Blockchain Introduction

Blockchain
Natthawat Boonchaiseree

Natthawat
Boonchaiseree
Muze Innovation Co., Ltd.

natthawat@muze.co.th

– H. L. Mencken
“For every complex problem there is an answer that
is clear, simple, and wrong.”

The complexity for minimum
component costs has increased
at a rate of roughly a factor of
two per year. Certainly over the
short term this rate can be
expected to continue, if not to
increase. Over the longer term,
the rate of increase is a bit more
uncertain, although there is no
reason to believe it will not
remain nearly constant for at
least 10 years.
—Gordon Moore

AI is disrupting the world’s

What is 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 (2016)

Blockchain
Durability and robustness
the blockchain cannot:

1. Be controlled by any single entity.

2. Has no single point of failure.

Transparent and
incorruptible
Each group of these transactions is referred to as a “block”.
Two important properties result from this:

1. Transparency data is embedded within the network as
a whole, by deﬁnition it is public.

2. It cannot be corrupted altering any unit of information
on the blockchain would mean using a huge amount of
computing power to override the entire network.

References: Don Tapscott on TED Talk

When someone borrow your
money…
- Traditional banking

Thinking with me…
IRONMAN ME

Thinking with me…
Boy! I have no money.
Please support me 1,000 BHT.
IRONMAN ME

Thinking with me…
OK! Sure.
Wait a little…
IRONMAN ME

Thinking with me…
Hello!
Please transfer $1000 from
my account to Ironman account.
Sure. Let me check.
ME BANKER

Thinking with me…
BANKER
Transactions List
Available Balance: 1,200.00 BHT
Ahh… Enough for transfer.

Thinking with me…
Conﬁrm!
ME BANKER
OK, Please conﬁrm

Thinking with me…
BANKER
Recording the transaction…
Transactions List
Available Balance: 200.00 BHT
Me ——> Ironman: 1,000.00 BHT

Thinking with me…
IRONMAN ME
Got it! Bye… … Stark

To establish trust between ourselves, we depend
on individual third-parties.

What’s the problems
for depends on them?
• What if that register in which the transaction was logged
gets burnt in a ﬁre?

• What if, by mistake, your account manager had written
$1500 instead of $1000?

• What if he did that on purpose?

• …

Is there a way to maintain the
register among ourselves
instead of someone else doing
it for us?

Setup the rules
• Enough people who would like not to depend on a third-
party. (At least three)

• Only then this group can maintain the register on their
own.
The requirement of this method is that there must be:

An example
• 8 people that agreed in mutual agreement

• No 3rd Party or Banks…
• Have details of each other’s account all the time

• Didn’t know other other identity

#1
#2
#3
#4
#5
#6
#7
#8
Transactions List
#Empty

#1
#2
#3
#4
#5
#6
#7
#8
Hi Everyone!!!
I will send 1,000 BHT to Ironman.
Please note it!

Hi Everyone!!!
I will send 1,000 BHT to Ironman.
Please note it!
#1
#2
#3
#4
#5
#6
#7
#8
Everyone will:
1. #8 has balance to transfer to #2
2. If OK. Will note it to his/her list

#1
#2
#3
#4
#5
#6
#7
#8
Hi Everyone!!!
I will send 10 BHT to Ironman.
Please note it!
Transactions List
#8 ——> #2: 1,000.00 BHT
Transactions List
#8 ——> #2: 1,000.00 BHT
Transactions List
#8 ——> #2: 1,000.00 BHT
Everyone will:
1. #8 has balance to transfer to #2
2. If OK. Will note it to his/her list

#1
#2
#3
#4
#5
#6
#7
#8
Transactions List
#8 ——> #2: 1,000.00 BHT
Out of space!

#1
#2
#3
#4
#5
#6
#7
#8
Sealing is
12345 !
Calculation…
Calculation…
Calculation… Calculation…
Calculation…
Calculation…
Calculation…

#1
#2
#3
#4
#5
#6
#7
#8
SEAL
SE
SE
SE
SE
SE
SE
SESE

#1
#2
#3
#4
#5
#6
#7
#8
SE
SE
SE
SE
SE
SE
SESE
SE
SE
SE
SE
SE
SE
SESE
SE
SE
SE
SE
SE
SE
SESE
SE
SE
SE
SE
SE
SE
SESE

#
#
#
#
#
#
#
#
Distributed Network P2P

#
#
#
#
#
#
#
#
Distributed Network P2P
OK!
OK!
OK!
OK!
OK! OK!

Earlier the third-party/middleman gave us the trust
that whatever they have written in the register will
never be altered.
In a distributed and decentralized system like
ours, this seal will provide the trust instead.

Deep & deeper
How to seal?
Cryptocurrencies
Cryptography
Hash
Encryption
Decryption
Private / Public Key

Deep
How to seal?
SEAL
Cryptocurrencies
Cryptography
Hash
Encryption
Decryption
Private / Public Key

Hash & Digital Signature
• How does the blockchain make use of hashes?

• Hashes are used in blockchains to represent the current
state of the world.

Hash
• Hash hash(x) != hash(y)

• Irreversible algorithm

• If hash(x) = a. So ﬁnd “x” from “a” is almost impossible!

• Basic Hash algorithm: MD5. Example at

• http://www.md5online.org/md5-encrypt.html

Cryptographic
Hash Function
• Property 1: Deterministic

• Property 2: Quick computation

• Property 3: Pre-Image resistance

• Property 4: Small change

• Property 5: Collision Resistance

12345
+
16321
00065
12345
16321

Tran
#8 ——>
Out
HASH
Block of transaction Data
NONCE
Block: N

Tran
#8 ——>
Out
HASH
NONCE
Tran
#8 ——>
Out
HASH
NONCE
Tran
#8 ——>
Out
HASH
NONCE
Block: N Block: N+1 Block: N+2

Roles in Blockchain
• User

• Miner or Coin Miner (Who has server for mining)

• Reward (User server for proving transaction)

• Transaction Fee (Less than traditional fee such as VISA,
Currency exchange)

Messaging in Blockchain
• Use key signature (Digital Signature)

Public key Private key
Key Signature

Public key
Private key
Key identiﬁer
#1
#2
#3
Public key

Public key
Private key
Key identiﬁer
#1
#2
#3
Public key
…

DEMO
https://anders.com/blockchain/hash.html

Bitcoin (BTC)
Bitcoin is not Blockchain

Blockchain powers the
popular
cryptocurrency Bitcoin.

Bitcoin Mining is the
buzz these days.

If you successfully mined a
Bitcoin block, you could get
yourself behind an
Audi A4 every 10 minutes.

BITCOIN is the world’s ﬁrst digital
cryptocurrency. It does not have
any central authority exercising
control.

NO
BANK
NO
GOVERMENTS
NO
CORRUPTIONS

Satoshi
Nakamoto
The Bloody Rain

Satoshi
Nakamoto
Unknown person or persons who
designed bitcoin
• 15.5 Millions Bitcoin in market

• He has 10% in market

Example Transaction in Bitcoin
IRONMAN ME
Send 1 BTC

IRONMAN ME
Send 1 BTC
Transaction
28d47eba0d190a344308cae581b2973f05438e0a93689518c2067ce29a694146
STATUS: UNCONFIRMED

IRONMAN ME
Send 1 BTC
Transaction
28d47eba0d190a344308cae581b2973f05438e0a93689518c2067ce29a694146
STATUS: UNCONFIRMED
SEAL
HASH: 1N52wHoVR79PMDishab2XmRHsbekCdGquK

https://blockchain.info/tree/290967931

IRONMAN ME
Send 1 BTC
Confirmed Confirmed Confirmed Confirmed Confirmed
OK !!!
DOUBLE SPENDING PASSED!!!!51% ATTACK PASSED!!!

IRONMAN ME
Send 1 BTC
I’ve a key.
It’s mine!!!

SEAL SEAL SEAL SEAL SEAL

#
#
#
#
#
#
#
#

Security
• Distribution data is diﬃcult to hack. Hacker need to hack all
distributor.

• Old traditional the centralize data is low security

• Single server blockchain is useless

• Real money not transfer! Just add/update the transaction to
all distribute servers.

• Message broadcast via network protocol like peer-to-peer
like a bit torrent. So all related network knows every
transaction.

Hacker
#
Hacker
#
#
#
#
#

Read more
Blockchain Revolution: How
the Technology Behind Bitcoin
Is Changing Money, Business,
and the World
by Don Tapscott (Author), Alex
Tapscott (Author)

Read more
Blockchain: The Beginners
Guide To Understanding The
Technology Behind Bitcoin &
Cryptocurrency (The Future of
Money)
by Artemis Caro (Author)

Read more
Mastering Bitcoin:
Programming the Open
Blockchain 2nd Edition
by Andreas M.
Antonopoulos (Author)

References
• http://www.techvshuman.com/2016/08/22/how-ai-is-
disrupting-the-worlds-largest-industries/

• Wiki - Blockchain

• Envato Elements Resources

• WTF is the Blockchain?

• A blockchain in 200 lines of code

• IBM - Block Chain demo

• Hash Wiki

• Satoshi_Nakamoto Wiki

• Cryptocurrencies & Cryptography

• QUORA Layman’s Term

• TED TALK - Don Tapscott

• Block chain in 2 minutes

• BLOG GEEKS

Blockchain Introduction

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