BLOCKCHAIN

TECHNOLOGY
BY : KSHITIJ CHANDRA NAYAK
REGISTRATION NUMBER : 1925107013
 CONTENTS

 BLOCKCHAIN INTRODUCTION
 HISTORY OF BLOCKCHAIN
 EVOLUTION OF BLOCKCHAIN
 OPERATION OF BLOCKCHAIN
 WHAT IS BITCOIN ?
 FEATURES OF BLOCKCHAIN
 LIMITATIONS OF BLOCKCHAIN
 CONCLUSION
 BIBILOGRAPHY
 BLOCKCHAIN INTRODUCTION
 A Blockchain is constantly growing ledger that keeps a permanent record of all the transaction
that have taken place, in a secure, chronological, and immutable way.
 Let’s breakdown the definition,
• Ledger: It is a file
• that is constantly growing.
• Permanent: It means once the transaction goes inside a blockchain, you can put up it
permanently in the ledger.
• Secure: Blockchain placed information in a secure way. It uses very advanced
cryptography to make sure that the information is locked inside the blockchain.
• Chronological: Chronological means every transaction happens after the previous one.
• Immutable: It means as you build all the transaction onto the blockchain, this ledger
can never be changed.
 HISTORY OF BLOCKCHAIN
 The blockchain technology was described in 1991 by the research scientist Stuart Haber and
W. Scott Stornetta and was intended to time-stamping digital documents to avoid backdate
or tampering of any records.

 In 1992, Merkle Trees were incorporated to the design which makes blockchain more
efficient by allowing several documents to be collected into one block, however this
technology went unused, and the patent closed in 2004.

 In 2004, computer scientist and cryptographic activist Hal Finney introduced a system called
Reusable Proof Of Work (RPoW) as a prototype for digital cash.

 Further, in 2008, Satoshi Nakamoto conceptualized the theory of distributed blockchains.

The word block and chain were used separately in Satoshi Nakamoto’s original paper but
were eventually popularized as a single word, the Blockchain, by 2016.
 EVOLUTION OF BLOCKCHAIN

Blockchain 1.0: Currency

 The implementation of distributed ledger technology (DLT) led to its first and obvious application :
cyptocurrencies. This allows financial transaction based on blockchain technology or DLT to be executed with
Bitcoin being the most prominent example in this segment.
Blockchain 2.0: Smart Contracts
 The new key concepts are Smart Contracts, small autonomous computer programs that live in the blockchain.
This technology offers one big advantage, is the blockchain making it impossible to tamper or hack Smart
Contracts. The Ethereum Blockchain is the most prominent is this field.
Blockchain 3.0: DApps
 DApp is an abbreviated form for decentralized application avoiding centralized infrastructure. It uses
decentralized storage and decentralized communication, so most DApps have their backend code running on a
decentralized peer-to-peer network, a blockchain.
Blockchain 4.0: Proof Of Stake
 The ‘Proof of stake’ or the PoS, takes the position of fourth innovation. However, current Blockchains operate
on ‘Proof of Work’, which enables a person/group with the largest computing power to take decisions. Often
known as ‘miners’, these groups operate huge data centers and provide security in exchange for payments in
INTRODUCTION EXAMPLE
USUAL SITUATION
 PROBLEMS WITH THIS MODEL
 The financial system is opaque and lacks transparency and fairness.
 All these intermediates are no volunteers, They work for money and get paid for their services.
 The transaction costs money to both the buyer and the seller.
 There are interest rates, fees, surcharges, etc.
 Credit transactions can cost several percent of the transaction.

 All these exchanges are error prone.

 Credit card information's are often stolen.
 Banks makes mistakes.

 An account holder is eventually not even the actual owner of his account.
 Banks and other payment processors like PayPal, Visa, and MasterCard may refuse to process payments for certain legal
entities.

 Financial exchanges are slow.

 OPERATION OF THE BLOCKCHAIN

 The blockchain data structure is an ordered, back-linked list of blocks transactions.

 Every block contains a hash of the previous block. This has the effect of creating a chain of blocks from the genesis block to the current block.
• Each block is guaranteed to come after the previous block chronologically because the previous block’s hash would otherwise not be known.

 Each block is also computationally impractical to modify once it has been in the chain for a while because every block
after it would also have to be regenerated.
 New transactions are currently being processes by miners into new blocks which are added to the end of the chain and
can never be changed or removed once accepted by the network.
 BLOCK STRUCTURE
 Each block contains, among other things:
 A record of some or all recent transaction.
 A reference to the block that came immediately before it.

 It also contains an answer to a difficult-to-solve mathematical puzzle, the hash or Proof of Work.
 BLOCKCHAIN OVERVIEW

 The blockchain network is a peer-to-peer network of independent nodes communicating together by message
broadcasting.

 A node is not necessarily connected to every other node, but at least some of them.
 BLOCKCHAIN PRINCIPLE

The operation principle of is pretty straightforward to understand. We’ll illustrate it on the

Bitcoin blockchain.
Principle is as follows :
1. A user wants to pay another user some bitcoins, he broadcasts a transaction to the network.
2. Miners add the transaction as they receive it to their current block, the one they are currently working
on.
3. Randomly, one of the miner may win the lottery and “mine” the block.
4. At that moment, this new “definitive” block is broadcasted to the network and added to everyone’s copy
of the blockchain.
BLOCKCHAIN PRINCIPLE
 PROOF OF WORK
 In order for a block to be accepted by network participants, miners must complete a
proof of work which covers all of the data in the block.
 The proof of work is a piece of data which is difficult (costly, time-consuming) to produce but easy for others to
verify and which satisfies certain requirements.
 Producing a proof of work can be a random process with low probability so that a lot of trial and error is required
on average before a valid proof of work is generated.
 Bitcoin uses the Hash cash proof of work system.

 Each block contains the hash of the preceding block, thus each block has a chain of
blocks that together contain a large amount of work.
 Changing of block( which can only be done by making a new block containing the same
predecessor) requires regenerating all successors and redoing the work they contain.
 This protects the block chain from tampering.
 The amount of successors is relevant when qualifying the validity of a block : at least 6 successors are required to
consider a block valid.
 WHAT IS BITCOIN?
 The bitcoin was introduced by Satoshi Nakamoto in the year 2008. Bitcoin is crypto-currency (virtual
currency), or a digital currency that uses rules of cryptography for regulation and generation of units of
currency.

 A bitcoin is a type of digital assets which can be bought, sold, and transfer between the two parties
securely over the internet. We can also use bitcoin to buy products and services as well as make
payments and exchange values electronically.

 A bitcoin is different from other types of traditional currencies such as Dollar, Pound
and Euro and also there are no physical coins for bitcoins or paper bills.

 If someone wants to send bitcoin to other one, then there is no need of bank or credit card, just simply
send bitcoin directly to another party over the internet securely and almost instantly.
 MINING
 In the Bitcoin world, transactions are broadcast to the network by the sender, and
all peers trying to solve blocks collect the transaction records and add them to the
block they are working to solve, This is called Mining.
 Mining is the process of adding transaction records to bitcoin’s public ledger of past transaction,
This ledger of past transactions is called the block chain as it is a chain of blocks.
 Mining is intentionally designed to be resource-intensive and difficult so that the number of
blocks found each day by day miners remains steady, Individual blocks must contain a proof of
work to be considered valid.
 The primary purpose of mining is to allow Bitcoin nodes to reach a secure, tamper-
resistant consensus.
 Mining is also the mechanism used to introduce Bitcoins into the system:
 Miners are paid any transaction fees as well as
 A “subsidy” or newly created coins.
MINERS’s REWARD
 APPLICATIONS OF BLOCKCHAIN

 Traceability of Food Products

 Storing Personal Data
 Payments
 Voting Solutions
 Trust , Security , Transparency , Simplicity
 Education
 Blockchain Mobile App
 Merchandising
 Insurance
 Social media
 ADVANTAGES OF BLOCKCHAIN
1. Increased Capacity :
 This is the first and an important feature of blockchain. The most remarkable thing about this Blockchain technology is
that there are a lot of computers working together which in total offers a great power.
2. Better Security :
 Blockchain technology has a better security because there is not even a single chance of shutting down of the system.

3. Immutability :
 Creating immutable ledgers is one of the main values of Blockchain. Any database that is centralized is subjected to get
hacked and they require trust in the third party to keep the database secure. Blockchain like Bitcoin keeps its ledgers in
a never-ending state of forwarding momentum.
4. Faster Settlement :
 Compared with traditional banking system which can be slow, require lots of time, the blockchain can settle money
transfer at really fast speed which saves lots of time and money.
5. Decentralized System :
 Decentralized technology gives power to store assets in network which further access by the means of the internet, by
which owner has a direct control over it and he can transfer his assets to anyone he wants.
 LIMITATIONS OF BLOCKCHAIN
 Complexity :
 The blockchain is not as simple as it looks like, non-techie or old generation people cannot understand this technology easily.
 Node, Cryptography, Mining these terms somehow understandable by some extent but it is not possible to have a trustworthy
service without understanding.
 Size of Blockchain :
 As per the recent survey the Bitcoin Blockchain is 170 GB but everyday when new transaction happen data are recorded to
blockchain so blockchain grows every second.
 Second famous crypto currency Ethereum blockchain size is more than 1 TB! That’s why large public implementation of
blockchain is critical.
 Need More Resources :
 More no of node should be required to facilitate this technology.
 Also, nodes are giving their time and energy to the network to run efficiently, so they expect a high return, therefore, any new
blockchain network need more initial resources to facilitate nodes.
 Human Errors :
 As blockchain is immutable therefor information going into the blockchain database to be 100% sure and correct if any mistake
happens with data then it cannot be altered.
 Also, most of the blockchain is access through Private Key if the private key is lost then it is almost impossible to access the
network, so this technology needs more accuracy than any system.
 CONCLUSION

 It should be understood that blockchain is a revolutionary technology that will

rebuild many present business models, completely transforms the economy
and society, and make trust a scientific and technological novelty.
 Nevertheless, the potential for blockchain technology and its full range of use
is still in the development stage.
 By reviewing all these aspects, we can understand that blockchain technology
is not going to disappear and deeply transform our economy and society.
 So we could say that the blockchain is in such a place like internet was in mid
90’s.
 BIBLIOGRAPHY

 https://en.wikipedia.org/wiki/Blockchain
 https://www.javatpoint.com/Blockchain
 https://
www.slideshare.net/JrmeKehrli/the-blockchain-the-technology-behind-bitcoi
n
 https://www.investopedia.com/terms/b/blockchain.asp
 https://blockgeeks.com/guides/what-is-blockchain-technology/
 https://www.youtube.com/watch?v=jKYhLpHJv8U
 https://
applicature.com/blog/blockchain-startups/overview-of-current-blockchain-ap
plications-advantages-and-disadvantages
THANK YOU!