BCSE324L

Foundations of Blockchain Technology

Dr.Sendhil Kumar K.S

Associate Professor(Senior)
SCOPE
SJT 510 A04
Mobile : 9840068152

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Course Objectives

1. To understand building blocks of Blockchain.

2. To significance of Distributed Ledger Technology and Smart

Contract.

3. To exploit applications of Blockchain in real world scenarios

and their impacts.

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Course Outcomes

1. Understand Blockchain ecosystem and its services in real world

sceneries

2. Apply and Analyze the requirement of Distributed Ledger

Technology and Smart Contract

3. Design and Demonstrate end-to-end decentralized applications

4. Acquaint the protocol and assess their computational requirements

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Syllabus
Module:1 Foundations of Blockchain
Blockchain Architecture – Challenges – Applications – Blockchain Design
Principles –The Blockchain Ecosystem - The consensus problem -
Asynchronous Byzantine Agreement - AAP protocol and its analysis - peer-
to-peer network – Abstract Models - GARAY model - RLA Model - Proof
of Work (PoW) - Proof of Stake (PoS) based Chains - Hybrid models.
Module:2 Distributed Ledger Technology
Origin of Ledgers – Types and Features of Distributed Ledger Technology
(DLT) - Role of Consensus Mechanism - DLT Ecosystem - Distributed
Ledger Implementations – Blockchain - Ethereum - Public and Private
Ledgers – Registries – Ledgers - Practitioner Perspective: Keyless
Technologies, Transparency as a Strategic Risk, Transparency as a Strategic
Asset, Usage of Multiple IDs - Zero Knowledge Proofs - Implementation of
Public and Private Blockchain
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Module:3 Smart Contracts
Anatomy of a Smart Contracts - Life Cycle - Usage Patterns - DLT-based
smart contracts - Use Cases: Healthcare Industry and Property Transfer.
Module:4 Decentralized Organization
Decentralization versus Distribution - Centralized-distributed (Ce-Di)
organizations - Decentralized-distributed (De-Di) organizations -
Decentralized Autonomous Organizations: Aragon, DAOstack, DAOhaus
and Colony.
Module:5 Types of Blockchain Ecosystem
One-Leader Ecosystem - Joint Venture or Consortia Ecosystems -
Regulatory Blockchain Ecosystems - Components in Blockchain
Ecosystem: Leaders, Core Group, Active Participants, Users, Third-Party
Service Providers - Governance for Blockchain Ecosystems.
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Module:6 Blockchain Protocols
Ethereum tokens – Augur - Golem - Understanding Ethereum tokens
- App Coins and Protocol Tokens - Blockchain Token Securities Law
Framework - Token Economy – Token sale structure - Ethereum
Subreddit.
Module:7 High Performance Computing
Integrity of High Performance Systems - Data Provenance - Cluster
Construction and Deployment - Mock Workload - Blockchain
Software Evaluation - Blockchain storage of Integrity Data.
Module:8 Contemporary Issues

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Text Book and References
Text Book
1. Dhillon, V., Metcalf, D., and Hooper, M, Blockchain enabled
applications, 2017, 1st Agenda Item 65/39 - Annexure – 35
Proceedings of the 65th Academic Council (17.03.2022) 1042
Edition, CA: Apress, Berkeley.
Reference Books
1. Diedrich, H., Ethereum: Blockchains, digital assets, smart
contracts, decentralized autonomous organizations, 2016, 1st Edition,
Wildfire publishing, Sydney.
2. Wattenhofer, R. P, Distributed Ledger Technology: The Science of
the Blockchain (Inverted Forest Publishing), 2017, 2nd Edition,
Createspace Independent Pub, Scotts Valley, California, US.
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Course Assessment Methodology

1. CAT 1 – 15 Marks
2. CAT 2 – 15 Marks
3. Digital Assignment 1 – 10 Marks
4. Digital Assignment 2 – 10 Marks
5. Quiz 1 – 10 Marks
6. FAT – 40

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Digital Assignment

• Students want to Carryout an individual or group project

• List of Project titles will be shared by Faculty members/ Students
can choose their own innovative project using Block chain
• Team size Max – 3 members
• DA 1 First Review
• DA 2 Final Review
• Project report has to be submitted at the end of each review.

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 Introduction to Block Chain
Technology

Dr Sendhil Kumar K.S

Associate Professor (Sesnior),
Dept of IoT, SCOPE,
VIT University, Vellore
[email protected]
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Overview

1. Background
2. What is Blockchain Technology
3. Why Blockchain Technology?
4. How it works?
5. Applications

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1. BLOCKCHAIN TECHNOLOGY -
BACKGROUND

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History
• Cryptographer David Chaum first proposed a blockchain-like protocol in his 1982

• In 1991 Stuart Haber and W. Scott Stornetta worked on cryptographically secured

chain of blocks to implement a system wherein document timestamps could not be
tampered

• The first decentralized blockchain was conceptualized by a person (or group of

people) known as Satoshi Nakamoto in 2008.

• Nakamoto improved the design in an important way using a Hashcash-like method

to timestamp blocks without requiring them to be signed by a trusted party and
introducing a difficulty parameter to stabilize the rate at which blocks are added to the
chain.
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What is a Block?
• Block is a place in a blockchain where data is stored.
• In the case of cryptocurrency blockchains, the data stored in a block are
transactions.
• These blocks are chained together by adding the previous block's hash to
the next block's header.
• Blocks hold batches of valid transactions that are hashed and encoded
into a Merkle tree.
• Merkle Tree is a data structure composed of hashes of different blocks
of data, and which serves as a summary of all the transactions in a
block.
• Each block includes the cryptographic hash of the prior block in the
blockchain, linking the two. The linked blocks form a chain.
• This iterative process confirms the integrity of the previous block, all the
way back to the original genesis block.

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A block in a blockchain is a combination of three main components:

1. The data section contains the main and actual information like
transactions and smart contracts which are stored in the block.

2. The hash is a unique cryptographic value that works as a

representative of the entire block which is used for verification
purposes.

3. Lastly, The header/hash address contains metadata such as a

timestamp which has a random number used in the mining process and
the previous block's hash.
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What is Blockchain?
• Blockchain is a shared, immutable ledger for recording transactions,
tracking assets and building trust.
• An immutable time-stamped series record of data that is distributed
and managed by cluster of computers.
• A Blockchain is a chain of blocks which contain information.
• The data which is stored inside a block depends on the type
of blockchain.
• Bitcoin is a cryptocurrency, the one for which blockchain
technology was created.
• For Example, A Bitcoin Block contains information about the
Sender, Receiver, number of bitcoins to be transferred.
• The first block in the chain is called the Genesis block.
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2. WHAT IS BLOCKCHAIN
TECHNOLOGY?

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What is Blockchain Technology?
• Blockchain technology is to create a peer-to-peer (P2P) distributed ledger
that tracks various transactions in the network without any central control.
• It allows data to be stored globally on thousands of servers – while letting
anyone on the network see everyone else's entries in near real-time.
• That makes it difficult for one user to gain control of, or game, the
network.
• Blockchain combines decentralized and distributed databases containing a
registry of distributed transactions among peers or fellow participants in
the network.
• Therefore, we can define a blockchain as a globally decentralized and
distributed ledger. A Blockchain network is a distributed architecture
without the control of a centralized entity. As the name implies, a
blockchain is a chain of blocks.

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3. WHY BLOCKCHAIN TECHNOLOGY?

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Why Blockchain technology?
• Blockchain is ideal for delivering information faster and more
accurate because it provides immediate, shared and completely
transparent information stored on an immutable ledger that can be
accessed only by authorized users.
• We Can track orders, payments, accounts, production and much
more because members share a single view of the truth, you can see
all details of a transaction end to end, giving you greater confidence,
as well as new efficiencies and opportunities.
• To implement a system where document timestamps could not be
tampered with. Example:
Registration Department adopts blockchain
• For carrying out safe digital transactions. To serve as public
transaction ledger that no one can change but everyone can see.
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Uses of Blockchain Technology

• Blockchain is a secure, transparent, and efficient way to share data

across multiple parties.
• Blockchain cannot be altered or reversed, which means participants
can trust the data that they are presented with.
• Decentralized System - Conventionally, you need the approval of
regulatory authorities like a government or bank for transactions;
however, with Blockchain, transactions are done with the mutual
consensus of users resulting in smoother, safer, and faster transactions.
• In addition, blockchain’s confidential nature protects users from
identity theft, making it attractive to consumers and businesses alike.
•

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4. HOW BLOCKCHAIN
TECHNOLOGY WORKS

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Blockchain technology – How?
• A Blockchain is a type of diary or spreadsheet containing
information about transactions.
• Each transaction generates a hash.
• A hash is a string of numbers and letters.
• Transactions are entered in the order in which they occurred. Order
is very important.
• The hash depends not only on the transaction but the previous
transaction's hash.
• Even a small change in a transaction creates a completely new hash.

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Blockchain technology – How?
• The nodes check to make sure a transaction has not been changed
by inspecting the hash.
• If a transaction is approved by a majority of the nodes then it is
written into a block.
• Each block refers to the previous block and together make the
Blockchain.
• A Blockchain is effective as it is spread over many computers,
each of which have a copy of the Blockchain.
• These computers are called nodes.
• The Blockchain updates itself every 10 minutes.

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Each block has a hash and the hash of the previous block
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Block 3 will not communicate to block 2 and make all other
Blocks in the chain as invalid
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Working of Blockchain Technology

• https://www.youtube.com/watch?
v=SSo_EIwHSd4

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5. APPLICATIONS

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Realtime Uses of Blockchain technology

• Supply chain management

• Digital ID
• Healthcare
• Wills and inheritance
• Food safety
• Digital Voting
• Real Estate
• Data sharing …….
• AND MANY MORE
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A Practical example

• Food safety
• Intriguing use of blockchain in food safety is the ability to
trace your food from its origin to your plate.
• Using the immutable nature of blockchain, the transport of
food products from their origin to the supermarket can be
traced.
• In the case of food-borne illnesses, the source of the
contaminant can be traced quickly and accurately.

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CHICKEN DISTRIBUTER

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