Page 20 - U4SSC Blockchain for smart sustainable cities

(2) Time-stamped transactions
All the transactions in a blockchain are time stamped. Therefore, it is possible to track and verify
the information, which means that the transactions related to payment, transfer of ownership, or
contract are linked publicly to a specific time and date. It is not possible to modify the time stamp, and
this feature is relevant for the identification of when a transaction was initiated, and by whom. This
increases transparency and security. It also enables the validation of transactions and the update of
records in a synchronized and decentralized way. 21

It is not possible to delete or edit data in a blockchain, however, it is possible to add a new transaction
that is time-stamped in the network. This maintains the history available for everybody in the system
and allows for the information to be tracked.

(3) Multiple and distributed nodes

The blockchain is a database operating in a distributed network of multiple nodes or computers. There
is no central point of failure in the system, which is why it is difficult to attack it. To target the majority of
nodes simultaneously or break down the network is difficult. Potential collisions or attacks from a group
of participants controlling the majority of computational resources might not be practical or feasible.

There are some concerns about centralization in private and permissioned blockchain such as
Hyperledger because in this type of blockchain, it is possible to allow access and permissions just to a
group of participants. Under such circumstances, it can be considered a centralized or semi-centralized
model, at best. 22

(4) Smart contracts
Smart contracts are programmes executed automatically and capable of carrying out the terms of the
agreement between parties without the need for human intervention. Smart contracts can enforce
contracts under instructions and enable two or more parties to perform transactions without the need
for intermediaries. 23

Smart contracts became popular with Ethereum, and although it has yet to reach a well-accepted level
of maturity, it has been offered by other blockchain platforms, such as Hyperledger’s umbrella project.
Their implementation can be different in each platform. The assumption regarding smart contracts
is that contractual control of transactions between parties can be confirmed through the blockchain
instead of through a central arbitrator or authority. In such situations, it is possible to define the terms
and implications of an agreement with automatic asset releases when fulfilling services in a certain
manner or incurring penalties if not fulfilled. Although it is possible from the technical perspective, and
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from the legal perspective, smart contracts do not necessarily have anything to do with a legal contract. 25

These features and associated benefits (of consensus mechanisms, time-stamped transactions, multiple
and distributed nodes) presented in this sub-section are the main advantages accrued through the use
of blockchain technology (in comparison with traditional databases).

10 U4SSC: Blockchain for smart sustainable cities