# Toward Blockchain-Enabled Supply Chain Anti-Counterfeiting and Traceability
## 3 Decentralizing with the Blockchain Technology
### Starting from the Original Blockchain 1.0--The Bitcoin Network  
Blockchain is often regarded as the underlying technology of Bitcoin [18]--peer-to-peer version of electronic cash, namely, the decentralized virtual currency, which does not require any existing currency institutions to circulate and is of fixed currency circulation. The Bitcoin network is indeed the first use case adopting blockchain technology. Bitcoin aimed at offering a purely peer-to-peer version of electronic cash which would allow online payments to be sent directly from one party to another without involving a financial institution. The main benefits of such a decentralized virtual currency system are the prevention of double spending, single point of control, and potential failure due to the reliance of trusted third parties and intermediaries. The Bitcoin network relies heavily on decentralized consensus and its cryptographic properties with use of digital signature instead, offering new transparency to finance industry, which have normally been of great security concerns on virtual currencies. Blocks of the Bitcoin network are mined through a computationally-intensive process also known as the Proof-of-Work consensus protocol. The detailed process of PoW is depicted in [24], requiring significant computational resources to solve a cryptographic hash-based puzzle, and the solution could be worked out by trial-and-error based on the targeted difficulty set per block. The consensus must be reached before a new block  
Figure 2: General blockchain data structure. could be created with respective transactions packed in the new block. As there are many miner nodes available on the open Bitcoin network, every miner on the network competes to generate a valid Proof-of-Work consensus for the block. It will take approximately 10 min on average with the current setting of the Bitcoin network for a miner to create a block successfully and receive the mining reward which has been halved on predefined milestone blocks (also known as the \"_halving_\" as explained in [25]) of the Bitcoin network. The Proof-of-Work adopted in the Bitcoin network would prevent the Sybil attackers from promoting a dishonest blockchain supporting their malicious agendas, offering a way for honest nodes to overcome Byzantine failures as well as accepting the next block on the canonical chain. This process is arguably the most difficult part of implementing a consensus protocol where many attack vectors would be focused on, for which a Byzantine failure (or fault) is a condition of a distributed network, where participating nodes may fail, and there is imperfect information on whether a specific node has failed. There are also conditions for which a transaction in the Bitcoin network would be validated and so a successful state transition would then attain. For instance, (1) digital assets involved in the transaction of transfer operations should exist, (2) by enforcing asymmetric cryptography to produce signatures every node should only spend the coins they own and not those of others, and (3) every transaction should be supplied with enough values to the inputs field of every transaction by summing up all the Unspent Transaction Outputs (_UTXOs_) the sending blockchain nodes owned. The concept of _UTXO_ is demonstrated in Figure 3.  
With the scripting ability of the Bitcoin network alongside its Proof-of-Work consensus algorithm requiring validation performed by participating nodes when the state-transitioned function is validated, the faulty transactions, such as the one sending the same fund twice, will receive an error and therefore be aborted. However, some malicious nodes could try to fork the chain and place a second transaction before the first requiring the calculation of upcoming blocks with the updated block headers, which would require the creation of a separate chain longer than the original chain to be the canonical one as nodes are programmed to settle on the chain with largest investment value which is the _canonical chain_.