Blockchain, cryptography and tokens — NYC Bar presentation
0 likes618 views
The document provides an overview of blockchain technology, emphasizing its decentralized nature and the importance of cryptographic methods like private key cryptography for security. It distinguishes between cryptocurrencies and tokens, detailing their functions and examples while explaining the mechanics of transaction validation through consensus in distributed networks. Additionally, it discusses various types of cryptocurrency wallets and standards like ERC20 for token interoperability on the Ethereum network.
Blockchain, cryptography and tokens — NYC Bar presentation
- 1. Daniel Dewar, Founder paperchain.io Blockchain, crypto & tokens
- 2. 2
- 3. ● Sound engineer / sound designer ● Data / analytics (“Datalicious”) ● Blockchain ● Paperchain About me 3
- 5. Defining blockchain technology “Blockchain is a technology that allows natively digital transfer of value.” Karl Kreder, co-founder of Grid+
- 6. Blockchain ● Built from 3 technologies ○ Private key cryptography ○ Distributed network with a shared ledger ○ Incentive to service the network’s transactions, record-keeping and security (protocol)
- 8. Private key cryptography Private Key: b13a1d831cd311673c4a2c04932b96d09326ec29dc8b885c5deb266c4f623656 Corresponding Public Key: 0x0FD20Bdce5F2072b89FD2099070BB4cD8cA18Aa3
- 9. Private key cryptography The goal of a digital signature is for anyone who receives a transaction/message to be able to confirm that the person who wrote the message knew the corresponding private key.
- 13. ● The hash rate (total number of random numbers generated) of the entire Bitcoin network is ~7,000,000,000,000,000,000 or ~10^19 hashes per second (blockchain.info) ● The total number of possible solutions to a SHA-256 hash function is 2^256 or ~10^77 ● To guess every possible solution to a SHA-256 hash function would take ~10^58 seconds or ~10^50 years To have a 1% chance of guessing a digital signature the entire Bitcoin network would have to work together for ~5,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000 years... Hacking digital signatures myblockchainblog.com
- 14. Distributed network ● Large network where validators (nodes) reach a consensus that they witnessed the same thing at the same time. Use mathematical verification. ● Size of the network is important to secure network
- 17. Transactions sent to network coindesk.com
- 19. Incentivization ● Network mining solves the incentivization problem ● By offering your computer processing power to service the network, there is a reward available for one of the computers. ● Self-interest is being used to help service the public need
- 20. Bitcoin example ● Protocol eliminates double-spend ● Nodes serving network create and maintain a history of transactions ● When majority of miners arrive at same solution, new block is added. Block is timestamped.
- 21. ● Fundamental chain structures are similar or derivative ● Differences in how network is mined (incentivized) ○ Proof of Work - based on computing power, competition on who can solve first each block’s problem ○ Proof of Stake - creator of new block determined by wealth, or “stake” in network Blockchain
- 22. Cryptography
- 23. ● Returns a string of characters of a fixed size from a dataset of an arbitrary size ● They are deterministic. ● Small changes in the input changes the output. ● Quick to compute. ● “one-way functions”. Hash functions
- 24. ● SHA (Secure Hash Algorithm) published by US National Institute of Standards and Technology. ● Most blockchains use either SHA or similar cryptographic hash functions ● Bitcoin uses SHA-256 SHA
- 25. This is my password for this website. = 5CC98B74EEC5440694DCB70C55AE60BDB227D3DC81A4A65193660DDED7E60A43 SHA Example
- 26. This is my password for this website = 75ED430F31FADC17699A513A95FA3D21F413704AF08221657FD525DCE9C91483 SHA Example
- 27. This is my password for this website = 75ED430F31FADC17699A513A95FA3D21F413704AF08221657FD525DCE9C91483 5CC98B74EEC5440694DCB70C55AE60BDB227D3DC81A4A65193660DDED7E60A43 SHA Example
- 28. ● Allows to compare and validate passwords or private information without revealing the information to network Hash functions
- 29. ● Each transaction has a number (hash of the input variables of the transaction) ● Transactions are rolled up into blocks ● Hash generated for blocks ● Input data for blocks includes, previous block hash, transactions, miner address and random number Hash functions on blockchain
- 30. Hash pointing 1cd08afb9c196bec 347a4183668dd987 d1822af8a10167 Tx …. 008ab3 Tx … 390dt6 Tx … 4fbs00 Tx … m32al7 55987e57bd010081 77f7377036664e73 3606fff6e6e5de Tx …. 008ab3 Tx … 390dt6 Tx … 4fbs00 Tx … m32al7 296bad123bcde8c8 89101cf3986df66da b81b578343332 Tx …. 008ab3 Tx … 390dt6 Tx … 4fbs00 Tx … m32al7 14f71613fc675d00c bf20006c3b2328fb4 c8426720e665 Tx …. 008ab3 Tx … 390dt6 Tx … 4fbs00 Tx … m32al7 5a7c9d18b7b97a12 0f3d4d3040260da5 4e074a5abbd6db Tx …. 008ab3 Tx … 390dt6 Tx … 4fbs00 Tx … m32al7 33b9d989d759c991 db657ac6356bd825 1942fd724bd241 Tx …. 008ab3 Tx … 390dt6 Tx … 4fbs00 Tx … m32al7 259108061b9cc5 b0e36cdbcc28fa 75e60ae6fce7ea 4314ade8d292ac e805da43c001f4 cd81d42777456d 3052c5e2c185fa 655ae5f67a378c 6193f4b6ab1ea9
- 31. Hash pointing 1cd08afb9c196bec 347a4183668dd987 d1822af8a10167 Tx …. 008ab3 Tx … 390dt6 Tx … 4fbs00 Tx … m32al7 55987e57bd010081 77f7377036664e73 3606fff6e6e5de Tx …. 008ab3 Tx … 390dt6 Tx … 4fbs00 Tx … m32al7 296bad123bcde8c8 89101cf3986df66da b81b578343332 Tx …. 008ab3 Tx … 390dt6 Tx … 4fbs00 Tx … m32al7 14f71613fc675d00c bf20006c3b2328fb4 c8426720e665 Tx …. 008ab3 Tx … 390dt6 Tx … 4fbs00 Tx … m32al7 5a7c9d18b7b97a12 0f3d4d3412350975 54e074a5abbd6db Tx …. 00823b3 Tx … 390d1234t6 Tx … 4231400 Tx … 63432al7 33b9d989d759c991 db657ac6356bd825 1942fd724bd241 Tx …. 008ab3 Tx … 390dt6 Tx … 4fbs00 Tx … m32al7 259108061b9cc5 b0e36cdbcc28fa 75e60ae6fce7ea 4314ade8d292ac e805da43c001f4 cd81d42777456d 3052c5e2c185fa 655ae5f67a378c 6193f4b6ab1ea9
- 32. Cryptocurrencies
- 33. Cryptocurrencies vs Tokens ● Cryptocurrencies ○ Digitized currencies, encrypted through cryptography ○ Run on their own blockchains ● Tokens ○ Assets or utilities (represent coins, loyalty points, in-game assets) ○ Issued on blockchains (Ethereum, Waves, etc)
- 34. ● Bitcoin ○ Litecoin, Dogecoin, Bitcoin Cash, Bitcoin Gold ● Ripple ● Ethereum ● Waves ● NewEconomyMovement ● Stellar ● IOTA Cryptocurrencies
- 35. ● Hive - Your auditor, risk manager and liquidity broker on the same platform ● Everex - Everex enables you to transfer, borrow, and trade in any fiat currency, anywhere. No Bank account required. ● Grid+ - Grid+ uses advanced technology and innovative business practices to offer you dramatic savings in home energy, all powered by a simple mobile app ● EOS - The Most Powerful Infrastructure for Decentralized Applications ● OmiseGo - Unbank the Banked with Ethereum ● Status - Browse, chat and make payments securely on the decentralized web Examples of Tokens
- 36. ● https://consensys.net ● Venture production studio building decentralized applications (dApps) ● Brooklyn-based ● Ujo Music, Viant, Gnosis, Grid+, BoardRoom ● Consensys Academy ConsenSys
- 37. ERC20 Tokens ● Standard for tokens to be used on the Ethereum network (hosted and run on network) ● 6 functions and 2 events make up the basic standard
- 38. ERC20 Standards & Functions contract ERC20Interface { function totalSupply() public constant returns (uint); function balanceOf(address tokenOwner) public constant returns (uint balance); function allowance(address tokenOwner, address spender) public constant returns (uint remaining); function transfer(address to, uint tokens) public returns (bool success); function approve(address spender, uint tokens) public returns (bool success); function transferFrom(address from, address to, uint tokens) public returns (bool success); event Transfer(address indexed from, address indexed to, uint tokens); event Approval(address indexed tokenOwner, address indexed spender, uint tokens);
- 40. ● Software program that interacts with a blockchain to enable users to send and receive the currency and monitor balances Cryptocurrency wallets
- 41. ● Desktop - Ethereum Mist ● Online - Coinbase ● Mobile - MyCelium ● Hardware - Nano Ledger S ● Paper Types of wallets
- 42. Types of wallets
- 43. ● Wallets are pseudonymous ● All transactions are stored publicly and permanently on the blockchain ● Not tied to actual identity Wallet anonymity