Introduction to Blockchain and Cryptocurrencies
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Blockchain is a distributed ledger that can be used to securely track digital assets and transactions without a central authority. It works by distributing a record of transactions across multiple nodes in a network that must reach a consensus on changes. Smart contracts allow digital assets and transactions to be automatically verified and enforced based on predefined terms. Some potential applications of blockchain technology include digital currencies, supply chain management, digital identity, and more.
Introduction to Blockchain and Cryptocurrencies
- 1. Tarek Mahran TOGAF, PMP, ITIL, SCRUM, BPM and AZURE cloud certified Co-founder www.pure-minds.net IT Architect & Technology Advisor Introduction to Blockchain and Cryptocurrencies
- 2. What is a Blockchain? What is a Bitcoin? History of Bitcoin and Simplified example. History of Blockchain. How does a Blockchain works? How does a Blockchain get verified? Types of Blockchain networks. What is a Smart Contract? Applications and use cases of Blockchain technology. Q & A Agenda
- 3. What is Blockchain? Distributed Secured Logfile (Ledger) Technology used to transfer and track digital assets(value/ownership) from one entity to another. • Digital Assets: • Digital Money – Cryptocurrencies like Bitcoin, Ether, Ripple and Litecoin
- 4. TheComponents Applications PoW/PoSSecurity Business logics API & Interfaces Incentives Scalability SpeedPrivacy IoT devices Network Ledger Public or Private Validators Consensus Block Size technologymodel
- 5. Bitcoins = Blockchain? Bitcoin = Cr ypto currency Secure ledger Transparent and anonymous
- 6. What is a Bitcoin? Bitcoin • Satoshi Nakamoto 2008/2009 • Cryptocurrency - Digital Money • No Central entity governance or Control • Maintained in Peer to peer nodes in a blockchain called Ledger • Each node in the network had a copy of the ledger for validating and verifying transfer digital money from entity to another. • Today around 16.8M BTC Circulation. Total 21M BTC • Nowadays 1 BTC = 18000$ ???? • You Can Buy or Generate (Mine) BTC • Satoshi Nakamoto believed to have $4.7 billion • Bitcoin Pizza day: On 22 may 2010 two pizza cost 10K BTC. Worth $20M on 22 may 2017
- 8. “Satoshi Nakamoto” created the reference implementation that began with a Genesis Block of 50 coins 2008 August 18 Domain name "bitcoin.org" registered. October 31 Bitcoin design paper published November 09 Bitcoin project registered at SourceForge.net 2009 January 3 Genesis block established at 18:15:05 GMT January 9 Bitcoin v0.1 released and announced on the cryptography mailing list January 12 First Bitcoin transaction, in block 170 from Satoshi to Hal Finney https://en.bitcoin.it/wiki/History History of Bitcoin Bitcoin
- 10. Current Banking System challenges Omar wants to transfer 100 SAR to Adam 3 days + 20 SAR fees Omar 100 SAR Adam 80 SAR
- 11. Bitcoin Example
- 17. Altcoins
- 20. 1998 Decentralized digital currency 2 0 0 8 Blockchain Concept 2 0 0 9 Bitcoin 2017 The race is on! 2014 Becoming a mainstream term The Brief History of Blockchain 1991 Cryptographically secured chain of blocks
- 21. 1 Company A wants to transfer a value to Company B (i.e. digital currently, a digital asset, a certificate, etc.). 2 Company A uses a digital app to transfer the value to Company B. The app stamps the transaction with Company A digital signature, and now needs to be verified by blockchain. 4 The block containing Company A transaction is then broadcast to the entire network to be verified in each node. 5 After the verification process, Company B receives the value, and all the transaction history remains permanent and transparent available for all the blockchain participants. How does it work? Company A transaction is stored in the ledger as a block with other transaction. The block has an unique ID, the transition time and the ID of the previous block in the chain. 3
- 23. That decentralizes data in a trustless environment Traditional System Centralized system with stored ledger Blockchain System Distributed system with distributed ledger ▪ Traditional ledgers are centralized and use third parties and middlemen to approve and record transactions ▪ Blockchain safely distributes ledgers across the entire network and does not require any middleman ▪ The technology maintains multiple replicas like P2P torrent file sharing
- 25. Consortium Woodgrove Financial Contoso Bank Northwind Traders Bank b Insurance c Investment consortiumc Bank A Blockchain Location1 Location2 Location3 Location4 Department A Department B Public ConsortiumPrivate • Many, unknown participants • Writes by all participants • Reads by all participants • Consensus by Proof of Work • Known participants from one organization • Write permissions centralized • Reads may be public or restricted • Multiple algorithms for consensus • Known participants from multiple organizations • Writes require consensus of several participants • Reads may be public or restricted • Multiple algorithms for consensus Public blockchain Persona Woodgrove Financial Person B Northwind Traders Bank6 Bank1 Consortium 6 Source: Ethereum blog by Vitalik Buterin https://blog.ethereum.org/author/vitalik-buterin/ Blockchain | Network Types
- 26. Blockchain | Mining (Consensus) Types
- 27. Blockchain Features Peer-to-peer infrastructures (Bitcoin, Ethereum,..) Decentralized trustless protocol No need for central authority Maintains a ledger (blockchain) of transactions among a distributed network of computers Based on cryptography which allows secure transactions to be performed by the users Solves double spending problem Employs consensus algorithm for reaching consensus about the current state of the blockchain Value/tokens/ownership can be tracked and exchanged without requiring a central point of control Nodes (miners) verify transactions. They perform proof of work. In return, they win rewards and collect transaction fees. 51% attack may occur if 51% of hash power is held by one party.
- 28. Smart Contracts are unable to access external data or events based on time or market conditions. Calling code or data outside of a Smart Contract or blockchain breaks the general trust barrier and authenticity of transactions. Cryptlets will allow the blockchain to access external data securely, while maintaining the integrity of the blockchain. Evolution of Blockchain Blockchain 3.0
- 29. Virtual products Secure inform ation sharing Certifications Product lifecycleInternet of thingsDigital currencies Usages for Blockchain
- 32. PRODUCER Food Processor Milk producer supplies Milk to Food Processing Company IoT Enabled SMART CONTRACT The package has to be maintained at : Temperature < 10º C Humidity < 65% The terms of shipping are registered using a smart contract on the Blockchain 8ºC 60% Origin CARRIER 1 CARRIER 2 Retail Store 11ºC 64% Store At various points in the journey, the IoT device from the package sends the Temperature & Humidity data which are recorded on the blockchain SMART CONTRACT UPDATED Temperature 11ºC Humidity 64% The conditions of the contract have been violated. Carrier 2 is liable for penalty as the temperature of the package when it reached the retail store was above the prescribed limit 64% 64% Warehouse Carrier 2 SHARED LEDGER 8ºC 9ºC The milk product is sealed in an IoT-enabled package for shipping Temperature 8º C Humidity 60% Temperature 9º C Humidity 64% Warehouse Temperature 8º C Humidity 64% Freight Transportation
- 34. Resources Bitcoin: A Peer-to-Peer Electronic Cash System https://bitcoin.org/bitcoin.pdf http://coinmarketcap.com http://hashcash.org IDCoins: A Web of Trust Blockchain for Identity and Reputation, David V Duccini, http://bit.ly/idcoins “Mastering Bitcoin”, Andreas M.Antonopoulos , O’Reilly Media http://www.bitcoinsecurity.org/2012/07/22/what-is-bitcoin/ https://www.weusecoins.com
- 35. Contact Me My Linkedin : https://www.linkedin.com/in/tarek-mahran-togaf-pmp-itil-bpm-1144a112 My Email: tarek.s.mahran@gmail.com tmahran@pure-minds.net Mobile: +966599570399
- 36. Thank You QA