Blockchain technology is currently taking over the world with its amazing features. This presentation covers all you need to know about the basics of blockchain technology with beautiful animations

1. Blockchain
Application & Implementation
ABHINAND VALASSERI

2. For today
• Block chains are incredibly popular now a days.
• How do they work?
• How can they be used?
• What are the threats to technology?

3. A LITTLE History
• This technique was originally described by a group of
researchers in 1991 and was originally intended to
timestamp digital documents so that it is not possible to
backdate them or to tamper with them.
• 2009 Satoshi Nakamoto (pseudonym) in his paper “
Bitcoin: A Peer-To-Peer Electronic Cash System ”.
• This paper introduced a peer-to-peer version of
electronic cash which allows to conduct online
payments without need of a bank as intermediate.

4. WHAT IS IT ACTUALLY ?
• A blockchain is a distributed ledger which is open to
anyone.
• once a data has been recorded inside a blockchain it
becomes very difficult to change it.
• Each participant (device) in the blockchain network are
termed as ‘node’.
• Blockchain ensures transparency and integrity of
transaction through mathematics and not through trust.
• Persistent, transparent, public and append-only ledger

5. BLOCK
Data (different)
Hash(unique, on
creation, changes)
Previous block
Hash (integrity)

6. BLOCKCHAIN OR BLOCKING CHAIN
HASH : ZD23
PRE HASH :
0000
HASH : HY1T
PRE HASH :
ZD23
HASH : WRIO
PRE HASH :
HY1T
HASH : ERTY
PRE HASH :
ZD23

7. THE Flow diagram
Requestfora transaction
TransactionisbroadcastedtoP2P
network
validation
Networkof nodesvalidatesthe
transaction
Once verifiedthistransactionbecomes
part of thenew blockfor ledger
New block isaddedto existing
blockchain
Transactioniscomplete

8. GET into some details
• Open
ledger
ANDY $15
Andy
Bobby
CandyDerby
Andy -> Bobby $5
Bobby -> Candy $10
Candy -> Derby $20
$5
$10
$20
ANDY $15
Andy -> Bobby $5
Bobby -> Candy $10
Candy -> Derby $20
ANDY $15
Andy -> Bobby $5
Bobby -> Candy $10
Candy -> Derby $20
ANDY $15
Andy -> Bobby $5
Bobby -> Candy $10
Candy -> Derby $20
ANDY $15
Andy -> Bobby $5
Bobby -> Candy $10
Candy -> Derby $20
• Distributed
ledger

9. THE WORKING
Bobby
Candy
$10
$5
Andy -> Bobby $10
Bobby -> Candy $5
Andy
Andy -> Bobby $10
Bobby -> Candy $5
$3Bobby -> Derby $3
Derby Bobby -> Derby $3
Bobby -> Derby $3
•
Miners
• Incentive

10. Proof-of-work
• Modern computers can mine a block seconds. Modern
computers are powerful
• If someone tamper with blockchain and recalculates all
hashes then system will be valid even though a block is
modified
• To solve this
• Miner has to put a lot of computing power.
• Bitcoin requires hash of block to begin with zeros.
• Output of hashing function cannot be influenced. A lot
of combinations have to be tried. Requires lot of
computing power

11. Proof-of-work
• This amount of zeros require is termed as ‘difficulty’. If
machines gets more powerful difficulty will be increased
by the Bitcoin team.
• Difficulty : 6,379,265,451,411

12. Key features
Public key cryptography P2P networks Blockchain program

13. PUBLIC key cryptography
• Asymmetric encryption.
• Two parties involving in communication will have a pair of
keys public key and a private key. [RSA algorithm]
• These keys are mathematically linked but you cannot re-
engineer private key from public key and vice versa.
• When exchanging data both parties shares their public keys.
• Suppose Alice is sending a data to Bob. Alice encrypt the
data with Bob’s public key. Then sends the data. Bob on
receiving the data can decrypt the data using his private
key. Only bob is able to do this not even Alice. They require
to keep private key safe
• In Cryptocurrencies this makes sure that only the owner can
retrieve the money.

14. PUBLIC key cryptography
• All blockchain transaction involves two parties. Sender
(request initiator and receiver). Both have a public key
• This public key or unique identification is received by
each other.

15. P2p network
C
B
A
D

16. P2p network
• Distributed ledger
ANDY $15
Andy
Bobby
CandyDerby
Andy -> Boby $5
Bobby -> Candy $10
Candy -> Derby $20
$5
$10
$20
ANDY $15
Andy -> Boby $5
Bobby -> Candy $10
Candy -> Derby $20
ANDY $15
Andy -> Boby $5
Bobby -> Candy $10
Candy -> Derby $20
ANDY $15
Andy -> Bobby $5
Bobby -> Candy $10
Candy -> Derby $20
ANDY $15
Andy -> Boby $5
Bobby -> Candy $10
Candy -> Derby $20

17. Blockchain program
• Blockchain program, not only in finance sector.
• Currently implemented across multiple domains.
• Blockchain can be implemented by using any language,
• Solidity is the preferred
• 24 hours is required to implement a new blockchain.

18. Blockchain transactions
• Each transaction is verified by a miner by solving a
complex puzzle. Once he solves the puzzle and verify
the block he maintains and updates the ledger.
• The mathematical principle ensures that the nodes
automatically and continuously agree the current state
of the ledger and every transaction in it. Ensures that
everyone in network has same set of transaction and
same set of ledger.
• If anyone tries to corrupt a transaction, the nodes will
not arrive at consensus and hence will refuse to
incorporate the transaction in blockchain.

19. TYPES
• Public: similar to Bitcoin, go ethereum. Anyone in the
word can be a part of it. You can read and write data to
this blockchain if you are a miner of part of peer-to-
peer network as well.
• Private: only allow specific central persons of an
organization has the right to verify and add blocks to
blockchain. Anyone on internet can view the blockchain.
• Consortium: it is something public as well as private,
here a group of people can verify and add transaction
to blockchain. The creator has to specify the view of
blockchain to public if required by him.

20. Blockchain use cases
• Payment and transaction
• Health care
• Law enforcement agencies
• Voting system

21. CURRENT IMPLEMENTATION
• Cryptocurrencies
• Smart Contracts

22. Cryptocurrencies
• Concept of money
• The ledger concept
• Issues in this conventional system
• Require a transaction fee for each transactions
• Bank’s ledger is private and customer can’t even know where
his own money is getting invested or utilized by the bank
• A hacking attempt on ledger of bank can cause complete loss
of our money.
• Double spending issue
• Bitcoin is a blockchain not build on blockchain tech.

23. Cryptocurrencies
Benefits
• You control your money not banks.
• You can store your money on a smartphone or a pen
drive.
• Send money to anyone anywhere in world anytime.
• No transaction fee or intermediate commissions
required.
• Your identity completely anonymous thus no one can
track you even the receiver.

24. Smart contracts
• First used by Nick Szabo in 1997. He wanted to use a
distributed ledger to store contracts.
• Similar to real world, difference is that they are digital
• Smart contracts are tiny computer programs that are
stored inside a blockchain.
• Kickstarter
• Removes the middle man.
• Loans to offer automatic payments, insurance
companies can use them to process certain claims,
postal companies can use them to payment on delivery.

25. Smart contracts
• Ethereum
• Special programming language: solidity (JavaScript like
syntax)
• Bitcoin has support for smart contracts it is limited.
• A smart contract is a computer program that runs on a
blockchain network. It can be used to automate the
movement of cryptocurrency according to prescribed
rules and conditions.

26. RISK IN IMPLEMENTATION
• No system build perfect
• Blockchain is not yet hacked
• Faulty implementation

27. HACKING
The 51% rule
• Inherent to most cryptocurrencies
• Proof of work protocol for verifying transactions.
• Nodes spend vast amounts of computing power to
prove themselves trustworthy enough to add
information about new transactions to the database.
• Creating an alternative version of the blockchain: fork
• Attacker having dominance in computing power can
make fork the authorized version
• Double spending.

28. HACKING
Smart-contract bugs
• Fund, called the Decentralized Autonomous
Organization (DAO), 2016, Ethereum.
• Flaw allowed the hacker to keep requesting money from
accounts without the system registering that the money
had already been withdrawn, stole $60 million
• Patch – Additional Smart Contracts, Centralized Kill
switches.
• Re forked new chain, old one is now Ethereum Classic

29. QUANTUM COMPUTING
• It makes use of quantum bits or qubits instead of binary
digits like we use in the current computing system.
• Quantum bits (qubits) which had multiple values at the
same time
• 100 million times faster than current systems
• Cryptocurrencies work on public key cryptography.
• Only on forward creation of key must be made possible
(easy)
• Always a way to go backward. By going through every
single possibility.
• This link is equal to the factors of a number which is a
product of two enormous prime number. For the hackers to
extract the private key, the hacker would have to work out
the factors of that number which is the product of the prime
numbers

30. QUANTUM COMPUTING
• Shor’s Algorithm. (Quantum Algorithm)
• Quantum Cryptography

31. CONCLUSION
• Blockchain basically uses various mathematical
functions and as well as algorithms to create a highly
secure and distributed ledger system. Which enables
transactions to take place with our need of a third-party
or any need of transactions fee or commission. This is
why blockchain is called as a trust less system. You
don’t have to trust a third-party to make out your
transactions.

32. THANK YOU