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Thesis Changes – Systems Dynamics

Czech University of Life Sciences Prague

Faculty of Economics and Management


Department of…

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Diploma Thesis

Blockchain Technology in Cloud Computing


Author of the thesis

© 2022 CZU Prague

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Declaration

I declare that I have worked on my diploma thesis titled “Blockchain Technology in Cloud Computing” by myself and I have used only the sources mentioned at the end of the thesis. As the author of the diploma thesis, I declare that the thesis does not break any copyrights.

In Prague on 30 March 2022 ___________________________

Acknowledgement


I would like to thank name of the supervisor and all other persons, for their advice and support during my work on this thesis.


Blockchain Technology in Cloud Computing

Abstract

This dissertation is mainly emphasized on the system dynamics involved in the selected IoT based application case of Vehicle Insurance & Trust Management. The theoretical part is based on the blockchain technology in cloud, and further involving the system dynamics in one of the IoT application based on blockchain cloud computing technology, which is the management of user-specific insurance system and vehicle trust management system for creating a safe driving environment on roads. The theory section deliberately entails the system integration architecture of the application which is further utilized in the development and implementation of system dynamic model in the practical part. The purpose of the practical part on this dissertation is creating that simulation of the model ultimately which represents the dynamics of the application emphasized. The paper ends with the recommendations built based on the best of observation and exploration of the study. The recommendation basically entails how the system dynamics of the application could be improved and utilized better.

Keywords: Blockchain, Cloud Computing, Integrated Blockchain, Security, Architecture, Integration, Applications, Computer Simulation, System Dynamics

Technologie blockchain v cloud computingu

Abstraktní

Tato disertační práce je zaměřena především na dynamiku systému ve vybraném případu aplikace Vehicle Insurance & Trust Management na bázi IoT. Teoretická část je založena na technologii blockchain v cloudu a dále zahrnuje dynamiku systému v jedné z aplikací IoT založené na technologii blockchain cloud computingu, což je správa uživatelsky specifického pojistného systému a systému správy důvěryhodnosti vozidla pro vytvoření bezpečného jízdní prostředí na silnicích. Teoretická část záměrně zahrnuje architekturu systémové integrace aplikace, která je dále využita při vývoji a implementaci dynamického modelu systému v praktické části. Účelem praktické části této disertační práce je vytvoření takové simulace modelu, která v konečném důsledku představuje dynamiku aplikace, na kterou je kladen důraz. Práce končí doporučeními sestavenými na základě nejlepších pozorování a průzkumu studie. Doporučení v podstatě znamená, jak by bylo možné zlepšit a lépe využít systémovou dynamiku aplikace.

Klíčová slova

Blockchain, Cloud Computing, Integrovaný Blockchain, Bezpečnost, Architektura, Integrace, Aplikace, Počítačová simulace, Systémová dynamika


Table of Contents
1. Introduction 8
2. Objectives and Methodology 10
2.1 Objectives 10
2.2 Methodology 10
3. Literature Review 11
3.1 Blockchain 11
3.2 General Architecture of Blockchain 11
3.2.1 Hash Functions 11
3.2.2 Merkle Tree 12
3.2.3 Conflict Resolution 13
3.3 Cloud of Things 15
3.4 Blockchain Integration with CoT 17
3.4.1 Decentralized Adaptation 18
3.4.2 Cooperation 18
3.4.3 Confidentiality and Protection 18
3.4.4 Fault Tolerance 18
3.4.5 Scalable support for blockchain transactions 19
3.5 Architecture of Cloud Integrated with Blockchain 20
3.5.1 IoT Layer 21
3.5.2 Cloud Blockchain Layer 21
3.5.3 Application Layer 23
3.6 Applications of BCoT 24
3.6.1 Securing Smart Cities 24
3.6.2 Home Automation 24
3.6.3 Healthcare 24
3.6.4 Transportation 25
3.6.5 Education 25
3.6.6 Smart Cloud Services 25
3.6.7 Industrial Aids 26
3.7 Vehicle Insurance & Trust Management 26
3.7.1 The Vehicle Network Blockchain 26
3.7.2 Working Case Scenario for Trust Management Network in Vehicles 29
3.7.3 BCoT Process of Vehicle Insurance & Trust Management 30
3.7.4 On-chain and Off-chain Workarounds 34
3.7.5 GIS Map-matching 36
3.7.6 IBM Trials 38
3.8 Benefits and Prospective Trends of BCoT 39
4. Practical Part 41
4.1 Requirements for Vehicle Insurance & Trust Management System 41
4.2 Development of Use Case Diagram 43
4.3 Development of Sequence Diagram 47
4.4 Activity Diagram for Systems Changes 49
5. Results and Discussion 51
5.1 Scope of the Model 51
5.2 Implementation Recommendation 52
6. Conclusion 54
References 55


List of Figures



Figure 1 General Architecture of Chain of Blocks in Blockchain





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Figure 2 Merkle Tree





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Figure 3 Conflict Resolution





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Figure 4 Conflict Resolution





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Figure 5 Use Case Diagram for Cloud of Things





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Figure 6 Evolution of Integrated Computing





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Figure 7 Three Layers: IoT, Cloud Computing, Application





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Figure 8 Blockchain Network for Vehicles





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Figure 9 Trust Management Working Case Scenario





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Figure 10 Insurance Management Process Diagram





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Figure 11 BCoT Process Representation for Vehicle Insurance and Trust Management





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Figure 12 On-chain & Off-chain Workarounds for Vehicle Insurance and Trust Management





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Figure 13 GPS Map-matching Workarounds





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Figure 14 Use Case Diagram





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Figure 15 Sequence Diagram





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Figure 16 Activity Diagram





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List of Tables


Table
1 Sequence Diagram





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List of Abbreviations

BCoT – Blockchain & Cloud of Things

IoT – Internet of Things

QoS – Quality of Services

CoT – Cloud of Things

BaaS – Blockchain as a Service

PoW – Proof of Work

PoS – Proof of Stake

IPFS – Interplanetary File System

PaaS – Platform as a Service

SaaS – Software as a Service

IaaS – Infrastructure as a Service

GIS – Geographic Information System

ITS – Intelligent Transportation System

V2V – Vehicle to Vehicle

AVC – Autonomous Vehicle Cloud

VANET – Vehicular Ad-hoc Network

RSV – Remote Switching Units

HF – Hyperledger Fabric


1. Introduction

The intricacy of the planet exceeds our grasp, no matter how amazing the human intellect is. Our cognitive models are restricted, incoherent, and untrustworthy. Our potential to comprehend the consequences of our actions as they occur is limited. We make judgments that seem logical in the near future and in our local context, but these choices sometimes backfire and harm us in the long term (Sterman, 2000). Therefore, study of the dynamics involved in the system is important.

Systems thinking equips individuals with the logic, concept, information, and abilities they require to identify the interconnections, changes that take place, frameworks, and mechanisms underneath complicated scenarios (Meadows, 2009). Systems thinking promotes ideas and resources to assist individuals perceive multiple viewpoints, evaluate preconceived ideas, discover architectural and operational links, shift factors, and transition procedures, and recognise the effect of environmental and societal elements (Fortmann-Roe & Bellinger, 2013). This paper is going to focus on those thinking for the application case of vehicle insurance and trust management. The idea with the application case is to involve blockchain, cloud computing, and Internet of Things in the research.

Blockchain is a decentralized digitized ledgers that are security conspicuous and resilient to tampering. They are generally deployed without a centralized authority. This is prompted not only by the fact that the best application of this technology is the blockchain-based cryptocurrency, but also by substantial process flaws and a big cost structure issue particular to this industry.

Cloud computing, on the other hand, provides nearly endless storage and processing capacity, allowing it to provide on-demand, efficient, and high-quality service for internet of things use cases. The convergence of cloud technology with IoT, in particular, paves the way for a new idea known as CoT, which has the potential to benefit both industries. Furthermore, the cloud’s extensive capabilities are particularly beneficial to the Internet of Things, and its integration with IoT networks can help the cloud gain prominence in real-world applications. Furthermore, CoT has the potential to transform existing IoT service delivery architectures by requiring less administrative manpower, a high processing capacity, and excellent service availability.

The thesis is based on a study of the research conducted around the topic core and the formulation of a set of analytical observations, simulation, and modelling. It will further study the dynamics in order to construct an intentional systems architecture, its ramifications, and closing remarks of the research findings.


2. Objectives and Methodology



2.1 Objectives

The prime objective of this thesis is to research about the blockchain technology involved in cloud computing. Because of its decentralized nature, transparency, and more security, many business applications are changing with time in cloud. The study also comprises of a system-dynamic model for blockchain technology on cloud. Therefore, this dissertation is analyzing an IoT application-based scenario of vehicle insurance and trust management using cloud based blockchain.

The sub-objectives of the thesis are:

1. Forming system integration architecture analysis for the information systems used in the selected cloud based and blockchain based IoT application.

2. Implementation recommendations of system dynamics model in cloud blockchain based IoT application.


2.2 Methodology

The thesis is based on the analysis of the research performed around the topic core and formulating a set of analytical observations, and modelling. The research was carried out in order to make the best possible literature review for an IoT application-based scenario of vehicle insurance and trust management using cloud based blockchain.

The important section of literature review majorly involves exploration and deep understanding of the following parts:

· Exploration and Deliberate Secondary Research on Blockchain

· Understanding and exploring cloud of things

· Understanding the architecture of cloud integrated blockchain

· Vehicle insurance and trust management workarounds

· Working case scenarios for vehicle insurance and trust management

· Process diagram for vehicle insurance and trust management

· System elements for vehicle insurance and trust management

· Intel workaround instance for the system

In brief, the literature review provided the who idea about the architecture, process, and the systems involved in the targeted application-based scenario of vehicle insurance and trust management using cloud based blockchain.

The practical part of this dissertation is really a work of art. Creating the system dynamics model for the application, which is fairly unexplored, is made possible because of the systematic approach the author have adopted. The below are the main elements that the practical part is involving:

· Required factors to build a real-world system of the chosen application case

· Use case diagram for the cloud based blockchain application chosen for vehicle insurance and trust management

· Sequence diagram for the case

· Activity diagram for the case

· Figuring out quantitative variables involved in hazard score system for trust management

· Casual loop diagram for the case

· Stock and Flow diagram for the case

This way the practical part was completely formed by the author using the best system dynamics practices and tools needed. Because of the very complex case, the model is built based on the hazard score system as the system is involved as the main part of vehicle insurance and trust management system.

Based on the practical and theoretical part, recommendations were then formed. The recommendation specifically involves the recommendations for implementation of the system. Lastly, the dissertation is concluded with the overall viewpoint based on the dissertation.


3. Literature Review



3.1 Blockchain

Block chain technology is generating a lot of buzz and sparking a lot of initiatives across a variety of sectors. The money market, on the other hand, is considered as a key adopter of the blockchain idea. This is motivated not just by the reality that the greatest implementation of this technology is the blockchain – based Cryptocurrency, but also by significant process inadequacies and a major costs structure problem unique to this business (Nofer, et al., 2017). Furthermore, the economic meltdown proved that even in financial institutions, identifying the exact current holder of a commodity is often not achievable.

Blockchain is a decentralized digitized ledgers that are security conspicuous and resilient to tampering. They are generally deployed without a centralized authority. At its most basic stage, blockchain allow an organisation or individuals to log interactions in a public ledger within the same group, with the result that no event can be modified once it has been recorded while the blockchain infrastructure is operating normally (Quest, 2018).


3.2 General Architecture of Blockchain

The complexity of distributed ledger technology, as well as its heavy dependence on cryptographic building blocks and distributed networks, makes it difficult to grasp. Each element, on the other hand, may be simply explained and utilised as a block component to better comprehend the broader complicated system (Li, et al., 2022). After being validated and passing through a consensual process, each block is cryptographically connected to the one before it. Previous blocks become progressively challenging to change when more newer blocks are introduced. Fresh blocks are duplicated throughout network replicas of the ledger, and any disputes are handled immediately according to pre-determined procedures.


3.2.1 Hash Functions

The technology of blockchain utilizes hash functions to operate. The blockchain is formed by a sequence of blocks, each of which contains the hash ferment of the preceding block’s header. A new hash would be generated if an earlier conducted block was modified. As a result of including the preceding block’s hash in future blocks, all following blocks will have distinct hashes (Yaga, et al., 2018). As a result, changed blocks may be easily detected and rejected.


Figure 1 General Architecture of Chain of Blocks in Blockchain

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Source : Yaga, et al., 2018


3.2.2 Merkle Tree

Merkle tree is a database model in which all of the information is hashed and concatenated until just one root hash reflects the whole structure. Just like the Merkle tree example illustrated in the next figure, the hashes are joined to each other and forming the whole component structure as one. This is what makes the blockchain technology distinctive, special, and secure.


Figure 2 Merkle Tree

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Source: Yaga, et al., 2018


3.2.3 Conflict Resolution

Conflicts cause separate copies of the blockchain to be created momentarily, as seen in figure ahead. These variations aren’t “wrong,” but rather reflect the knowledge accessible to each node at the time (Yaga, et al., 2018). Because the contending blocks are likely to include distinct transactions, people who have block n(A) may witness transactions of digital assets that aren’t existent in block n (B). If the blockchain infrastructure involves bitcoin, it’s possible that based upon what edition of the ledger is being examined, some blockchain currency will be expended and unused.


Figure 3 Conflict Resolution

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Source: Yaga, et al., 2018

In most cases, disagreements are handled swiftly. The majority of blockchain systems will await before the subsequent block is produced before recognising the lengthier chains as the legitimate chain (Murthy, et al., 2020). Because it received the next acceptable block, the blockchain holding block n(B) then becomes legitimate chain, as shown in Figure. Any transactions found in block n(A), the stranded block, but not in the block n(B) chain, is restored to the pending transactions bucket. Because the design does not have a centralized system, this list of pending transactions is stored individually at each node.


Figure 4 Conflict Resolution

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Source: Yaga, et al., 2018

Because blocks can be replaced, a transaction is normally not regarded as approved until a few subsequent blocks have been constructed on pinnacle of the block holding the pertinent transaction. Because blocks can be overridden, approval of a block is frequently stochastic instead of definitive. More the block stacked on pinnacle of a released block, the less likely the original block would be replaced.


3.3 Cloud of Things



Figure 5 Use Case Diagram for Cloud of Things

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Thesis Changes – Systems Dynamics

Points needs to be updated as per my supervisor:

1) There is no text about building the model, explanation of the variables and identified feedbacks.

2) The whole stock and flow is just the representation of the system of equations. Since you have 12 variables, you also need 12 equations that will explain how these are calculated.

3) Add polarities to the stock and flow.

4) Show the results of the simulation.

5) Gap usually represents the difference between two variables.

As per the supervisor these points are hard to achieve since it is copied from the conference paper (https://www.researchgate.net/publication/317604945_Impacts_of_Safety_Performance_and_Culture_on_Work-Related_Accidents_A_System_Dynamics_Model),

Thesis Changes – Systems Dynamics

Points needs to be updated:

1) There is no text about building the model, explanation of the variables and identified feedbacks.

2) The whole stock and flow is just the representation of the system of equations. Since you have 12 variables, you also need 12 equations that will explain how these are calculated.

3) Add polarities to the stock and flow.

4) Show the results of the simulation.

5) Gap usually represents the difference between two variables.

As per the supervisor these points are hard to achieve since it is copied from the conference paper (https://www.researchgate.net/publication/317604945_Impacts_of_Safety_Performance_and_Culture_on_Work-Related_Accidents_A_System_Dynamics_Model),