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Building a Brave New World: The Science of Blockchains

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Abhiram Kothapalli

on 16 April 2017

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Transcript of Building a Brave New World: The Science of Blockchains

Building a Brave
New World

The Science of
Bitcoin

Let's start with
the simplest model.

So, What
is
Bitcoin
?
Bob
Alice
Ledger
Let's build
Bitcoin
from the ground up.

Alice:
+10
Bob:
-10
Does Bob have
enough funds?
Bob:
+3
Carol:
-3
Bob:
+51
Dave:
-51
Everything checks
out. I can commit.

Alice:
+10
Bob:
-10
Tx History
"Bob sent you
+10
"
But we can't trust
a single server.

Server
Bob:
+3
Carol:
-3
Bob:
+51
Dave:
-51
Alice:
+10
Bob:
-10
Tx History
Server
Bob:
+3
Carol:
-3
Bob:
+51
Dave:
-51
Alice:
+10
Bob:
-10
Tx History
Server
Bob:
+3
Carol:
-3
Bob:
+51
Dave:
-51
Alice:
+10
Bob:
-10
Tx History
Server
Bob:
+3
Carol:
-3
Bob:
+51
Dave:
-51
Alice:
+10
Bob:
-10
Tx History
Server
Bob:
+3
Carol:
-3
Bob:
+51
Dave:
-51
Alice:
+10
Bob:
-10
Tx History
Alice:
+10
Bob:
-10
Alice:
+10
Bob:
-10
Alice:
+10
Bob:
-10
Alice:
+10
Bob:
-10
Alice:
+10
Bob:
-10
What if a node crashes, shuts down, or sends garbage messages?
PBFT Primer
What if a Node wants to forge transactions?
Ethan:
+10
Bob:
-10
"Actually, Bob paid Ethan
+10.
"
NULL:
+infty
NULL:
-infty
But for true decentralization we should allow open participation.
What if a node performs a Sybil attack?
65.35.146.115
65.35.146.116
We can make participation expensive using Proof of Work.
George:
+10
Harry:
-10
Step 2: Add previous hash and nonce
Step 3: Solve hash puzzle
Nonce 8493: adb591795f9e904...
Nonce 8494: 13c1f37001c89b47...
Nonce 8495: 5cbf542d0e7efe34...
Step 4: Broadcast The solved block
Proof of Work enforces "one CPU, one vote"
Instead of a ledger, servers will keep track of a "Blockchain"
Block 2134
Solved by 71.100.73.227
Block 2135
Solved by 199.242.239.216
Block 2136
Solved by 250.198.30.111
P.O.W is not cheap. "Miners" solve block puzzles in exchange for
Bitcoin
Block 2137
Block 2138
Block 2137
Block 2138
Block 2139
What if there is a conflict?
Then nodes accept the longest chain
Bob
Alice
Alice:
-5
Carol:
+5
Alice:
-5
Bob:
+5
"Alice sent you
+10
"
Block 2137
Block 2138
Block 2139
How proof of work prevents double spending
Alice will fail, so long as she contains less than 50% of the hashpower
Private Key Demo

Bob:
+3
Carol:
-3
Bob:
+51
Dave:
-51
Step 1: Block pending transactions
65.35.146.114
65.35.146.117
65.35.146.118
65.35.146.119
156.60.227.251
156.60.227.252
156.60.227.253
90.202.25.197
Nonce 78293: 00000347cd2cb7b...
Previous block hash
Random value (nonce)
Latest Block
Full transcript