IBM

Introduction to Blockchain
Technology
Understanding the Basics and Applications
SYLLABUS

UNIT 1 -BLOCKCHAIN OVERVIEW

UNIT 2 -HTML AND CSS
UNIT 3 - JAVASCRIPT
UNIT 4- NODE JS
UNIT 5- DOCKER ESSENTIALS
UNIT 6 - BITCOINS AND ETHEREUM
Agenda :

• CRYPTOCURRENCY
• EXAMPLE OF CRYPTOCURRENCY
• TERMINOLOGIES ABOUT CRYPTOCURRENCIES
• TYPES OF CRYPTOGRAPHY
• TRADITIONAL APPROACH vs BLOCKCHAIN APPROACH
• WHAT IS BLOCK CHAIN ?
• WHY BLOCK CHAIN IS IMPORTATNT ?
• HOW BLOCK CHAIN WORKS ?
Agenda :

• DIGITAL SIGNATURE

• NODES IN BLOCK CHAIN ?

• MERKLE TREE

• BLOCK CHAIN ARCHITECTURE

• TYPES OF BLOCK CHAIN

• CONSENSUS IN BLOCKCHAIN

• TYPES OF CONSENSUS IN BLOCKCHAIN

• WHAT IS HYPERLEDGER ?
|WHAT IS BLOCK CHAIN ?|
• Blockchain is a digital ledger or a record-keeping system that stores data securely and transparently
across multiple computers. Think of it as a chain of blocks, where each block contains information like
transactions, and these blocks are linked together in a sequence. (or)

• A blockchain is a decentralized, distributed and public digital ledger or Digital Database that is used to
record transactions so that that makes it impossible or difficult for the system to be changed, hacked, or
manipulated.
WHY TRANSACTION FAILED
First Phil sends 2 bitcoins to Jack
• A HACKER WILL NOT BE
ABLE TO ALERT THE
DATA IN THE
BLOCKCHAIN BEHAUSE:
• Each user has a copy of
the ledger
• The data within the blocks
are encrypted by complex
algorithms
 |CRYPTOCURRENCY|

• Cryptocurrency is a type of digital or virtual currency that uses

cryptography for secure financial transactions.

• Unlike traditional currencies issued by governments

(fiat currencies INR ,USD),cryptocurrencies operate on

decentralized networks, usually based on Blockchain technology.

| EXAMPLE OF CRYPTOCURRENCY |
1. Bitcoin (BTC) The Original Cryptocurrency: The first cryptocurrency, created in 2009 by an unknown
person (or group) called Satoshi Nakamoto. (21 million coins)

Purpose: Digital money for peer-to-peer transactions without needing banks.

| EXAMPLE OF CRYPTOCURRENCY |

2.Ethereum (ETH): Ethereum introduced the concept of smart contracts,allowing developers to create
decentralized applications (DApps) on its blockchain. Smart contracts are self-executing contracts with
the terms of the agreement directly written into code. They automatically execute when certain
conditions are met, without the need for intermediaries.(n\w,platform).ether(coin)

3.Ripple (XRP): Designed for banks and financial institutions to enable quick, low-cost international
money transfers. Focuses on global payments rather than everyday users.

4.Litecoin (LTC): A faster and lighter version of Bitcoin for smaller transactions. Faster transaction
times than Bitcoin, 84 million coin.
|TERMINOLOGIES ABOUT CRYPTOCURRENCIES|
|TERMINOLOGIES ABOUT CRYPTOCURRENCIES|
1. Centralization :In a centralized system, a single authority or organization controls everything. All
decisions, data, and operations go through this central point.

Example Scenario: Bank System

You have a bank account,To send money to a friend, you need the bank to:

• Verify your transaction.

• Approve and process it.

NOTE :The bank acts as a middleman.

• If the bank’s system fails or is hacked, all operations stop.

• You must trust the bank to manage your money properly.

|TERMINOLOGIES ABOUT CRYPTOCURRENCIES|
2. Decentralization : In a decentralized system, control is distributed across multiple participants or
nodes. There is no single central authority.

Example Scenario: Bitcoin Network

• You want to send Bitcoin to a friend.

• The transaction is verified by multiple independent users (called nodes or miners) across the Bitcoin
network.

• Once verified, the transaction is recorded on a blockchain that everyone can see.

NOTE : No middleman—transactions are peer-to-peer.

• If one node fails, others continue operating, so the system doesn’t stop.

• You trust the network and its transparent rules, not a central authority.
|CRYPTOGRAPHY |
• Cryptocurrencies use cryptographic techniques to secure

transactions and control the creation of new units. Public and

private keys are used to facilitate transactions securely, and

complex mathematical algorithms ensure the

integrity of the network.

• Cryptography is the science of protecting information by

transforming it into a secure format so that only the intended

recipient can understand it. It’s like creating a secret code that

only specific people can unlock.

| WHY CRYPTOGRAPHY IS IMPORTANT ?|

It ensures:

• Confidentiality: Keeps information private and secure from unauthorized access(hacked).

• Integrity: Ensures the information hasn’t been tampered(modify) with.

• Authentication: Confirms the identity of the sender and receiver.

• Non-repudiation: Prevents denial of sending a message.

| How Does Cryptography Work? |
Cryptography uses encryption to secure information.

• Encryption: Converts plain text (readable information) into a secret code (called ciphertext).

Example: "HELLO" → "JGNNQ" (coded message).

• Decryption: Converts the ciphertext back into plain text using a "key" (secret password or code).

Example: "JGNNQ" → "HELLO" (original message).

|TYPES OF CRYPTOGRAPHY |
Cryptography has two main types: Symmetric and Asymmetric.

1. Symmetric Cryptography

Definition: The same key is used for both encrypting (locking) and decrypting (unlocking) the message.

EX: Think of it as a shared key for a single lock that both you and your friend have.
|TYPES OF CRYPTOGRAPHY |
2. Asymmetric Cryptography : Two different keys are used:

• A public key for encrypting the message.

• A private key for decrypting the message.

EX : Think of it like a mailbox:

• Anyone can drop letters in (public key).

• Only you can open it with your private key.

|TRADITIONAL APPROACH vs BLOCKCHAIN APPROACH|
|TRADITIONAL APPROACH vs BLOCKCHAIN APPROACH|
 |HOW BLOCK CHAIN WORKS|
• Data Creation: Someone initiates a transaction (e.g., sending cryptocurrency).

• Verification: The transaction is verified by computers (nodes) in the network.

• Recording in a Block: Once verified, the transaction is added to a "block" of other transactions.

• Block Linking: The block is connected to the previous one, forming a chain.

• Immutable Record: Once added, data in the blockchain can’t be changed.

|DIGITAL SIGNATURE |
• A digital signature is a mathematical technique used in blockchain to verify the authenticity of
transactions and ensure the identity of the sender. It works like a virtual fingerprint, ensuring that data
or messages haven’t been tampered with.

• A digital signature doesn’t look like a handwritten signature or an image. Instead, it’s a unique string of
characters, like a long code, generated using cryptographic algorithms. It’s invisible to users during
most interactions (e.g., on WhatsApp or digital contracts).

EX :

3045022100E3B0C44298FC1C149AFBF4C8996FB92427AE41E4649B934CA495991B7852B8550220
34D9E6C2A7743E993D18C6FA21FB7341BDEB792E4319B46EDE5F88B82E365B8
|NODES IN BLOCK CHAIN ?|
• A node is any device (like a computer, server, or smartphone) that is connected to a blockchain
network.

• It plays a role in maintaining, verifying, and storing the blockchain's data.

Types of Nodes in Blockchain :

1.Full Nodes:

• Store a complete copy of the blockchain.

• Validate and verify transactions.

2.Light Nodes (Light Clients) :

• Store only part of the blockchain data.

• Suitable for devices with limited storage and computing power.

|MERKLE TREE|
|MERKLE TREE|
| BLOCK CHAIN ARCHITECTURE|
|TYPES OF BLOCK CHAIN |

• Public Blockchain is the most decentralized and transparent.

Ex : Bitcoin: Anyone can join the network to send/receive transactions or mine.

• Private Blockchain is controlled and suitable for enterprises.

Ex : Hyperledger: Used by a company for securely managing internal supply chain.

• Consortium Blockchain balances decentralization and control for specific use cases.

Ex : R3 Corda: Banks working together for secure, shared financial records.

• Hybrid Blockchain combines the strengths of public and private blockchains.

Ex : Dragonchain: Public-facing loyalty rewards while keeping sensitive data private.

|CONSENSUS IN BLOCKCHAIN|

• Consensus in blockchain refers to the process by which all the participants (nodes) in a blockchain
network agree on the validity of transactions and ensure everyone has the same copy of the blockchain.

How Consensus Works in Blockchain :

• A transaction is created and broadcasted to the network.

• Nodes (participants) validate the transaction based on the rules of the blockchain.

• Once validated, the transaction is added to a block.

• Nodes use a consensus mechanism to agree on which block to add to the blockchain.
|TYPES OF CONSENSUS IN BLOCKCHAIN|

• PoW (Proof of Work) may be a way of verifying current and past transactions. The work that goes

into solving puzzle generates rewards for whoever solves it called it as mining. In other words, this is

often an algorithm that’s designed to verify transactions and obtain new blocks added to blockchain.

With Proof of Work, miners are competing to be primary to finish a complex mathematical puzzle

which will generate this new block, meaning that they’ll be ready to collect some new Bitcoins as a

rewards.

• Pos (Proof-of-stake) is a consensus algorithm that decides on who validate next block, according to

how many coins you hold, instead of miners cracking cryptographic puzzles using computing power to

verify transactions like they do with traditional Proof-of-Work.

|WHAT IS HYPERLEDGER ?|
• Hyperledger is an open-source blockchain platform designed

for businesses to create their own private or permissioned

blockchain applications. It is not a cryptocurrency like Bitcoin

or Ethereum but a framework that helps organizations use

blockchain technology efficiently.

TOOLS FOR BLOCKCHAIN IMPLEMENTATION

● Programming Languages: Solidity (for Ethereum),

Rust, Go, C++
● Blockchain Platforms: Ethereum, Hyperledger
Fabric, Corda
● Development Frameworks: Truffle, Hardhat, Remix
● Cloud Platforms: AWS, Azure, Google Cloud
● Databases: IPFS, Arweave
● Wallets: MetaMask, Trust Wallet
● Explorers: Etherscan, Blockchair
USECASE OF BLOCKCHAIN
IBM FOOD TRUST
THANK YOU !