Introduction to blockchain Session @ Tie Pune

Editor's Notes

• #2: Welcome & good evening for today’s webinar on Introduction to Blockchain. My name is Uday Kothari, I am serial entrepreneur & in the IT industry for more than 30 years.
• #3: In 2008 financial crisis in US affected many people who lost their bank deposits, homes and jobs. People lost their trust in banking systems. Satoshi Nakamoto published white paper on Peer-to-Peer Electronic Cash system which revolutionized the way people transfer money. His concept paper was implemented as Bitcoin in 2009. Core of this concept was Blockchain. Vitalink Buretin came out with enhanced solution and introduced Smart Contract concept in Ethereum.
• #4: So let us look at what Blockchain is:
• #6: Let us summarize key concepts in Blockchain Distributed Shared Ledger Cryptography Concensus Smart Contracts
• #7: Second most important technique that is used in Blockchain is Cryptography. Hashing is one concept that is used in Blockchain, Hashing is Cryptography function that produces unique fixed length hexadecimal number irrespective of length of input data. However even if small change like adding “period” at the end of the sentence can produce totally different Hash value. Therefore it makes it impossible for anyone to get input value from hash value. It is like getting “Orange Back” from Orange Juice
• #9: Let us first understand what is Ledger? Ledger is like Bank Passbook where all deposits and withdrawals are recorded or accounting books that records transactions such as purchase and sales, it cane simple notebook where person records entries on transactions or notes. We see many such examples in our daily life, Land Registry which maintains ownership of Land, Colleges maintains grades of students. In other words, there is Central Authority which maintains the records and people trust it. Typically each party is responsible for maintaining their own ledger or book of accounts. When everyone is honest then there is no problem but what happens when one party records transaction differently than other? Or Govt employee who has access to Land Registry makes unauthorized & fraudulent changes and original owner looses his/her ownership of property. We hear such news all the time. Major reason for such incidents is Centralized Database. Now let’s imagine that 1000s of exact copies are maintained and constantly synced no single person or entity having complete control to make any changes to ledger, it becomes very difficult to any unauthorized changes.
• #10: Majority of Nodes agree on validity of transaction Avoids Double-Spend problem, To understand problem of double spend, in typical cash based system, once I give money from my Wallet to someone else, it is gone and I can’t give same money to another person, where before Bitcoin, it was seen that it certain situation, currency from one digital wallet can be used more than once. Different Conensus algorithms are used in different blockchains, e.g. Bitcoin uses Proof-of-work where as private blockchains such as Hyperledge Fabric uses Kafka algorithm where as Hyperledger Sawtooth used PoET (Proof of Elapse Time). Ethereum currently uses Proof-of-work but it will change it to Proof-of-Stake.
• #11: A smart contract is a computer protocol intended to digitally facilitate, verify, or enforce the negotiation or performance of a contract. Smart contracts allow the performance of credible transactions without third parties. These transactions are trackable and irreversible. It can have business logic, conditions under which specific actions can be performed. Escrow services: Holding payment