UNIT 1

HISTORY OF BLOCK CHAIN

Blockchain can be defined as the Chain of Blocks that contain some specific
Information. Thus, a Blockchain is a ledger i.e file that constantly grows and
keeps the record of all transactions permanently. This process takes place in
a secure, chronological (Chronological means every transaction happens
after the previous one) and immutable way. Each time when a block is
completed in storing information, a new block is generated.

History of Blockchain

Timelin
e Blockchain Bitcoin Ethereum

Stuart Haber and Scott

1991 Stornetta Work on The First NA NA
Blockchain

1992 Merkle Trees formed a NA NA

Timelin
e Blockchain Bitcoin Ethereum

legal corporation using a

system developed by Stuart
Haber and W. Scott
Stornetta

Stefan Konst published his

2000 theory of cryptographic NA NA
secured chains

Cryptographic activist Hal

2004 Finney introduced NA NA
“Reusable Proof of Work”.

Satoshi Nakamoto
conceptualized the concept
of “Distributed Blockchain”
2008 NA NA
in his white paper: ”A Peer
to Peer Electronic Cash
System”.

● James Howells
was an IT
worker in the
United
Kingdom, who
2009 starts mining NA
bitcoin.
● Satoshi
Nakamoto
Releases Bitcoin
White Paper

Ethereum
Blockchain Is
2014 Blockchain 2.0 is born. NA
Funded By
Crowdsale
Timelin
e Blockchain Bitcoin Ethereum

Ethereum
Linux Foundation launched Frontier
2015 NA
the Hyperledger project. Network was
launched

Bitfinex bitcoin exchange

Blockchain is accepted as a
was hacked resulting in
2016 single word instead of two NA
120,000 bitcoin being
different concepts
stolen.

Block.one company
introduced the EOS Japan recognized Bitcoin
2017 NA
blockchain operating as a legal currency.
system.

Google, Twitter, and

Facebook banned the Bitcoin turned 10 in the
2018 NA
advertising of year 2018.
cryptocurrencies.

Ethereum
network
2019 NA NA transactions
exceeded 1
million per day.

Ethereum
launched
2020 Stablecoins saw a rise. NA Beacon Chain in
preparation for
Ethereum 2.0.

2022 NA NA Ethereum
Merge.
Ethereum’s
consensus
mechanism is
 Timelin
e Blockchain Bitcoin Ethereum

now PoS.

Characteristics of blockchain
Below are some of the important features of blockchain that make it super!
1. Data immutability: This is the top-most feature as it ensures that no data
is corrupted. How this works is that every node on the system has a copy
of the ledger. So, to alter any data, there must be an unanimous
agreement of every node. This makes blockchain secure and transparent.
2. Decentralized: Blockchain is decentralized, meaning that no authority or
government, a group of persons, or a single individual controls this
technology. Rather, it is a group of nodes that manage the whole
transaction.
3. Single source of truth: In a blockchain, there is only one source of truth,
the distributed ledger. So, to know who owns what, or to study a
particular transaction, you only need to go to one place.
4. Transparency or provenance: Every transaction, be it tangible or non-
tangible, can be traced from the start to the finish with blockchain.
5. Consensus algorithm: For a transaction to be accepted and recorded on
the blockchain, all the participants or nodes must agree to follow the
same rules.
6. Anonymous: It is true that every transaction is transparent and open to the
public, but the actual persons are kept anonymous through the addresses.
For example, suppose a person sends a sum of money, the receiver will
know that the sender is linked to a bitcoin address, but they will not know
the actual address. There are several reasons for this – one of them is
privacy.
FUNDAMENTALS OF BLOCK CHAIN
Distributed ledger technology
All network participants have access to the distributed ledger and its
immutable record of transactions. With this shared ledger, transactions are
recorded only once, eliminating the duplication of effort that’s typical of
traditional business networks.
Immutable records
No participant can change or tamper with a transaction after it’s been
recorded to the shared ledger. If a transaction record includes an error, a
new transaction must be added to reverse the error, and both transactions
are then visible.
Smart contracts
To speed transactions, a set of rules that are called a smart contract is stored
on the blockchain and run automatically. A smart contract defines conditions
for corporate bond transfers, include terms for travel insurance to be paid
and much more.
How blockchain works

As each transaction occurs, it is recorded as a “block” of data

Those transactions show the movement of an asset that can be tangible (a
product) or intangible (intellectual). The data block can record the
information of your choice: who, what, when, where, how much. It can even
record the condition, such as the temperature of a food shipment.
Each block is connected to the ones before and after it
These blocks form a chain of data as an asset moves from place to place or
ownership changes hands. The blocks confirm the exact time and sequence
of transactions, and the blocks link securely together to prevent any block
from being altered or a block being inserted between two existing blocks.
Transactions are blocked together in an irreversible chain: a blockchain
Each additional block strengthens the verification of the previous block and
hence the entire blockchain. Rendering the blockchain tamper-evident,
delivering the key strength of immutability. Removing the possibility of
tampering by a malicious actor, and builds a ledger of transactions you and
other network members can trust.
 Blockchain and Distributed Ledger Technology
(DLT)
●

●
A blockchain is a digital ledger of transactions distributed across the
entire network of computers (or nodes) on the blockchain.
Distributed ledgers use independent nodes to record, share, and
synchronize transactions in their respective electronic ledgers
instead of keeping them in one centralized server. A blockchain uses
several technologies like digital signatures, distributed networks,
encryption/ decryption methods, and distributed ledger technology
to enable blockchain applications. Blockchain is one of the types of
DLT in which transactions are recorded with an unchangeable
cryptographic signature called a hash. That is why distributed
ledgers are often called blockchains.

What is Distributed Ledger Technology (DLT)?

Distributed Ledger Technology (DLT) is centered around an encoded and
distributed database where records regarding transactions are stored. A
distributed ledger is a database spread across various computers, nodes,
institutions, or countries and accessible by multiple people around the globe.
Key Features:
1. Decentralized: It is a decentralized technology and every node will
maintain the ledger, and if any data changes happen, the ledger will
get updated. The process of updating takes place independently at
each node. Even small updates or changes made to the ledger are
reflected and the history of that change is sent to all participants in
a matter of seconds.
2. Immutable: Distributed ledger uses cryptography to create a secure
database in which data once stored cannot be altered or changed.
3. Append only: Distributed ledgers are append-only in comparison to
the traditional database where data can be altered.
4. Distributed: In this technology, there is no central server or authority
managing the database, which makes the technology transparent.
To counter the weaknesses of having one ledger to rule all, So that
 there is no one authoritative copy and have specific rules around
changing them. This would make the system much more
transparent and will make it a more decentralized authority. In this
process, every node or contributor of the ledger will try to verify the
transactions with the various consensus algorithms or voting. the
voting or participation of all the nodes depends on the rules of that
ledger. In the case of bitcoin, the Proof of Work consensus
mechanism is used for the participation of each node.
5. Shared: The distributed ledger is not associated with any single
entity. It is shared among the nodes on the network where some
nodes have a full copy of the ledger while some nodes have only
the necessary information that is required to make them functional
and efficient.
6. Smart Contracts: Distributed ledgers can be programmed to execute
smart contracts, which are self-executing contracts with the terms
of the agreement between buyer and seller being directly written
into lines of code. This allows for transactions to be automated,
secure, and transparent.
7. Fault Tolerance: Distributed ledgers are highly fault-tolerant because
of their decentralized nature. If one node or participant fails, the data
remains available on other nodes.
8. Transparency: Distributed ledgers are transparent because every
participant can see the transactions that occur on the ledger. This
transparency helps in creating trust among the participants.
9. Efficiency: The distributed nature of ledgers makes them highly
efficient. Transactions can be processed and settled in a matter of
seconds, making them much faster than traditional methods.
10. Security: Distributed ledgers are highly secure because of their
cryptographic nature. Every transaction is recorded with a
cryptographic signature that ensures that it cannot be altered. This
makes the technology highly secure and resistant to fraud.
------------------------------
Decentralized Applications (DApps)
DApps are applications that run on a decentralized network, typically a
blockchain. They leverage smart contracts to operate autonomously and
ensure transparency and security.
Key Features:
1. Decentralization: Operate on a peer-to-peer network rather than a
centralized server, distributing data and processing across multiple
nodes.
2. Trustless Interaction: Users interact directly with the application
and smart contracts without needing to trust a central authority.
3. Open Source: Often open source, allowing for transparency and
community collaboration in development.
Usage:
1. Financial Services: Decentralized finance (DeFi) platforms for
lending, borrowing, and trading cryptocurrencies.
2. Gaming: Blockchain-based games that use NFTs for in-game assets
and rewards.
3. Social Networks: Platforms where users retain control over their
data and content.
Example:
Uniswap is a decentralized exchange (DEX) that allows users to trade
cryptocurrencies without relying on a central authority.
Blockchain Architecture:
What is Blockchain?
Blockchain is a distributed ledger technology that allows multiple parties to perform
transactions without the need for a central authority. Each transaction is verified and
validated by special nodes within the network, ensuring transparency, security, and
immutability. The blockchain structure consists of several key components, including
blocks, nodes, transactions, and consensus mechanisms.
Blockchain Architecture: Core Components

1. Blocks: Blocks are the fundamental units of the blockchain, containing a list of
transactions. Each block is cryptographically linked to the previous one, forming a
chain of blocks that is immutable and tamper-proof.
2. Nodes: Nodes are network participants that maintain a copy of the blockchain
and validate transactions. Miners, who perform the process of adding new blocks
to the blockchain through mining, are a type of node in the network.
3. Transactions: Transactions represent agreements or transfers of assets between
parties recorded on the blockchain. Each transaction is cryptographically secured
and added to a block for validation.
4. Consensus Mechanisms: Consensus mechanisms are protocols that ensure
agreement among nodes in the network on the validity of transactions. Proof of
Work (PoW), Proof of Stake (PoS), and Proof of Authority (PoA) are common
consensus algorithms used in blockchain networks.
Advantages and Disadvantages of Blockchain Architecture
Advantages

● Decentralization ensures transparency, security, and resilience against single

points of failure.
● Immutable ledger ensures data integrity and tamper-proof transactions.

● Enhanced security through cryptographic techniques and consensus

mechanisms.
● Transparency and auditability enable trust among network participants.
Disadvantages

● Scalability and performance limitations, especially in public blockchain networks.

 ● Energy-intensive consensus mechanisms, such as Proof of Work, raise concerns
about environmental sustainability.
● Regulatory uncertainty and legal challenges in some jurisdictions.

● Complex governance and interoperability issues in multi-organizational

consortium blockchains.
Applications of Blockchain Architecture
1. Finance: Blockchain is widely used in financial services for payments, remittances,
and asset tokenization.
2. Supply Chain: Blockchain improves transparency and traceability in supply chain
management, reducing fraud and inefficiencies.
3. Healthcare: In healthcare, blockchain enhances patient data management,
interoperability, and privacy protection.
4. Identity Management: Blockchain offers secure and decentralized identity
management solutions, reducing identity theft and fraud.
5. Smart Contracts: Blockchain enables the execution of self-executing smart
contracts, automating agreements and transactions.

Transaction in Blockchain
The transaction lifecycle in blockchain refers to the stages a transaction goes
through from its initiation to its final confirmation on the blockchain. Here is
an overview of the steps involved in transaction lifecycle in Blockchain:
1. Initiation of a Transaction
1. Creation: A user creates a transaction using a wallet or application,
specifying the amount and recipient’s address.
2. Signing: The transaction is signed with the sender’s private key to
ensure authenticity.
3. Broadcasting: The signed transaction is broadcast to the blockchain
network.
2. Transaction Propagation
1. Node Communication: Nodes receive the transaction and verify its
format and validity.
2. Transaction Pool (Mempool): Valid transactions are stored in the
mempool until picked up by miners.
3. Validation by Nodes: Each node independently checks that the
transaction meets network rules (e.g., sufficient balance).
3. Mining and Confirmation
1. Mining Process: Miners collect transactions from the mempool and
attempt to include them in a new block by solving cryptographic
puzzles.
2. Consensus Mechanisms: The network reaches agreement on the state of
the blockchain (e.g., Proof of Work or Proof of Stake).
3. Adding to the Blockchain: Once a block is mined, it is added to the
blockchain, and the transactions within it are considered confirmed.
4. Transaction Settlement
1. Recording on the Blockchain: The transaction is permanently recorded,
ensuring immutability.
2. Immutability of Transactions: Once confirmed, a transaction cannot be
altered or deleted.
3. Transaction Fee Distribution: Miners receive fees for processing
transactions, incentivizing their participation.
Challenges in the Transaction Lifecycle
Here are the challenges in the transaction lifecycle in Blockchain:
1. Network Congestion: As user adoption increases, the volume of
transactions can lead to congestion, resulting in slower processing
times and higher transaction fees.
2. Limited Throughput: Many blockchains have a limited number of
transactions they can process per second (TPS), which can hinder
their ability to handle large-scale applications.
3. Delay in Transaction Confirmation: Transactions may take longer to
confirm during periods of high network activity, which can be
frustrating for users expecting instant transactions.
4. Inconsistent Times: Different blockchains have varying confirmation
times, which can lead to uncertainty in transaction finality.
5. 51% Attacks: In proof-of-work systems, if a single entity gains control
of more than 50% of the network’s mining power, they could
potentially manipulate transactions.
6. KYC/AML Challenges: Implementing Know Your Customer (KYC) and
Anti-Money Laundering (AML) procedures within decentralized
systems can be difficult.
7. Fragmented Ecosystems: Different blockchain networks often operate in
silos, making it difficult to transfer assets or data between them
seamlessly.
8. Lack of Standardization: The absence of common standards for
interoperability can hinder collaboration between different
blockchain systems.
9. Error-Prone Processes: Mistakes in sending transactions, such as
entering incorrect addresses or amounts, can lead to irreversible
losses.

CHAINING BLOCKS
The Chaining Process
The chaining process in blockchain refers to how individual blocks are linked
together to form a secure and immutable ledger. Here is an overview of the
steps involved:
1. Transaction Initiation: A user initiates a transaction, which is broadcast
to the network of nodes for verification.
2. Block Creation: Validated transactions are grouped together into a
new block. This block contains essential information, including the
transaction data, a timestamp, a nonce (if applicable), and the hash
of the previous block.
3. Hashing: Each block undergoes a cryptographic hashing process,
generating a unique hash that represents the data within the block.
This hash is critical for linking the block to its predecessor.
4. Linking Blocks: The newly created block includes the hash of the
previous block, forming a chain. This linking mechanism ensures that
each block is securely tied to the one before it.
5. Consensus Verification: The new block is distributed across the
network. Nodes validate the block and the transactions it contains,
ensuring consensus is reached before adding it to the blockchain.
6. Block Addition: Once validated, the new block is added to the existing
blockchain, making the data within it a permanent part of the ledger.
The chain of blocks continues to grow as new transactions occur.
Applications of Chaining Blocks
Here are some key applications:
1. Cryptocurrencies: Chaining blocks is the core mechanism behind
cryptocurrencies like Bitcoin and Ethereum, where each transaction
is recorded in a secure and immutable ledger. This allows for peer-
to-peer digital currency exchanges without the need for
intermediaries.
2. Supply Chain Management: Blockchain can track the movement of
goods in real-time, providing transparency and accountability.
Chaining blocks enables all parties in the supply chain to access a
single version of the truth, improving traceability and reducing fraud.
3. Healthcare: In the healthcare sector, blockchain can securely store
patient records, ensuring that they are tamper-proof and accessible
only to authorized individuals. Chaining blocks helps maintain the
integrity and confidentiality of sensitive health data.
4. Digital Identity Verification: Blockchain can provide a secure and
decentralized solution for identity management. By chaining blocks
that store personal information and verification data, individuals can
control their identities and share them with trusted parties without
risking data breaches.
5. Voting Systems: Blockchain technology can enhance the security and
transparency of electoral processes. Chaining blocks can securely
record votes, making them tamper-resistant and easily auditable,
thus increasing public trust in elections.

Distributed Database Systems

A distributed database is a single logical database that is
distributed across multiple physical computers or locations.
 What is a Distributed Database?
A distributed database (DB) is a single logical database that is
distributed across multiple physical databases, servers, data centers, or
even separate networks. Distributed database management systems are
more resilient, provide lower latency, and protect data more effectively.
Modern database systems of all types have moved away from storing
data structures as local data, using distributed, public and private cloud
architectures to store data more reliably.
 What Are Advantages of
Distributed Databases?
The advantages of DB include many benefits, but the main objectives of
DB systems are scalability, query performance (speed), and availability.

NoSQL distributed databases apply the principles of DB systems the

most fully, because in NoSQL databases data is stored in a distributed
manner. Data allocation in DB environments can be managed to
optimize cost or speed of access internationally.

What is Decentralized Systems?

Decentralized systems operate without a central authority or control. Instead,
they distribute decision-making and operations across a network of nodes,
ensuring that no single entity has complete control. Here are the key
concepts:

1. Peer-to-Peer (P2P) Architecture: In decentralized systems, nodes

communicate directly with each other, forming a peer-to-peer

network. Each node has equal status and can initiate transactions or

provide services independently.

2. Distributed Ledger Technology (DLT): Decentralized systems often

rely on DLT, which records transactions across multiple nodes in a

transparent and immutable ledger. Blockchain is a well-known

 example of DLT, providing a decentralized and secure way to record

transactions.

3. Consensus Mechanisms: Decentralized systems require consensus

mechanisms to reach agreement on the validity of transactions and

maintain the integrity of the network. Proof-of-Work (PoW), Proof-

of-Stake (PoS), and Byzantine Fault Tolerance (BFT) are common

consensus algorithms.

4. Cryptography: Cryptography plays a crucial role in decentralized

systems, ensuring the security and privacy of transactions and data.

Techniques such as public-private key pairs and cryptographic

hashing are used to secure communications and verify identities.

5. Interoperability: Decentralized systems often strive for

interoperability, allowing different networks to communicate and

share resources seamlessly. Standards and protocols facilitate

interoperability between decentralized applications (dApps) and

platforms.

Etherium

What Is Ethereum?
Ethereum is a decentralized global software platform powered by blockchain
technology. It is most commonly known by investors for its native cryptocurrency,
ether (ETH), and by developers for its use in blockchain and decentralized finance
application development.
Anyone can use Ethereum—it's designed to be scalable, programmable, secure, and
decentralized—to create any secured digital technology. Its token is designed to pay
for work done supporting the blockchain, but participants can also use it to pay for
tangible goods and services if accepted.
Ethereum is like a decentralized computing network. It allows developers
to create

and run applications on its blockchain using smart contracts.

Blockchain technology gained public notice with the advent of Bitcoin in

2009. Bitcoin

is a cryptocurrency that runs on blockchain technology and is by far, the

most

popular and most ranked cryptocurrency. Ethereum was initially released

in 2015.

Within two years of its release, it was ranked the second-best blockchain
network,

Bitcoin is the first. The Ethereum network acquired more global interest
when China

stated that it is the best blockchain network ever created.

Ethereum is a Blockchain network that introduced a built-in Turing-

complete
programming language that can be used for creating various
decentralized

applications(also called Dapps). The Ethereum network is fueled by its

own

cryptocurrency called ‘ether’.

The Ethereum network is currently famous for allowing the

implementation of

smart contracts. Smart contracts can be thought of as ‘cryptographic

bank

lockers’ which contain certain values.

These cryptographic lockers can only be unlocked when certain

conditions

are met.

Unlike bitcoin, Ethereum is a network that can be applied to various other

sectors. Ethereum is often called Blockchain 2.0 since it proved the
potential of blockchain technology beyond the financial sector.
The consensus mechanism used in Ethereum is Proof of Stakes(PoS),
which

is more energy efficient when compared to that used in the Bitcoin

network,

that is, Proof of Work(PoW). PoS depends on the amount of stake a

node

holds.

History of Ethereum

2013: Ethereum was first described in Vitalik Buterin’s white paper in

2013

with the goal of developing decentralized applications.

2014: In 2014, EVM was specified in a paper by Gavin Wood, and the
formal

development of the software also began.

2015: In 2015, Ethereum created its genesis block marking the official
launch

of the platform.

2018: In 2018, Ethereum took second place in Bitcoin in terms of market

capitalization.

2021: In 2021, a major network upgrade named London included

Ethereum improvement proposal 1559 and introduced a mechanism for
reducing transaction fee volatility.

2022: In 2022, Ethereum has shifted from PoW( Proof-of-Work ) to

PoS(Proof-of-State ) consensus mechanism, which is also known as
Ethereum Merge. It has reduced Ethereum’s energy consumption by ~
99.95%.

Features of Ethereum

1. Smart contracts: Ethereum allows the creation and deployment of

smart contracts. Smart contracts are created mainly using a
programming language called solidity. Solidity is an Object Oriented
Programming language that is comparatively easy to learn.
1. Ethereum Virtual Machine (EVM): It is designed to operate as a
runtime environment for compiling and deploying Ethereum-based smart
contracts.

1. Ether: Ether is the cryptocurrency of the Ethereum network. It is the

only acceptable form of payment for transaction fees on the Ethereum
network.

1. Decentralized applications (Daaps): Dapp has its backend code

running on a decentralized peer-to-peer network. It can have a frontend
and user interface written in any language to make calls and query data
from its backend. They operate on Ethereum and perform the same
function irrespective of the environment in which they get executed.

1. Decentralized autonomous organizations (DAOs): It is a decentralized

organization that works in a democratic and decentralized fashion. DAO
relies on smart contracts for decision-making or decentralized voting
systems within the organization.

—--------------------------

What is an Ethereum Transaction?

An Ethereum transaction is a fundamental action that involves sending Ether
(ETH) or interacting with a smart contract on the Ethereum network. Each
transaction is a data packet that gets validated and added to the blockchain
by Ethereum nodes.

Key Components of a Transaction

Here are the key components of a transaction:

1. Transaction Hash: A unique identifier for the transaction, used to

look up details on the blockchain.

2. Sender Address: The Ethereum address from which the transaction

originates.

3. Receiver Address: The Ethereum address that will receive the value

of the smart contract that will be interacted with.

4. Value: The amount of Ether being transferred. For smart contracts,

this could also involve interacting with contract functions.

 5. Gas: A unit of measure for computational work required to process

the transaction. It includes a fee that compensates miners for

validating and adding the transaction to the blockchain.

6. Nonce: A unique number that ensures transactions are processed in

order and prevents double spending.

7. Data: For transactions involving smart contracts, this includes

instructions or payloads that specify what action the contract should

perform.

Interpreting Transaction Status

Here is how to interpret different transaction statuses:

1. Pending: The transaction has been broadcast to the network but

hasn’t yet been included in a block. If your transaction is pending, it’s

waiting to be processed. This could be due to low gas fees or high

network congestion. You may need to wait or consider increasing

the gas fee for faster processing.

2. Success: The transaction has been successfully processed, included

in a block, and confirmed by the network. Your transaction is

complete. Verify that the recipient has received the funds or that the

smart contract has been executed as expected.

3. Failed: The transaction could not be processed due to an error, such

as insufficient gas or a problem with the smart contract execution.

 Review the error message for details. You may need to correct

issues related to gas fees, contract errors, or other problems before

re submitting the transaction.

Tracking Transactions on Different Platforms

Here’s a guide to tracking your transactions on different platforms:

1. Mobile Wallets

Mobile wallets are apps installed on your smartphone that allow you to
manage your Ethereum transactions on the go. Examples include
MetaMask Wallet, Trust Wallet, etc.

Steps to Check:

1. Open your mobile wallet app.

2. Navigate to the transaction history or activity section.

3. Locate the transaction using the transaction hash or by browsing

recent activity.

2. Desktop Wallets

software applications installed on your computer that provide detailed

transaction tracking and management. Examples include Exodus, Electrum,
etc.

Steps to Check:
 1. Open your desktop wallet application.

2. Go to the transactions or history tab.

3. Search for your transaction using the transaction hash or browse

through the list.

3. Web-Based Wallets

Web-based wallets are accessed through a web browser and allow you to
track your Ethereum transactions online. Examples include MyEtherWallet
(MEW), Coinbase Wallet, etc.

Steps to Check:

1. Log in to your web-based wallet account.

2. Navigate to the transaction history or activity section.

3. Find your transaction using the transaction hash or recent

transactions list.

4. Blockchain Explorers

Blockchain explorers are online tools for viewing detailed information about
Ethereum transactions and blockchain data. Examples include Etherscan,
Ethplorer, etc.

Steps to Check:

1. Go to the blockchain explorer website.

2. Enter your transaction hash into the search bar.

 3. Review the transaction details, including status, value, and other

relevant information.

Ethereum development Tools

Here are some useful tools and resources:

Checking Transactions Using Blockchain Explorers

Here is an overview of how to use popular Explorers to check your
transactions:

1. Etherscan

6.Access Etherscan: Go to Etherscan.io.

1. Search for Your Transaction: Paste your transaction hash into the

search bar and hit Enter.

2. Review Transaction Details:

a. Status: Check if the transaction is Pending, Successful, or Failed.

b. Details: View information such as sender and receiver addresses,

the amount transferred, gas fees, and the number of

confirmations.

7 . Ethplorer
 1. Access Ethplorer: Visit Ethplorer.io.

2. Search for Your Transaction: Enter your transaction hash in the

search box and press Enter.

3. View Information:

1. Status: See the current status of the transaction.

2. Details: Examine transaction specifics including involved

addresses, token transfers, and gas used.

8. Blockchair

1. Access Blockchair: Go to Blockchair.com.

2. Search for Your Transaction: Input your transaction hash into the

search bar and press Enter.

3. Check Details:

1. Status: Verify the transaction’s status.

2. Details: View comprehensive details such as transaction

amount, involved addresses, and block information.

4. MetaMask: A popular browser extension that functions as both a

wallet and a transaction tracker. It allows you to view recent

 transactions and interact with decentralized applications (dApps). It

provides in-wallet transaction history and notifications for incoming

and outgoing transactions.

5. MyEtherWallet (MEW) Connect: A browser extension that integrates

with the MEW platform to provide seamless access to transaction tracking

and wallet management. It supports direct transaction checking from your

browser.

3. Etherscan API: It provides programmatic access to transaction data,

allowing developers to integrate Ethereum blockchain data into

their applications. It allows you to retrieve transaction details,

address balances, and more via API endpoints.

4. Infura: A service that offers API access to the Ethereum blockchain,

enabling developers to build applications and track transactions

without running their own node. It provides access to blockchain

data and allows to monitor transactions and interact with Ethereum

smart contracts.

5. Dune Analytics: A platform for creating custom queries and

visualizations of Ethereum blockchain data. It allows us to build and

view custom dashboards for tracking transactions, analyzing trends,

and exploring data.

 —--------------------

Consensus Algorithms in Blockchain

Blockchain is a distributed decentralized network that provides immutability,

privacy, security, and transparency. There is no central authority present to

validate and verify the transactions, yet every transaction in the Blockchain is

considered to be completely secured and verified. This is possible only

because of the presence of the consensus protocol which is a core part of

any Blockchain network. A consensus algorithm is a procedure through

which all the peers of the Blockchain network reach a common agreement

about the present state of the distributed ledger. In this way, consensus

algorithms achieve reliability in the Blockchain network and establish trust

between unknown peers in a distributed computing environment. The

Blockchain consensus protocol consists of some specific objectives such as

coming to an agreement, collaboration, cooperation, equal rights to every

node, and mandatory participation of each node in the consensus process.

Proof of Work (PoW): This consensus algorithm is used to select a miner for

the next block generation. Bitcoin uses this PoW consensus algorithm. The

central idea behind this algorithm is to solve a complex mathematical puzzle

and easily give out a solution. This mathematical puzzle requires a lot of

computational power and thus, the node who solves the puzzle as soon as
possible gets to mine the next block. For more details on PoW, please read

Proof of Work (PoW) Consensus

1. Practical Byzantine Fault Tolerance (PBFT)

2. Proof of Stake (PoS): This is the most common alternative to PoW.

3. Delegated Proof Of Stake (DPoS): This type of consensus

mechanism depends on the basis of the delegation of votes. The

users delegate their votes to other users. Whichever user then

mines the block will distribute the rewards to the users who

delegated to that particular vote.

4. Proof of Burn (PoB): With PoB, instead of investing in expensive

hardware equipment, validators ‘burn’ coins by sending them to an

address from where they are irreversible.

5. Proof of Capacity: In the Proof of Capacity consensus, validators are

supposed to invest their hard drive space instead of investing in

expensive hardware or burning coins. The more hard drive space

validators have, the better their chances of getting selected for

mining the next block and earning the block reward.

There also exist other consensus algorithms like Proof of Activity, Proof of

Weight, Proof of Importance, Leased Proof of Stake, etc. It is therefore

important to wisely choose one as per the business network requirement

because Blockchain networks cannot function properly without the

consensus algorithms to verify each and every transaction that is being

committed.

—-----------------------------------

UNIT 3 SECURITY

Cryptography in Blockchain

Cryptography in Blockchain

Cryptography is a method of securing data from unauthorized access. In

the blockchain, cryptography is used to secure transactions taking place

between two nodes in a blockchain network. As discussed above, in a

blockchain there are two main concepts cryptography and hashing.

Cryptography is used to encrypt messages in a P2P network and hashing

is used to secure the block information and the link blocks in a blockchain.

Cryptography primarily focuses on ensuring the security of participants,

transactions, and safeguards against double-spending. It helps in securing

different transactions on the blockchain network. It ensures that only the

individuals for whom the transaction data is intended can obtain, read and

process the transaction.

Role of Cryptography in Blockchain

Blockchain is developed with a range of different cryptography concepts.

The development of cryptography technology promotes restrictions for

the further development of blockchain.

● In the blockchain, cryptography is mainly used to protect user

privacy and transaction information and ensure data consistency.

● The core technologies of cryptography include symmetric

encryption and asymmetric encryption.

● Asymmetric cryptography uses digital signatures for verification

purposes, every transaction recorded to the block is signed by the

sender by digital signature and ensures that the data is not

corrupted.

Cryptography plays a key role in keeping the public network secure, so

making it fit to maintain the integrity and security of blockchain.

Cryptography

Cryptography is a technique or a set of protocols that secure information

from any third party during a process of communication. It is also made up

of two Greek terms, Kryptos term meaning “hidden” and Graphein, a term

meaning “to write”. Some terminologies related to Cryptography:

 ● Encryption: Conversion of normal text to a random sequence of

bits.

● Key: Some amount of information is required to get the

information of the cryptographic algorithm.

● Decryption: The inverse process of encryption, conversion of a

Random sequence of bits to plaintext.

● Cipher: The mathematical function, i.e. a cryptographic algorithm

which is used to convert plaintext to ciphertext(Random

sequence of bits).

Types of Cryptography

The two types of cryptography are:

● Symmetric-key cryptography.

● Asymmetric-key cryptography.

Let’s discuss each of these topics in detail.

1. Symmetric-key Encryption: It focuses on a similar key for encryption as

well as decryption. Most importantly, the symmetric key encryption

method is also applicable to secure website connections or encryption of

data. It is also referred to as secret-key cryptography. The only problem is

that the sender and receiver exchange keys in a secure manner. The
popular symmetric-key cryptography system is Data Encryption

System(DES). The cryptographic algorithm utilizes the key in a cipher to

encrypt the data and the data must be accessed. A person entrusted with

the secret key can decrypt the data. Examples: AES, DES, etc.

Features:

● It is also known as Secret key cryptography.

● Both parties have the same key to keeping secrets.

● It is suited for bulk encryptions.

● It requires less computational power and faster transfer.

Symmetric Cryptography
2. Asymmetric-key Encryption: This cryptographic method uses different

keys for the encryption and decryption process. This encryption method

uses public and private key methods. This public key method help

completely unknown parties to share information between them like email

id. private key helps to decrypt the messages and it also helps in the

verification of the digital signature. The mathematical relation between

the keys is that the private key cannot be derived from the public key, but

the public key can be derived from the private key. Example: ECC,DSS etc.

Features:

● It is also known as Public-key cryptography.

● It is often used for sharing secret keys of symmetric

cryptography.

● It requires a long processing time for execution.

● Plays a significant role in website server authenticity.

Asymmetric Cryptography