Introduction to Blockchains
Download as ODP, PDF0 likes175 views
The document discusses cryptocurrency, blockchain, distributed ledgers, smart contracts, consensus algorithms, and blockchain technologies and use cases. It provides definitions and examples of cryptocurrencies like Bitcoin and Ethereum. It explains that blockchains use consensus algorithms like proof-of-work to validate transactions and smart contracts to enable ledger functions. Common blockchain technologies discussed include Hyperledger, Ethereum, and Quorum. Potential use cases mentioned are supply chains, online voting, and land registries.
Introduction to Blockchains
- 1. Prabhat Kashyap Software Consultant Knoldus Software LLP Introduction to
- 2. Agenda ● Cryptocurrency ● Blockchain ● Distributed Ledger ● Smart Contracts ● Consensus Algorithm ● Blockchain Technologies ● Use Cases
- 3. What is cryptocurrency? ● Crypt-o-currency is a form of digital money that is designed to be secure and, in many cases, anonymous.
- 4. What is cryptocurrency? ● Crypt-o-currency is a form of digital money that is designed to be secure and, in many cases, anonymous. ● The first cryptocurrency was bitcoin, which was created in 2009 and is still the best known.
- 5. What is cryptocurrency? ● Crypt-o-currency is a form of digital money that is designed to be secure and, in many cases, anonymous. ● The first cryptocurrency was bitcoin, which was created in 2009 and is still the best known. ● There has been a proliferation of cryptocurrencies in the past decade and there are now more than 900 available on the internet.
- 6. Most common cryptocurrencies? ● Bitcoin: Bitcoin was the first and is the most commonly traded cryptocurrency to date. The currency was developed by Satoshi Nakamoto in 2009, a mysterious figure who developed its blockchain. It has a market capitalisation of around $45 billion as of July 2017.
- 7. Most common cryptocurrencies? ● Bitcoin: Bitcoin was the first and is the most commonly traded cryptocurrency to date. The currency was developed by Satoshi Nakamoto in 2009, a mysterious figure who developed its blockchain. It has a market capitalisation of around $45 billion as of July 2017. ● Ethereum: Developed in 2015, ethereum is the currency token used in the ethereum blockchain, the second most popular and valuable cryptocurrency. Ethereum has a market capitalisation of around $18bn as of July 2017. However, ethereum has had a turbulent journey. After a major hack in 2016 it split into two currencies, while its value has in recent months reached as high as $400 but crashed briefly to as low as 10 cents.
- 8. Most common cryptocurrencies? ● Bitcoin: Bitcoin was the first and is the most commonly traded cryptocurrency to date. The currency was developed by Satoshi Nakamoto in 2009, a mysterious figure who developed its blockchain. It has a market capitalisation of around $45 billion as of July 2017. ● Ethereum: Developed in 2015, ethereum is the currency token used in the ethereum blockchain, the second most popular and valuable cryptocurrency. Ethereum has a market capitalisation of around $18bn as of July 2017. However, ethereum has had a turbulent journey. After a major hack in 2016 it split into two currencies, while its value has in recent months reached as high as $400 but crashed briefly to as low as 10 cents. ● Ripple: Ripple is another distributed ledger system that was founded in 2012. Ripple can be used to track more kinds of transactions, not just of the cryptocurrency. It has been used by banks including Santander and UBS and has a market capitalisation of around $6.3 billion.
- 9. Most common cryptocurrencies? ● Bitcoin: Bitcoin was the first and is the most commonly traded cryptocurrency to date. The currency was developed by Satoshi Nakamoto in 2009, a mysterious figure who developed its blockchain. It has a market capitalisation of around $45 billion as of July 2017. ● Ethereum: Developed in 2015, ethereum is the currency token used in the ethereum blockchain, the second most popular and valuable cryptocurrency. Ethereum has a market capitalisation of around $18bn as of July 2017. However, ethereum has had a turbulent journey. After a major hack in 2016 it split into two currencies, while its value has in recent months reached as high as $400 but crashed briefly to as low as 10 cents. ● Ripple: Ripple is another distributed ledger system that was founded in 2012. Ripple can be used to track more kinds of transactions, not just of the cryptocurrency. It has been used by banks including Santander and UBS and has a market capitalisation of around $6.3 billion. ● Litecoin: This currency is most similar in form to bitcoin, but has moved more quickly to develop new innovations, including faster payments and processes to allow many more transactions. The total value of all Litecoin is around $2.1 billion.
- 11. What is a Blockchain? ● “The blockchain is an incorruptible digital ledger of economic transactions that can be programmed to record not just financial transactions but virtually everything of value.” ● Don & Alex Tapscott, authors Blockchain Revolution
- 12. What is a Blockchain? ● “The blockchain is an incorruptible digital ledger of economic transactions that can be programmed to record not just financial transactions but virtually everything of value.” ● Don & Alex Tapscott, authors Blockchain Revolution ● A blockchain is a shared ledger where transactions are permanently recorded by appending blocks. The blockchain serves as a historical record of all transactions that ever occurred, from the genesis block to the latest block, hence the name blockchain.
- 14. A Distributed Ledger ● At the heart of a blockchain network is a distributed ledger that records all the transactions that take place on the network.
- 15. A Distributed Ledger ● At the heart of a blockchain network is a distributed ledger that records all the transactions that take place on the network. ● A blockchain ledger is often described as decentralized because it is replicated across many network participants, each of whom collaborate in its maintenance.
- 16. Smart Contracts ● To support the consistent update of information – and to enable a whole host of ledger functions (transacting, querying, etc) – a blockchain network uses smart contracts to provide controlled access to the ledger.
- 17. Smart Contracts ● To support the consistent update of information – and to enable a whole host of ledger functions (transacting, querying, etc) – a blockchain network uses smart contracts to provide controlled access to the ledger. ● Smart contracts help you exchange money, property, shares, or anything of value in a transparent, conflict-free way while avoiding the services of a middleman.
- 18. Smart Contracts ● To support the consistent update of information – and to enable a whole host of ledger functions (transacting, querying, etc) – a blockchain network uses smart contracts to provide controlled access to the ledger. ● Smart contracts help you exchange money, property, shares, or anything of value in a transparent, conflict-free way while avoiding the services of a middleman. ● At core, these automated contracts work like any other computer program’s if-then statements. They just happen to be doing it in a way that interacts with real-world assets.
- 20. Consensus Algorithm ● When we talk about the blockchain, the first thing that came up in our mind is the security and the security because of the blockchain consensus algorithm.
- 21. Consensus Algorithm ● When we talk about the blockchain, the first thing that came up in our mind is the security and the security because of the blockchain consensus algorithm. ● The ledger transactions synchronized across the network.
- 22. Consensus Algorithm ● When we talk about the blockchain, the first thing that came up in our mind is the security and the security because of the blockchain consensus algorithm. ● The ledger transactions synchronized across the network. ● In blockchains, participants in network verifies the transaction.
- 23. Consensus Algorithm Imagine that several divisions of the Byzantine army are camped outside an enemy city, each division commanded by its own general. The generals can communicate with one another only by messenger. After observing the enemy, they must decide upon a common plan of action. However, some of the generals may be traitors, trying to prevent the loyal generals from reaching agreement. The generals must decide on when to attack the city, but they need a strong majority of their army to attack at the same time. The generals must have an algorithm to guarantee that (a) all loyal generals decide upon the same plan of action, and (b) a small number of traitors cannot cause the loyal generals to adopt a bad plan. The loyal generals will all do what the algorithm says they should, but the traitors may do anything they wish. The algorithm must guarantee condition (a) regardless of what the traitors do. The loyal generals should not only reach agreement, but should agree upon a reasonable plan.
- 24. Consensus Algorithm ● PBFT - Practical Byzantine Fault Tolerance Algorithm
- 25. Consensus Algorithm ● PBFT - Practical Byzantine Fault Tolerance Algorithm ● PoW – Proof of Work
- 26. PoW ● Let’s say we are going to work on a string “blockchain” and our target is to find a variation of the variation of it that SHA-256 hashes to a value beginning with ‘0000’. ● We vary the string by adding an integer value to the end called a nonce and incrementing it each time.
- 27. PoW Example blockchain0 -- bd4824d8ee63fc82392a6441444166d22ed84eaa6dab11d4923075975acab938 blockchain1 -- db0b9c1cb5e9c680dfff7482f1a8efad0e786f41b6b89a758fb26d9e223e0a10 blockchain2 -- 8f0532cd22055fb7599aa48f38501dcd46e61712ab49a02f840f5545830e9260 blockchain3 -- eb61c3724d6da33605084d2d232bba0563cb82f4ad82c101b42f23c2e86277ef blockchain4 -- 1af101f70897bf501779b7b2e413ae7144aba5b97e24890c71ba2a1d9c518d20 . . . blockchain1038 -- 2eee57eaae45cc6a47c341facfe6cd1368e632cc065df9cb2c37fbe65478e29e blockchain1039 -- 305c971ed5272a33940a09b72b2c101fdf51f36b96c77c0732ad2ed75319592d blockchain1040 -- 3f1f04f2146bce225366fbe65da38a5acbde429777b2801e3ba0e6ae3d5c197a blockchain1041 -- 00007f73e777e83b01302b5fd5bc9905960c6398c7b24d0f2cc6a3e0c5cd3522
- 28. Consensus Algorithm ● PBFT - Practical Byzantine Fault Tolerance Algorithm ● PoW – Proof of Work ● PoS – Proof of Stake
- 30. Blockchain Technologies ● Hyperledger ● Ethereum
- 31. Blockchain Technologies ● Hyperledger ● Ethereum ● Quorum
- 32. Use Case Blockchains ● Supply Chains ● Online Voting ● Land Registries ● Cloud Storage ● and many more ...
- 33. References ● Bitcoin ● Blockgeeks ● PDForrest and Ordina Jworks ● Coindesk ● Wikipedia
Editor's Notes
- #25: In 1999, Miguel Castro and Barbara Liskov introduced the “Practical Byzantine Fault Tolerance” (PBFT) algorithm, which provides high-performance Byzantine state machine replication, processing thousands of requests per second with sub-millisecond increases in latency.