Blockchain and Beyond

Transcript

1. Blockchain and Beyond Atul Shukla (25 Apr 2018) System Architect - Surewaves
2. Agenda • Prelude • About blockchains • Fundamental concepts • Applications of blockchains • Questions - bit.ly/2Hr8u1R
3. What is Decentralization “Decentralization is the process of dispersing functions, powers, people or things away from a central location or authority.”
7. Why Decentralization Matters • Censorship Resistance • Seizure Resistance • Access Control Resistance • Change Resistance
8. D L T Distributed ledger technology a.k.a (DLT)
9. Ledger
12. D L T Distributed ledger technology a.k.a (DLT)
13. Consensus in DLT • Voting and agreement on one copy of the ledger is called consensus • It is conducted automatically by a consensus algorithm
14. What is blockchain?
15. What is blockchain? Blockchain enables Decentralization.
16. What is blockchain? Blockchain is one form of Distributed ledger technology (DLT)
17. What is blockchain? • The structure of the blockchain makes it distinct from other kinds of distributed ledgers. • Data on a blockchain is grouped together in blocks. • The blocks are then linked to one another and secured using cryptography.
18. What is blockchain? Every blockchain is a distributed ledger, but not every distributed ledger is a blockchain.
19. Concepts powering Blockchain
20. Fundamental concepts • Cryptographic hash functions • Digital Signatures • Proof of work
21. Cryptographic Hash Functions Arbitrary Size Message~~~~~~~~~~~~ ~~~~~~~~~~~~~~~~~~~ ~~~~~~~~~~ Deterministic Cryptographic Hash Function Fixed length Unique String also called “Hash”
22. Properties of Cryptographic Hash Functions 1. Computationally efficient. 2. Collision resistance: It should be hard to find two inputs which maps to the same output 3. Hide information 4. Output should look random Note: (3,4) => 2
23. Digital Signature A mathematical way to bind your identity with a digital message User uses two keys - 1. Signing Key (Private) 2. Verification Key (Public)
24. Digital Signature - Signing Process Arbitrary Size Message (M) ~~~~~~~~~~~~~~~~~~~ ~~~~~~~ Mathematical Transformation Signature (SM) (Sequence of numbers) Signing Key (SK)
25. Digital Signature - Verification Process Arbitrary Size Message (M) ~~~~~~~~~~~~~~~~~~~ ~~~~~~~ Mathematical Transformation Verification Key (VK) Signature (SM) Yes Or No
26. Digital Signature Remarks 1. Signature depends on the message. 2. Digital signature is one of the killer application of Cryptographic hash functions.
27. Proof of Work (Mining) It’s a puzzle which is challenging to solve but easily verifiable.
28. Proof of Work (Mining) Challenge String Proof Response String Cryptographic Hash Function 0000000000XXXXXXXXXX
29. Blockchain Defined Main Chain Orphan Blocks Genesis Block
30. Blockchain Defined 1. Tx1 = Alice -----signed transaction-----> Bob which contains Alice’s and Bob’s public verification key as well. 2. Broadcast Tx1 to all the nodes in peer to peer network. 3. All nodes (miners) receives Tx1 but also other transactions taking place around the same time. 4. Nodes will start working on incorporating these transactions in a given time window into the ledger.
31. Blockchain Defined 5. First goal is to collate these transactions into what is called a transaction block. 6. Transaction block is like a page in a ledger. 7. Goal of miner is to take this page and add it to the global comprehensive ledger book.
32. Merkle tree TX1 TX2 TX3 TX4 hash#1 hash#2 Root hash
33. Blockchain Defined • Root hash of new transaction block will be combined with the previously accepted transaction block. Root hash ( Challenge, Proof ) H 0000000000XXXXXXXXXX
34. Blockchain Defined 8. Proof is broadcasted to other nodes in the peer to peer network. 9. It is possible that two nodes get the proof of work independently would end up trying to add to the existing chain. 10. To break the tie nodes will choose the block with most work involved.
35. Blockchain Defined 1. Tx1 = Alice -----signed transaction-----> Bob which contains Alice’s and Bob’s public verification key as well. 2. Broadcast Tx1 to all the nodes in peer to peer network. 3. All nodes (miners) receives Tx1 but also other transactions taking place around the same time. 4. Nodes will start working on incorporating these transactions in a given time window into the ledger. 5. First goal is to collate these transactions into what is called a transaction block. 6. Transaction block is like a page in a ledger. 7. Goal of miner is to take this page and add it to the global comprehensive ledger book. 8. Proof is broadcasted to other nodes in the peer to peer network. 9. It is possible that two nodes get the proof of work independently would end up trying to add to the existing chain. 10. To break the tie nodes will choose the block with most work involved.
36. Applications of blockchain • Currency - https://bitcoin.org • Smart Contracts • Decentralised Cloud Storage - https://storj.io • Digital Voting • and beyond ;)
37. Questions?
38. References • https://bitcoin.org/bitcoin.pdf • https://bitcoin.org/en/developer-documentation#block_chain • https://en.bitcoin.it/wiki/Category:Technical • https://en.bitcoin.it/wiki/Proof_of_work
39. Thanks! Contact: atul@surewaves.com