The curious case of Blockchain Technology
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The document discusses blockchain technology, outlining its basic principles, features, and applications across various sectors such as cryptocurrency, government services, supply chain management, IoT, and healthcare. Key concepts include decentralized ledgers, transaction validation through peer networks, and the importance of cryptography in ensuring security and authenticity. It also highlights case studies showcasing the benefits of blockchain, such as error reduction and enhanced transparency.
The curious case of Blockchain Technology
- 1. The Curious Case of Blockchain - Sugnyan Bettadapura - Ritesh Mehrotra © TeckTalks, 2016
- 2. WHAT WE’LL BE TALKING ABOUT 01 Blockchain basics 02 Blockchain in Cryptocurrency ecosystem 03 Blockchain in Government services 04 Blockchain in Supply Chain Management 05 Blockchain for Fraud control 06 Blockchain for Internet of Things (IoT) END © TeckTalks, 2016
- 3. What is Blockchain? …. Common themes discussed in the context of Blockchain Stores transactions Replication across a number of systems Decentralized/ Distributed Ledger Peer to Peer replication Enforce read/write access rights to prove identity, authenticity Cryptography and Digital Signatures Difficult to change Historical records Easy to detect attempts to modify records Longest chain Proof of Work © TeckTalks, 2016
- 4. Decentralized ledger ….How different are they ?? Traditional Centralized Ledger › Trusted Counterparties › Proprietary: Licencing requirements › Gate Keepers Extract Tolls © TeckTalks, 2016
- 5. Decentralized ledger ….Central authority eliminated Decentralized Ledger › Peer 2 Peer › Cryptographically secure › Open Source › Blockchain protocol is available to any asset © TeckTalks, 2016
- 6. How Blockchain relationships work (Process view)? A transaction is reported Broadcasted to a P2P network Validation of the transaction & user’s status using known algorithms by the network of nodes 1 2 3 4 5 6 7 Transaction marked as Verified Post verification, the transaction is combined with other transactions to create a new Block of data for the ledger Add new block to the existing Blockchain The transaction is marked complete Transaction reported Transaction Authorized Transaction Recorded Transaction Executed © TeckTalks, 2016
- 7. Transactions – How they look? © TeckTalks, 2016 Reference: https://bitcoin.org/bitcoin.pdf
- 8. Building Blocks © TeckTalks, 2016 Blocks – How are they structured?
- 9. Validating Transactions - Proof of Work © TeckTalks, 2016
- 10. Hash function { Root Hash Previous Block Hash Nonce Hashed Transactions A+B Hash C+D Hash Transaction A Transaction B Transaction C Transaction D © TeckTalks, 2016 Arbitrary value incremented for each check Each potential block needs to generate a hash value such that it has a series of pre-defined zero bits. The hash is generated with these inputs • Previous block’s hash address • Hash of hashes: All transactions in a potential block are hashed to a Merkle Tree to generate a Root Hash • A randomly generated arbitrary value The nonce is incremented and applied and hash function till the zero bits condition is met How it works?
- 11. © TeckTalks, 2016 Generated with 20 zero bits References to previous and next blocks Root Hash of transactions in a block Try it out here • http://www.xorbin.com/tools/sha256-hash-calculator • Live Blockchain Transactions: https://blockchain.info/ Sample Block
- 12. How should conflicts be resolved? Consensus achieved by using Longest Chain rule If there are multiple competing valid chains, believe the one with more blocks. © TeckTalks, 2016
- 13. What’s in it for me ?? … Incentives Block Rewards Block Makers Block Data storage Transaction validators © TeckTalks, 2016
- 14. Upgrades? Blockchain Improvement Proposal (BIP) Submit New features Suggestions Design changes Build consensus within the community Document dissenting opinions Responsibilities of BIP author © TeckTalks, 2016
- 15. Case study: Blockchain in Cryptocurrency ecosystem Code’s resistance to counterfeiting Network’s ability to prevent double spending Network security and transaction verification Embedded Incentives to miners Personal data security enabled by public-private key cryptography Dedicated core team of developers and miners who support & improve the code Electronic currency that uses cryptography for security, mostly anonymous and not issued by any central authority 600+ Cryptocurrencies exist today Differences between various cryptocurrencies © TeckTalks, 2016
- 16. Case study: Blockchain in Government Services Reduce risk of manual errors Create Secure process for transferring documents Verify identity of users Registering and recording land titles © TeckTalks, 2016
- 17. Case study: Blockchain in Supply Chain Management Letter of Credit management Improve security by reducing errors Predictable working capital for companies Simplify transaction processing Bring Transparency in transactions © TeckTalks, 2016
- 18. Case study: Blockchain in Internet of Things (IoT) Distributed Transaction ledger for IoT transactions Peer-to-peer messaging Distributed file sharing Autonomous device coordination © TeckTalks, 2016
- 19. Case study: Blockchain in Healthcare Electronic Medical Record (EMR) Pseudonymous (Personal health record encoded as digital asset) Private Key (Only permissioned personnel can access) © TeckTalks, 2016