for startups, the government, and enterprises across India, Singapore, USA, and UAE. 

At present, Ethereum, Bitcoin, Hyperledger, IPFS, Ripple, and so on are some of the things he uses on a regular basis to build decentralized applications. Currently, he is a full-time Blockchain SME (Subject-Matter Expert) at Emirates National Bank of Dubai.  

He has already written two books on JavaScript titled Learning ECMAScript 6 and Modern JavaScript Applications. Both these books were reviewed and published by Packt. 

He starts working on something immediately if he feels it’s exciting and solves real work problems. He built an MP3 search engine at the age of 18, and since then, he has built various other applications, which are used by people around the globe. His ability to to build scalable applications from top to bottom is what makes him special.

Currently, he is on a mission to make things easier, faster, and cheaper using the blockchain technology. Also, he is looking at possibilities to prevent corruptions, fraud, and to bring transparency to the world using blockchain technology.

You can learn more from him from his blog http://qnimate.com  and you can reach him out at LinkedIn https://www.linkedin.com/in/narayanprusty/.

About the Reviewers

Imran Bashir has an M.Sc. degree in Information Security from Royal Holloway, University of London, and has a background in software development, solution architecture, infrastructure management, and IT service management. He is also a member of the Institute of Electrical and Electronics Engineers (IEEE) and the British Computer Society (BCS). Imran has sixteen years of experience in public and financial sector. He had worked on large-scale IT projects for the public sector before moving to the financial services industry. Since then, he worked in various technical roles for different financial companies in Europe’s financial capital, London. He is currently working for an investment bank in London as Vice President in the technology department.

Daniel Kraft has studied mathematics and physics and holds a PhD degree in applied mathematics from the University of Graz in Austria.  He has been involved in development with cryptocurrencies since 2013, has been the lead developer and chief scientist for both Namecoin and Huntercoin since 2014, and has published two research papers about cryptocurrency in peer-reviewed journals. He works as a software engineer and is a cofounder of Crypto Realities Ltd, a start-up that works on building decentralized multiplayer game worlds with blockchain technology.

Gaurang Torvekar has a master's degree in Information Systems from Singapore Management University. He is the cofounder and CTO of Attores, a Smart Contracts as a Service company, based in Singapore. He has extensive experience in Ethereum and Hyperledger application development. He has been a speaker at several blockchain conferences, conducted many hands on blockchain courses in Polytechnics in Singapore, and is also a Blockchain mentor at Angelhack.

www.PacktPub.com

For support files and downloads related to your book, please visit www.PacktPub.com.

Did you know that Packt offers eBook versions of every book published, with PDF and ePub files available? You can upgrade to the eBook version at www.PacktPub.com and as a print book customer, you are entitled to a discount on the eBook copy. Get in touch with us at service@packtpub.com for more details.

At www.PacktPub.com, you can also read a collection of free technical articles, sign up for a range of free newsletters and receive exclusive discounts and offers on Packt books and eBooks.

https://www.packtpub.com/mapt

Get the most in-demand software skills with Mapt. Mapt gives you full access to all Packt books and video courses, as well as industry-leading tools to help you plan your personal development and advance your career.

Why subscribe?

Fully searchable across every book published by Packt

Copy and paste, print, and bookmark content

On demand and accessible via a web browser

Customer Feedback

Thanks for purchasing this Packt book. At Packt, quality is at the heart of our editorial process. To help us improve, please leave us an honest review on this book's Amazon page at https://www.amazon.com/dp/178712214X.

If you'd like to join our team of regular reviewers, you can e-mail us at customerreviews@packtpub.com. We award our regular reviewers with free eBooks and videos in exchange for their valuable feedback. Help us be relentless in improving our products!

Table of Contents

Preface

What this book covers

What you need for this book

Who this book is for

Conventions

Reader feedback

Customer support

Downloading the example code

Downloading the color images of this book

Errata

Piracy

Questions

Understanding Decentralized Applications

What is a DApp?

Advantages of decentralized applications

Disadvantages of decentralized applications

Decentralized autonomous organization

User identity in DApps

User accounts in DApps

Accessing the centralized apps

Internal currency in DApps

Disadvantages of internal currency in DApps

What are permissioned DApps?

Popular DApps

Bitcoin

What is a ledger?

What is blockchain?

Is Bitcoin legal?

Why would someone use Bitcoin?

Ethereum

The Hyperledger project

IPFS

How does it work?

Filecoin

Namecoin

.bit domains

Dash

Decentralized governance and budgeting

Decentralized service

BigChainDB

OpenBazaar

Ripple

Summary

Understanding How Ethereum Works

Overview of Ethereum

Ethereum accounts

Transactions

Consensus

Timestamp

Nonce

Block time

Forking

Genesis block

Ether denominations

Ethereum virtual machine

Gas

Peer discovery

Whisper and Swarm

Geth

Installing geth

OS X

Ubuntu

Windows

JSON-RPC and JavaScript console

Sub-commands and options

Connecting to the mainnet network

Creating a private network

Creating accounts

Mining

Fast synchronization

Ethereum Wallet

Mist

Weaknesses

Sybil attack

51% attack

Serenity

Payment and state channels

Proof-of-stake and casper

Sharding

Summary

Writing Smart Contracts

Solidity source files

The structure of a smart contract

Data location

What are the different data types?

Arrays

Strings

Structs

Enums

Mappings

The delete operator

Conversion between elementary types

Using var

Control structures

Creating contracts using the new operator

Exceptions

External function calls

Features of contracts

Visibility

Function modifiers

The fallback function

Inheritance

The super keyword

Abstract contracts

Libraries

Using for

Returning multiple values

Importing other Solidity source files

Globally available variables

Block and transaction properties

Address type related

Contract related

Ether units

Proof of existence, integrity, and ownership contract

Compiling and deploying contracts

Summary

Getting Started with web3.js

Introduction to web3.js

Importing web3.js

Connecting to nodes

The API structure

BigNumber.js

Unit conversion

Retrieving gas price, balance, and transaction details

Sending ether

Working with contracts

Retrieving and listening to contract events

Building a client for an ownership contract

The project structure

Building the backend

Building the frontend

Testing the client

Summary

Building a Wallet Service

Difference between online and offline wallets

hooked-web3-provider and ethereumjs-tx libraries

What is a hierarchical deterministic wallet?

Introduction to key derivation functions

Introduction to LightWallet

HD derivation path

Building a wallet service

Prerequisites

Project structure

Building the backend

Building the frontend

Testing

Summary

Building a Smart Contract Deployment Platform

Calculating a transaction's nonce

Introducing solcjs

Installing solcjs

solcjs APIs

Using a different compiler version

Linking libraries

Updating the ABI

Building a contract deployment platform

The project structure

Building the backend

Building the frontend

Testing

Summary

Building a Betting App

Introduction to Oraclize

How does it work?

Data sources

Proof of authenticity

Pricing

Getting started with the Oraclize API

Setting the proof type and storage location

Sending queries

Scheduling queries

Custom gas

Callback functions

Parsing helpers

Getting the query price

Encrypting queries

Decrypting the data source

Oraclize web IDE

Working with strings

Building the betting contract

Building a client for the betting contract

Projecting the structure

Building the backend

Building the frontend

Testing the client

Summary

Building Enterprise Level Smart Contracts

Exploring ethereumjs-testrpc

Installation and usage

The testrpc command-line application

Using ethereumjs-testrpc as a web3 provider or as an HTTP server

Available RPC methods

What are event topics?

Getting started with truffle-contract

Installing and importing truffle-contract

Setting up a testing environment

The truffle-contract API

The contract abstraction API

Creating contract instances

The contract instance API

Introduction to truffle

Installing truffle

Initializing truffle

Compiling contracts

Configuration files

Deploying contracts

Migration files

Writing migrations

Unit testing contracts

Writing tests in JavaScript

Writing tests in Solidity

How to send ether to a test contract

Running tests

Package management

Package management via NPM

Package management via EthPM

Using contracts of packages within your contracts

Using artifacts of packages within your JavaScript code

Accessing a package's contracts deployed addresses in Solidity

Using truffle's console

Running external scripts in truffle's context

Truffle's build pipeline

Running an external command

Running a custom function

Truffle's default builder

Building a client

Truffle's server

Summary

Building a Consortium Blockchain

What is a consortium blockchain?

What is Proof-of-Authority consensus?

Introduction to parity

Understanding how Aura works

Getting parity running

Installing rust

Linux

OS X

Windows

Downloading, installing and running parity

Creating a private network

Creating accounts

Creating a specification file

Launching nodes

Connecting nodes

Permissioning and privacy

Summary

Preface

Blockchain is a decentralized ledger that maintains a continuously growing list of data records secured from tampering and revision. Every user is allowed to connect to the network, send new transactions to it, verify transactions, and create new blocks.

This book will teach you what Blockchain is, how it maintains data integrity, and how to create real-world Blockchain projects using Ethereum. With interesting real-world projects, you will know learn how to write smart contracts which run exactly as programmed without any chance of fraud, censorship or third-party interference, and build end-to-end applications for Blockchain. You will learn concepts such as cryptography in cryptocurrencies, ether security, mining, smart contracts, and solidity.

The blockchain is the main technical innovation of bitcoin, where it serves as the public ledger for bitcoin transactions.

What this book covers

Chapter 1, Understanding Decentralized Applications, will explain what DApps are and provide an an overview of how they work.

Chapter 2, Understanding How Ethereum Works, explains how Ethereum works.

Chapter 3, Writing Smart Contracts, shows how to write smart contracts and use geth's interactive console to deploy and broadcast transactions using web3.js.  

Chapter 4, Getting Started with web3.js, introduces web3js and how to import, connect to geth, and explains use it in Node.js or client-side JavaScript.

Chapter 5, Building a Wallet Service, explains how to build a wallet service that users can create and manage Ethereum Wallets easily, even offline. We will specifically use the LightWallet library to achieve this.

Chapter 6, Building a Smart Contract Deployment Platform, shows how to compile smart contracts using web3.js and deploy it using web3.js and EthereumJS.

Chapter 7, Building a Betting App, explains how to use Oraclize to make HTTP requests from Ethereum smart contracts to access data from World Wide Web. We will also learn how to access files stored in IPFS, use the strings library to work with strings, and more. 

Chapter 8, Building Enterprise Level Smart Contracts, explains how to use Truffle, which makes it easy to build enterprise-level DApps. We will learn about Truffle by building an alt-coin.

Chapter 9, Building a Consortium Blockchain, we will discuss consortium blockchain.

What you need for this book

You require Windows 7 SP1+, 8, 10 or Mac OS X 10.8+.

Who this book is for

This book is for JavaScript developers who now want to create tamper-proof data (and transaction) applications using Blockchain and Ethereum. Those who are interested in cryptocurrencies and the logic and database empowering it will find this book extremely useful.

Conventions

In this book, you will find a number of text styles that distinguish between different kinds of information. Here are some examples of these styles and an explanation of their meaning.

Code words in text, database table names, folder names, filenames, file extensions, pathnames, dummy URLs, user input, and Twitter handles are shown as follows: Then, run the app using the node app.js command inside the Final directory.

A block of code is set as follows:

Any command-line input or output is written as follows:

New terms and important words are shown in bold. Words that you see on the screen, for example, in menus or dialog boxes, appear in the text like this: Now select the same file again and click on the Get Info button.

Warnings or important notes appear in a box like this.

Tips and tricks appear like this.

Reader feedback

Feedback from our readers is always welcome. Let us know what you think about this book-what you liked or disliked. Reader feedback is important for us as it helps us develop titles that you will really get the most out of.

To send us general feedback, simply e-mail feedback@packtpub.com, and mention the book's title in the subject of your message.

If there is a topic that you have expertise in and you are interested in either writing or contributing to a book, see our author guide at www.packtpub.com/authors.

Customer support

Now that you are the proud owner of a Packt book, we have a number of things to help you to get the most from your purchase.

Downloading the example code

You can download the example code files for this book from your account at http://www.packtpub.com. If you purchased this book elsewhere, you can visit http://www.packtpub.com/support and register to have the files e-mailed directly to you.

You can download the code files by following these steps:

Log in or register to our website using your e-mail address and password.

Hover the mouse pointer on the SUPPORT tab at the top.

Click on Code Downloads & Errata.

Enter the name of the book in the Search box.

Select the book for which you're looking to download the code files.

Choose from the drop-down menu where you purchased this book from.

Click on Code Download.

Once the file is downloaded, please make sure that you unzip or extract the folder using the latest version of:

WinRAR / 7-Zip for Windows

Zipeg / iZip / UnRarX for Mac

7-Zip / PeaZip for Linux

The code bundle for the book is also hosted on GitHub at https://github.com/PacktPublishing/Building-Blockchain-Projects. We also have other code bundles from our rich catalog of books and videos available at https://github.com/PacktPublishing/. Check them out!

Downloading the color images of this book

We also provide you with a PDF file that has color images of the screenshots/diagrams used in this book. The color images will help you better understand the changes in the output. You can download this file from https://www.packtpub.com/sites/default/files/downloads/BuildingBlockchainProjects_ColorImages.pdf.

Errata

Although we have taken every care to ensure the accuracy of our content, mistakes do happen. If you find a mistake in one of our books-maybe a mistake in the text or the code-we would be grateful if you could report this to us. By doing so, you can save other readers from frustration and help us improve subsequent versions of this book. If you find any errata, please report them by visiting http://www.packtpub.com/submit-errata, selecting your book, clicking on the Errata Submission Form link, and entering the details of your errata. Once your errata are verified, your submission will be accepted and the errata will be uploaded to our website or added to any list of existing errata under the Errata section of that title.

To view the previously submitted errata, go to https://www.packtpub.com/books/content/support and enter the name of the book in the search field. The required information will appear under the Errata section.

Piracy

Piracy of copyrighted material on the Internet is an ongoing problem across all media. At Packt, we take the protection of our copyright and licenses very seriously. If you come across any illegal copies of our works in any form on the Internet, please provide us with the location address or website name immediately so that we can pursue a remedy.

Please contact us at copyright@packtpub.com with a link to the suspected pirated material.

We appreciate your help in protecting our authors and our ability to bring you valuable content.

Questions

If you have a problem with any aspect of this