Blockchain

Presented By Guided by
Name:- Biswaranjan Ghadai Name:- Dr Srinivas Sethi
Roll No:- 36411 Designation:- Associate Prof
Registration No:- 1705105049
Content

Introduction
Blockchain Overview
Working Principle
Block
Digital Signature
Security
Proof of Work
Type of Blockchain
Advantages
Disadvantages
Conclusion
References
Introduction

A blockchain is essentially a distributed database of records or public ledger of all

transactions or digital events that have been executed and shared among participating
parties. Each transaction in the public ledger is verified by consensus of a majority of
the participants in the system. And, once entered, information can never be erased. The
blockchain contains a certain and verifiable record of every single transaction ever
made.

It has the potential to revolutionize the digital world by enabling a distributed

consensus where each and every online transaction, past and present, involving digital
assets can be verified at any time in the future. It does this without compromising the
privacy of the digital assets and parties involved. The distributed consensus and
anonymity are two important characteristics of blockchain technology.
Blockchain Overview
Working Principle
Working Principle
Block
Digital Signature
• Digital signature ensure that the money is being sent to the person as well as the amount is being sent is correct.
• We take the public key of Sender public key of Receiver as well as the amount is to be sent.
• With help of a hash algorithm a hash code generated with is again encrypted using private key which then added as a
digital signature to the document.
• Once the document is transferred through network and digital signature is put through the hash algorithm and
decrypted with help of public key at the same time.
• If the hash value generated by both technique is equal then the signature is valid.
Security

• If some one try to change the data in block 2 the hash code of the block is going to be changed which results the next
block and all blocks that are connected to block 2 is invalid cause the tempered hash and the hash code present in block
3 will not matching.
• In order to change a single block the all block connected to it has to be recalculated.
• Now a days is it not impossible as the computers are more powerful so there is a additional feature in blockchain that is
Proof of work.
Proof of Work
• Proof of work is a technique which slows down the new block creation.
• This technique give additional security to blockchain as well as it solves the problem of generating two block at the
same time.
• It is consist of a complex math puzzle which is require to be solved in order to generate a new block
• Miner (who check and validate the transection) have to solve these complex mathematics problem which
generates hash of block.
• This mathematical puzzle is not trivial to solve and the complexity of the problem can be adjusted so that on
average it takes ten minutes for a node in the Bitcoin network to make a right guess and generate a block.
• There is very small probability that more than one block will be generated in the system at a given time.
• First node, to solve the problem, broadcasts the block to rest of the network.
• Occasionally, however, more than one block will be solved at the same time, leading to several possible branches.
However, the math of solving is very complicated and hence the blockchain quickly stabilizes.
• The network only accepts the longest blockchain as the valid one. Hence, it is next to impossible for an attacker to
introduce a fraudulent transaction since it has not only to generate a block by solving a mathematical puzzle but it
has to at the same time mathematically race against the good nodes to generate all subsequent blocks in order for
it make other nodes accept its transaction & block as the valid one. This job becomes even more difficult since
blocks in the blockchain are linked cryptographically together.
Proof of Work
• The idea behind Proof of work is:
find or generate value which is:
Difficult to generate (in term of cpu power)
yet easily verifiable.
 Example of proof of work in blockchain:
proof of work: block hash should have n leading 0.
for example: n=4, hash should have 4 leading zeros.
0000AB23F34D5CFC…..
 Generate Nonce
 Combination of nonce and block data generates the leading zero
 As per the difficulty of the challenge(value of n)
Type of Blockchain
Blockchain are of three types:-

 Pubic: Public blockchain have ledgers visible to everyone on the internet and anyone can verify and add
a block of transactions to the blockchain.

 Private: Private blockchains allow only specific people in the organization to verify and add transaction
blocks but everyone on the internet is generally allowed to view.

 Consortium: Here , only a group of organizations (such as banks) can verify and add transaction but the
ledger can open or restricted to selected groups.
Advantages

o Low transection cost compare to the traditional transection.

o There is no middle man in transection the cost as well as time required is less.
o The power is decentralized means everyone in the system have equal authority in
blockchain.
o Anonymity is maintained so there is no privacy issue.
o Blockchain is way more secure than the traditional ways
o Double spending is not allowed in blockchain because of its basic structure.
o Blockchain is immutable to hack.
Disadvantages

o No reversals or modification of transections so once the transection is done by mistake

you can’t reverse it.
o Key management is also a disadvantage of blockchain if you lost the private key you
lost the access to your account.
o Waste of the resources to solve the PoW.
o If more than 51% nodes are of attackers then the system is under their control they can
manipulate the data as they want.
Conclusion

To conclude, Blockchain is the technology backbone of Bitcoin. The distributed ledger functionality coupled
with security of Blockchain, makes it very attractive technology to solve the current Financial as well as non-
financial business problems.
There is enormous interest in Blockchain based business applications and hence numerous Start-ups working
on them. The adoption definitely faces strong headwind as described before. The large Financial institutions
like Visa, Mastercard, Banks, NASDAQ, etc., are investing in exploring application of current business models
on Blockchain. In fact, some of them are searching for the new business models in the world of Blockchain.
Some would like to stay ahead of the curve in terms of transformed regulatory environments of Blockchain.
To conclude, we envision BlockChain to go through slow adoption due to the risks associated. Most of the
Startups will fail with few winners. We should be seeing significant adoption in a decade or two.
References

o Michael Crosby, Nachiappan, Vignesh Kalyanaraman,”BlockChain Technology” , Sutardja Center for Entrepreneurship,
University of California Berkeley, October 16, 2015

o Mahdi H. Miraz, "Blockchain: Technology Fundamentals of the Trust Machine," Machine Lawyering, Chinese
University of Hong Kong, 23rd December 2017, Available: http://dx.doi.org//10.13140/RG.2.2.22541.64480/2

o Don Tapscott and Alex Tapscott, Blockchain Revolution: How the Technology Behind Bitcoin Is Changing Money,
Business, and the World, 1st ed. New York, USA: Penguin Publishing Group, 2016.

o ISO/IEC 17788. https://www.iso.org/standard/60544.html

Thank you