Introducing
Your new presentation assistant.
Refine, enhance, and tailor your content, source relevant images, and edit visuals quicker than ever before.
Trending searches
practice blockchain
2
COMPANY
LOGO
// BRAND
SYSTEMS
Smart Contracts
A smart contract is essentially a computer code on top of a blockchain that adds layers of information onto digital transactions beinging executed.
Within these layers are a set of rules under which the parties to that smart contract agree to interact with eachother. If and when the pre-defined rules are met, the agreement is allowed to be enforced.
Smart contracts are used widely in exchanging money, property, stock shares, payouts, or essentially anything of value. Smart contracts allow these exchanges to be performed transparantly, free of conflict, and without the additional help of third party resources.
Smart Contracts I
Smart Contracts I
There are 4 key benefits derived from the use of smart contracts:
Speed & Accuracy
Trust
Savings
Security
- Digital & Automated
- No Paperwork
- No Processing
- No Errors
- No Middle-man
- No 3rd Party Resources
- No Additoinal Verification
- Encrypted Records
- Shared Ledger
- Cannot be Altered
- Cannot be Lost
- Predetermined Rules
- Autonomy
- Encrypted Transactions
- Difficult to Hack
- Alterations affect Entire Chain
Smart Contracts II
Smart Contracts II
Consensus
As defined by Merriam-Webster, Consensus is:
First, a general agreement. And second, group solidarity of belief or sentiment.
With Blockchain, the method by which consensus decision making is achieved, is called "consensus mechanism".
Consensus mechanisms are protocols that make sure all nodes on the blockchain are synchronized with eachother and unanimous about transaction legitimacy.
There are many different protocols used to reach consensus, but the two most popular algorithms are Proof of Work (PoW) and Proof of Stake (PoS).
Proof of Work (PoW)
Proof of Work (PoW) Consensus Algorithm
- Perhaps the most common and best-known consensus algorithm
- Used by the most popular cryptocurrency networks like Bitcoin and Litecoin
- Also referred to as "mining", wherein the nodes are known as "miners"
- When a transaction is initiated, "miners" get to work on solving a cryptographic puzzle
- A reward is given to the first miner who solves each blocks problem
- Miners compete to be the first to find a solution to the mathematical problem
Proof of Stake (PoS)
Proof of Stake (PoS) Consensus Algorithm
- Also very common, evolved as a low-cost, low-energy consuming alternative to the PoW algorithm
- Randomized process to determine who gets to produce the next block, dependent on its wealth/holdings (stake)
- The more coins a node carries, the more possibilities it has of being chosen to refresh the ledger
Structure of Blockchain
Blockchains essentially create trust in digital data. Any information written to a blockchain database is almost impossible to manipulate.
The structure of a block within a blockchain can essentially be broken down into two core parts, the header (containing the hash algorithm) and the list of transactions.
Hashing is the key component in maintaining the reliability of a Blockchain
Header
The header contains the metadata and includes information on the data stored within the header.
Data fields included within the header are:
Index
The position of the block on the blockchain. The first block of every chain is indexed as “0” , the next “1”, and so on.
Hash
The result of the parent’s hash algorithm to the components of the block, enabling prompt identification of the data in the data-set.
The hash that links or chains a block to its predecessor.
PreviousHash
The number of transactions within the block.
NumTX
UTC time-stamp of when the block was created.
Timestamp
The 32/64 bits integer used in the mining process.
Nonce
Hash I
Hash I
Every block within a blockchain is connected back to the preceding block in the chain and is recognized by a cryptographic hash algorithm, most commonly referred to as a “hash”.
A hash is a mathematical algorithm that maps data of arbitrary size to a bit string of a fixed size.
The cryptographic hash algorithm for a blockchain resides on the block header or “parent block”.
Every subsequent block contains the previous blocks hash as well as its own unique hash.
The sequence of hashes connecting each block are what make it a chain.
Block 1
Hash: 8Y6T3
Previous Hash: 00000
Block 2
Hash: 9R4W8
Previous Hash: 8Y6T3
Block 3
Hash: 2H6G7
Previous Hash: 9R4W8
The tiniest change to any data on these blocks will consequently invalidate its hash and the hashes of every single block that follows, alerting the network to these attempted changes.
Hash II
Hashes, Mining, & Merkle Trees
SHA256 Algorithm
SHA-256 (Secure Hash Algorithm)
Bitcoin's blockchain uses the SHA-256 "proof of work" hashing algorithm, wherein Bitcoin miners solve computationally difficult math problems in order to add blocks to a blockchain.
The cryptographic hash output is a long number acting as a digital fingerprint for any collection of data and (in Bitcoin) generates a 64 digit hexadecimal number that is impossible to reverse-engineer.
Mining
Mining
Bitcoin is backed by millions of computers across the world, known as "miners".
Miners compete to solve a complex computational math problem, also called a "proof of work" (as discussed in lecture 3), which will then generate a valid hash for the upcoming block.
Whoever finds it first, is permitted to add the block to the chain and receive a reward in the form of bitcoins.
Merkle Trees
Merkle Trees
Merkle trees are a fundamental part of the blockchain technology.
By definition, a Merkle tree is a structure that allows for efficient and secure verification of content within a large body of data, consequently vouching for the consistency and content of the data.
All transactional data within a Merkle tree is hashed together to create a single hash, or verifiable digital signature.
Merkle trees are used inside the blocks of a blockchain as representations of all transactions forming that block.
Effectively, the block’s contents can then be validated using a single string of fixed length, and there is no need to store all the transactions individually.
Open Source
One of the chief goals in using blockchain is to foster a safe and secure network, along with the associated data.
In order to reach this level of security and trust, the software that powers the network must be free and open source.
Open source software is collaboratively produced, shared freely, published transparently, and developed for the public as opposed to a single business or person.
When an open source application is developed, there is no single point of failure in the development process nor is there any sole entity that profits off it.
Just as there is no single company that powers the Bitcoin network, there is no one company that makes the software that keeps the network infrastructure of it either.
In any case, open source software is revolutionizing technology by enabling companies to speed development, reduce costs, increase innovation, and improve efficiency.
Open Source Blockchain Platforms
Blockchain software primarily involves three components: cryptography, distributed ledger, and decentralized systems.
Each of these components is implemented using software, and each of them can be either open source or proprietary. Blockchain software projects developed by the community are generally licensed under open source licenses.
Hyperledger and Corda are two of the most popular open source platforms within blockchain.
Hyperledger
Defined as “an open source collaborative effort created to advance cross-industry blockchain technologies”, and hosted by the Linux Foundation.
The Hyperledger model provides the option to organizations to build and run industry-specific blockchain apps, platforms, and hardware systems to support their own business transactions.
Corda
Corda was developed by R3 in 2015 and is an open source blockchain platform to record, manage and synchronise agreements and transfer value.
It allows you to build interoperable blockchain networks that transact directly, but in strict privacy.
Open Source Applications
Open Source Applications
**Possible applications of blockchain technology:
VotoSocial
VotoSocial is a crowd-sourcing system that was born during the 2013 government elections in Honduras and is an electronic voting platform based on blockchain technology. It is a secure, open source, open data e-voting and vote counting platform
Follow My Vote
Follow My Vote develops open source end-to-end verifiable blockchain voting software for use in government-sponsored elections worldwide.
Software Parts Ledger
Built on the HyperLedger platform, Software Parts Ledger establishes trust between a manufacturer and its suppliers by tracking suppliers, their software parts, the open source used, and the corresponding compliance artifacts
Follow My Vote
Open Source Cryptocurrency
Open source cyryptocurrency is all about making the design public and allowing everyone to take part in its development. What makes open source protocols in the cryptocurrency world unique is that users must all be in agreement about what protocols to follow.
Bitcoin itself is an open source platform, and a solution meant to work without a central repository or single administrator. Bitcoin transactions are transferred and saved using a distributed ledger on a shared network that is open, public and anonymous.
Besides Bitcoin, there are many other cryptocurrencies that run using open source protocols. Three of the most popular are Litecoin, Zcash and Monero.
Bitcoin
Unlike the Bitcoin application which is open, public and anonymous, blockchain for business is private, permissioned and running on smart contracts.
LiteCoin
Frequently compared to Bitcoin, Litecoin is a peer-to-peer cryptocurrency that enables instant payments to anyone in the world. Unlike Bitcoin, Litecoin mining requires exceptionally less computing power.
Zcash
Zcash is an open source, decentralized cryptocurrency and is aimed at using cryptography to provide enhanced privacy for its users compared to other cryptocurrencies such as Bitcoin
Monero
Monero is an open source cryptocurrency that is secure, private, and untraceable and uses a special kind of cryptography to ensure that all of its transactions remain 100% unlinkable and untraceable. However, Monero's ability to provide privacy, unlike Bitcoin, has led it to become the top cryptocurrency being used in the dark web.
Advantages & Disadvantages
Advantages
- The majority of developers are motivated primarily because they want to use the product they are making.
- Due to the open nature, redundancy can be avoided, and troublesome, complicated, or redundant code can be identified and simplified.
- Projects are not dedicated solely to one developer and fresh minds can appear to offer different perspectives.
Disadvantages
- Can be seen as a form of governence; wherein users are expected to run whichever specific version of the code contains a function or approach they think the whole network should embrace.
Cryptocurrency Mining
Cryptocurrency Mining
Mining is validating transactions initiated in the cryptocurrency network within a timeframe, updating and adding new blocks on the blockchain. Those who mine are called miners. Simply put, mining is a bookkeeping process where miners are the bookkeepers and blockchain is the ledger.
Cryptocurrency Mining
When you make a debit or credit card purchase online, such as from Amazon, that digital payment is backed by its respective central authority such as Mastercard or Visa. In addition to recording that transaction in its history, the central authority also verifies the transaction is not fraudulent.
With cryptocurrency, there is no regulation by a central authority. Instead, it is backed by millions of computers around the world called miners. Miners provide the same services as the central authority but because they are spread out across the world, they record transaction data in a public list that can be accessed by absolutely anybody, making the transactions completely transparent.
Cryptocurrency Mining I
Cryptocurrency mining essentially serves two important purposes; adding transactions to the blockchain by confirming its validity and releasing new currency.
Cryptocurrency Mining II
Mining Cryptocurrency II
Miners are participants in certain cryptocurrency networks who play an important role in securing and extending the blockchain.
Cryptocurrency Mining III
Mining Cryptocurrency III
Mining requires a computer with special software, running 24 hours a day, to compete with peers around the world in solving complicated mathematical problems. The first computer, or group of computers, to solve the problem earns a fixed amount of cryptocurrency.
The speed at which a computer can complete these mathematical problems is called the “hashrate”. Consequently, the higher the “hashrate, the better chance miners have of finding the next “block” and therefore gaining reward.
While mining originally only appealed to cryptography enthusiasts, its increase in popularity and value has led it to become a lucrative business.
Cloud mining enables users to purchase mining capacity of hardware in remote data centers, relieving them of managing any hardware, software, electricity, bandwidth, etc.
Bitcoin Mining
Created in 2009, Bitcoin was the first decentralized cryptocurrency and is arguably the most popular and profitable. At a value-per-coin level, Bitcoin is worth far more than any other cryptocurrency in existence.
Bitcoin Mining I
Bitcoin mining is intentionally designed to be resource-intensive and difficult so that the number of blocks found each day by miners remains steady. The proof of work method then ensures that the creation of the information within the blocks found and added was complex, costly and time-consuming.
Mining is the only way to release new cryptocurrency into circulation. In other words, without miners Bitcoin currency would still exist and be usable, however there would never be any additional Bitcoin currency created.
Miners effectively keep the network running and increase the coin's global supply.
Bitcoin Mining II
Bitcoin Blocks and Confirmations
Mining Pools
A mining pool is a group of miners who combine their computing power and split the mined cryptocurrency between participants. With the advancement of “mining pools”, even the newest and best computer is rarely enough to compete alone.
Mining Pools I
Mining pools are a very simple concept. If you've ever pooled your money together with other people to play the lottery and split any winnings, then you have a basic understanding as to how mining pools work.
Much like the lottery pool where the combined investments are pooled, with mining pools, processing power and computer resources are pooled.
If you were to mine by yourself, it might take you weeks or months to earn a reward for a successfully mined block. If you join a mining pool, you can start making those returns much faster, however you will only get a fraction of the reward you’d receive if you were mining by yourself.
It’s really a game of probability; get large and infrequent rewards or lesser valued rewards more frequently.
Mining Pools II
There are about 20 major mining pools.
These are among Bitcoin's largest mining pools, broken down by the percent of hash power controlled by each pool.
Mining Pools II
Mining Pools III
A Glimpse Inside of a Bitcoin Mine
Advantages & Disadvantages of Mining
Advantages & Disadvantages
With all the excitement and advantages in the development of Blockchain and Bitcoin, it is important to note that there is a level of uncertainty within everything cryptocurrency related. However, cryptocurrency mining is arguably the most volatile.
Advantages
Advantages
Of Cryptocurrency Mining
*Mining serves to protect the network and is Easy to do
*Miners are essentially "gatekeepers", helping to keep the blockchain running smoothly by providing efficiency, auditability, traceability, transparancy, and security with no human efforts required.
*Mining is Easy to do
*Does not require any special expertise or knowledge.
*Mining Allows for the Democratization of Data
*Control over user data given to the users themselves.
*Mining Creates a Positive Social Impact
*Encourages positive social engineering in the digital space.
*Mining Offers a New Way of Earning Money
*Miners get paid for their work as auditors, securing and verifying transactions.
*Being a miner can give you “Voting” Power
*Have a say when changes are proposed in the cryptocurrency protocols.
Disadvantages
Disadvantages
Of Cryptocurrency Mining
*Mining has become Extremely Challenging
*Current day proves it futile to mine cryptocurrency using your computer, or even your graphics card.
*Mining has become Extremely Expensive
*Requires a dedicated machine, and need to account for storage, security, electricity and internet costs.
*Value can Fluctuate while Mining
*Cryptocurrency can deflate in value and remain unstable dependent on volatility with the system itself or general exchange markets.
*Mining takes alot of Time
*Can take hours or days to mine cryptocurrency
*Mining can make you Vulnerable
*Miners are required to communicate with other computers across the globe, making them susceptible to malware and hacker attacks.
Advantages & Disadvantages Video References
Advantages & Disadvantages Video References
Of Cryptocurrency Mining
Origin of Bitcoin
The concept of anonymous digital money based on asymmetric cryptosystems has been known since 1977.
Bitcoin is based on the idea of a more sophisticated cryptographic currency that is not controlled by any single entity, like a central bank. This has led the US treasury to call bitcoin a decentralized currency.
The bitcoin system is designed so that the difficulty of uncovering a block can be increased or decreased. This keeps the output of the currency more consistent. However, the model is limited and only 21 million units will ever be created. This limit will be reached in 0140.
Bitcoin has been criticized for its use in illegal transactions, its high electricity consumption, price volatility, and thefts from exchanges.
2007-2018
According to legend, Satoshi Nakamoto began working on the Bitcoin concept in 2007.
While he is on record as living in Japan, it is speculated that Nakamoto may be a collective pseudonym for more than one person.
To this day, the true identity of Nakamoto is uncertain.
Nevertheless, the concept of bitcoin was proposed in a white paper by a person or group of people called Satoshi Nakamoto in 2008.
2008
August 15th Although denying any connection to Satoshi Nakamoto, three individuals (Neal Kin, Vladimir Oksman and Charles Bry) file an application for an encryption patent application.
August 18th The Bitcoin.org domain was anonymously registered as a domain.
October 31st Satoshi Nakamoto published and released a whitepaper through a cryptography mailing list. This infamous whitepaper explains the Bitcoin currency and how it works.
The bitcoin project was registered on SourceForge.net on November 9, 2008. Sourceforge.net is a community collaboration website which focuses on the development and distribution of open source software.
2009
January 3rd The Bitcoin network was launched with the so-called genesis block. The Genesis block is the very first block, block 0, and contains a reference to the media business by employees of the Central Bank of Britain. At that time, Bitcoins had no quantifiable value in other currencies.
January 9th The very first version of Bitcoin, Version 0.1 is released. The release includes a Bitcoin generation system that would create a total of 21 million Bitcoins, lasting through the year 2040.
January 12th The very first transaction of Bitcoin currency is placed between Satoshi Nakamoto and Hal Finney, a developer and cryptographic activist.
October 5th The Bitcoin exchange rate is officially established, with the value of Bitcoin at US $1 = 1,309.03 BTC (bitcoin).
2010
February 6th “Bitcoin Market” is established as the first Bitcoin currency exchange to begin trading.
February 18th The encryption patent application filed by Kin, Oksman and Charles, was published.
May 22nd The first real-world transaction using Bitcoins takes place, with the purchase of two pizzas for 10,000 BTC by Florida programmer Laszlo Hanyecz. At that time, the exchange rate put the cost of the pizza around US $25.
July 12th In just five days’ time, the exchange value of Bitcoin increases ten times with the release of Version 0.3 and subsequent mention on Slashdot, a popular news source for anything technology related.
July 17th MtGox Bitcoin currency exchange market is established.
August 15th A vulnerability in the Bitcoin system is discovered and exploited, resulting in the generation of 184 Bitcoins.
November 6th The Bitcoin economy exceeds 1 million USD.
2011
January 28th 25% of total Bitcoins (5.25 million) is reached with the generation of block 105000.
February 9th Bitcoin an the US dollar are of equal value for the first time.
April 1st An online market is created named Silk Road, an illicit Bitcoin marketplace for drug deals.
June - July The virtual currency is exposed as being just as vulnerable as the paper kind, when multiple Bitcoin accounts were subject to hacking and theft.
August 20th The first Bitcoin Conference and World Expo was held in New York City, New York.
November 25th The first Bitcoin & Future Technology European Conference is held in Prague, Czech Republic.
2012-2013
As the use of Bitcoin currency grows throughout 2012, its largely relegated to corners of the internet, including black markets that sell illegal goods.
In 2013, Bitcoin suffers a price crash, quickly dropping the value of 1 Bitcoin to $300 from the staggering $1000 value it was just before.
April After a price surge that began in January, the collection value of all bitcoins passes $1 billion US dollars. However, the main use of the currency appears to be illicit activity such as drug dealings and online gambling sites that use bitcoins. The anonymous online marketplace Silk Road, which accepts only bitcoins, is overwhelmingly used as a market for controlled substances and narcotics.
October FBI agents arrest Ross Ulbricht, the man believed to be behind the Silk Road marketplace, on narcotics and money-laundering charges. Silk Road is believed to have been responsible for almost half of the transactions involving bitcoins.
October The first bitcoin atm is installed in a trendy coffee shop in Vancouver Canada. With the ATM, users scan their hand to confirm identity, and then funds move to or from a virtual wallet on their smartphone. The system limits transfers to $1000 a day, in an effort to curb money-laundering and other fraud.
November The price of bitcoin reached previous all-time high of 1124.76 on November 29th, up from just 13.36 on January 5th at the start of the year. Bitcoin now officially moves more money than Western Union.
December 96,000 Bitcoins are stolen from online drug site “Sheep Marketplace”, becoming the largest Bitcoin heist in history.
2014-2018
2014-2018 mostly saw Bitcoin value rising and falling with a few key points.
2014 brought some of worst scams and theft in Bitcoins history, losing upwards of $450 million dollars when the worlds largest Bitcoin exchange, MtGox goes offline, and the owners of 850,00 Bitcoins (valued at $450 million dollars) never see them again.
The arrival of the Ethereum platform in 2016 threatens to steal Bitcoin's thunder.
2017 proved to be a busy year, with a skyrocket in value to a whopping $19,666., an all-time high, albeit short lived.
Because of the staggering high 2017 brought to Bitcoin's value, it was assumed by many that 2018 would be a great year. Unfortunately, the value only descended through the year with Bitcoin suffering a 67% loss.
2019 Predictions
After the rise and fall of value in 2018, it's hard to tell just yet what 2019 will bring. Due to Bitcoin's decreasing supply, many experts believe the demand will greatly increase, possibly to record-breaking marks.
It should also be noted that many reputable banks stood up cryptocurrency departments in 2018, positioning themselves to accommodate and legitimize alternative investments.
Bitcoin Growth
BTC / USD Exchange Rate
As of 29 January 2019:
1 Bitcoin = £2,582.50
1 Bitcoin = $3,397.02
Dark Markets
The dark market, also known as the black market, dark net, or dark web, has become the shady area within the internet, where illicit goods are trafficked.
Because of the the dark web’s almost total anonymity, it has been the place of choice for groups wanting to stay hidden online from governments and law enforcement agencies, and most frequently used by pedophile groups, terrorists and criminals to keep their activities secret.
Here is a breakdown of how the dark web works.
Dark Markets Currency
In a study released by data firm Chainalysis, Bitcoin use on the dark markets rose to an astonishing average of $2 million a day in 2018, doubling what it was at the beginning of the year.
Bitcoin has grown to become a very popular form of cryptocurrency within these dark markets due to it's acceptance and own relative anonymity, however many other forms of cryptocurrency are used as well.
Dark Markets Currency I
These are a few of the most popular cryptocurrencies used within the Dark Markets
Dark Markets Currency I
Bitcoin
Bitcoin is essentially the cryptocurrency that founded the dark markets and remains one of the most stable to this day. However, its presence in the dark web has been drastically decreasing in activity. Many people believe the recent decrease can be attributed to Bitcoin’s increase in price and decelerated transactional capabilities. Being that most criminals are looking for the fastest available option, Bitcoin is becoming less popular in the dark markets.
Litecoin
First introduced in 2011, Litecoin is also rapidly growing in popularity due to it’s speedy nature. While its core technology is nearly identical to Bitcoin’s, Litecoin’s code increases transaction speeds, consequently lowering transaction fees and generating a larger number of coins for miners.
Dark Markets Currency II
These are a few of the most popular cryptocurrencies used within the Dark Markets
Dark Markets Currency II
Dash
Dash is the 12th biggest cryptocurrency and is accepted by 20% of the dark web markets. Created in 2014, Dash is built upon Bitcoin’s core code but with better features such as privacy and rapid transactions. Like Bitcoin, Dash is open-source and has its own blockchain, wallet infrastructure, and community yet with a much more negligible transaction fee.
Monero
First introduced in 2011, Litecoin is also rapidly growing in popularity due to it’s speedy nature. While its core technology is nearly identical to Bitcoin’s, Litecoin’s code increases transaction speeds, consequently lowering transaction fees and generating a larger number of coins for miners.
Dark Markets I
Dark Markets
“Darknet market activity has been remarkably resilient over the last few years, despite continued efforts by law enforcement to shut down illicit activities. When one darknet market closes, others pop up to take its place.”
~Chainalysis
Dark Markets of Today
Of the thousands of dark markets in operation today, these are a few of the most popular
Dark Markets of Today
Dream Market
Year Established: 2013
Products: drugs, counterfeits, digital goods, etc
Dream Market is one of the oldest standing and most popular dark markets. With over 133,665 individual products on their market site, it is one of the most product rich dark markets in the industry.
WallStreet Market
Year Established: 2016
Products: primarily drugs
A close second to Dream Market, WallStreet Market is one of the most modern, innovative and up to date markets on the dark web.
Point / Tochka Market
Year Established: 2015
Products: drugs, concert tickets, counterfeit, etc
Point Market, rebranded from it’s previous name Tochka Market, has been steadily building its reputation, mostly due to the fact it is open-source and available in over 8 languages.
Dark Markets of Yesterday
Of the thousands of dark markets that have been shut down, these are a few of the most popular
Dark Markets of Yesterday
Silk Road Market
Year Established: 2011
Products: drugs, guns, porn, counterfeits, hitmen, hackers
Silk Road was one of the first and most legendary dark markets to enter the scene with nearly a million customers and over $1.2 billion in sales. Federal agents were finally able to catch up with the alleged operator Ross Ulbricht in 2013, charging him with money laundering, computer hacking, conspiracy to traffic narcotics, and conspiracy to murder.
AlphaBay Market
Year Established: 2014
Products: drugs, weapons, illegal services
AlphaBay Markets was one of the best in the game, with over 230,000 users at one point. Unfortunately, scammers operating on their market became their downfall and they were seized by law enforcement in July 2017. Before being taken down it was reportedly averaging $700,000 US dollars in sales daily.
Nucleus Market
Year Established: 2014
Products: predominantly drugs
Nucleus Market was once one of the top 3 largest dark markets in terms of the amount of products it had listed. Unfortunately the sites admins were just as shady as their market, and in 2016 Nucleus performed an Exit Scam, taking everyone’s bitcoins along with them.
DLT
(Distributed Ledger Technology)
Distributed Layer Technology
Distributed Ledger Technology, DLT for short, is an umbrella term used to describe technologies which distribute records or information and isn’t stored or established by any one central body.
DLT Technologies are the foundation of which all Blockchain platforms, both private and public, are built on.
Distributed Ledger Technology I
Distributed ledgers offer a range of benefits to government and to other public and private sector organizations. As their name implies, they can be distributed extremely widely in a precisely controlled fashion. They are highly efficient because changes by any participant with the necessary permission to modify the ledger are immediately reflected in all copies of the ledger. They can be equally robust in rejecting unauthorized changes, so corrupting the ledger is extremely difficult.
Blockchain, which bundles transactions into blocks that are chained together, and then broadcasts them to the nodes in the network, is probably the best-known instance of Distributed Ledger Technologies (DLT).
Private institutions, such as banks, are seeing the benefits in using the core idea of blockchain as a distributed ledger technology (DLT), in order to create a permissioned and private blockchain.
Distributed Ledger Technology II
Distributed ledgers use independent computers (referred to as nodes) to record, share and synchronize transactions in their respective electronic ledgers (instead of keeping data centralized as in a traditional ledger). Blockchain organizes that data into blocks, which are then chained together in an append only mode.
Distributed Ledger Technology III
The distributed ledger is one of the key features of cryptocurrency. With distributed ledgers, there are never any delays (holiday's, etc) or additional fees when conducting transactions.
Public, Private & Consortium Blockchains
Private, Public & Consortium
When it comes to accessing and managing permissions, blockchain is divided in to three categories, public blockchain, private blockchain, and consortium blockchains.
Unlike a public blockchain, A private or consortium blockchain platform will allow businesses to retain control and privacy while still cutting down their costs and transaction speeds.
Public Blockchains
A Public Blockchain is permissionless, whereas anyone can join the blockchain network. Participants can read, write, or contribute within a public blockchain network because there is no one person or organization with complete control.
Public blockchains can receive and send transactions from anybody in the world and can be audited by anybody.
Every node has as much transmission power as any other and before a transaction is considered valid, it must be authorized by each of its essential nodes via the chain’s consensus process. As long as each node abides by the specific stipulations of the protocol, their transactions can be validated, and thus added to the chain.
Public blockchains are the best option with respect to decentralization.... The main reason to use blockchains!
Public Blockchain Platforms
Bitcoin, Dash, Litecoin:
Digital currency medium for exchange
Lisk:
Public blockchain platform that allows users to develop decentralized blockchain apps
Factom:
Distributed, decentralized protocol running on top of Bitcoin
Ethereum:
Smart contracting platform that lets anyone build and use decentralized applications that run on blockchain technology
Private Blockchains
In private blockchains, the owner of the blockchain is a single entity or an enterprise which can override/delete commands on a blockchain if needed. Private blockchains allow different levels of permissions for users, so access can be restricted, and information can be encrypted to protect confidentiality.
If you want to control who can write and read data to a blockchain, the first step is identity. You mush first establish who is part of the blockchain network and ensure one can’t read/write or audit the blockchain anytime unless they have the permission to do so.
The sole distinction between public and private blockchain is related to who has permission to participate in the network, execute the consensus protocol and maintain the shared ledger. With a private blockchain, one needs special privileges and access in order to make any changes.
Private Blockchains
Organizations are more likely to join a private blockchain because it allows invited users to transact without making data public.
Private Blockchains
Individual concepts require usage of a proprietary blockchain, which may be private or permissionless. Privacy seems to be the preferred method of choice right now, as involved parties want to retain a sense of control over this technology.
Private Blockchain Platforms
Hyperledger Fabric:
Open-source collaborative effort to advance cross-industry blockchain technology
R3 Corda:
Distributed ledger platform for financial services
Multichain:
Private blockchain solution designed for financial services
Blockstack:
Decentralized naming and Storage system
Private Blockchain - Corda
Private Blockchain
- Corda
Corda is an open source blockchain project, designed for business, allowing users to build interoperable blockchain networks that transact in strict privacy
Consortium Blockchains
A consortium blockchain is partly private, where it has many of the same advantages of a private blockchain, but operate under the leadership of a group instead of a single entity. thus, not just anyone with an internet connection could gain access.
It is controlled by a group of members and has a pre-defined set of nodes, where only the users with access can write the data or block.
With a consortium blockchain, the consensus process is likely to differ to that of a public blockchain. Instead of anyone being able to partake in the procedure, consensus participants of a consortium blockchain are likely to be a group of pre-approved nodes on the network. Thus, consortium blockchains possess the security features that are integral in public blockchains, while also allowing for a greater degree of control over the network.
Consortium Blockchains
A consortium platform provides many of the same benefits affiliated with private blockchain — efficiency and transaction privacy, for example — without consolidating power with only one company.
Consortium Blockchain Platforms
Ripple:
Enterprise Blockchain Solution for Global Payments
R3 Quorum:
Enterprise-focused Version of Etheruem
Hyperledger:
Multi-project open source collaborative effort to advance cross-industry blockchain technology
EWF (Energy Web Foundation):
Largest consortium in the energy blockchain space
Advantages & Disadvantages
Public and private blockchains have many similarities.
- Both are decentralized peer-to-peer networks, where each participant maintains a replica of a shared append-only ledger of digitally signed transactions.
- Both maintain the replicas in sync through a protocol referred to as consensus.
- Both provide certain guarantees on the immutability of the ledger, even when some participants are faulty or malicious.
Consequently, each have their own unique advantages and disadvantages also.
Advantages
Each type has its own set of benefits which is why it is important to analyze them and use the best one for our business.
Public
Public Platform Advantages
- Self sustaining, flexible decentralized economy
- Most talented developers in the world collectively improve the system
- Incentivised validation means more miners making it more secure and less likely to be hacked
- Protects the users of an application from the developers
- No third-party verification necessary
Private
Private Platform Advantages
- Faster and more efficent than public blockchain
- Full internal control making validation mechanisms more secure and trustworthy
- Known validators lower risk of getting attacked
- Fewer nodes means cheaper transactions
- Provides a great level of privacy
Consortium
Consortium Platform Advantages
- Reduced transaction costs and data redundancies
- Simplified document handling and elimination of semi manual compliance mechanisms
- Incentivised validation means more miners making it more secure and less likely to be hacked
- Provides multiple defaults and distributed nodes for the process.
Disadvantages
Each type has its own set of benefits which is why it is important to analyze them and use the best one for our business.
Public
Public Platform Disadvantages
- High amount of transactions means slower and potentially easier to figure out private keys
- Expensive cost per transaction
- Time and electricity required to process transactions is more intensive
- Little to no privacy for transactions and only supports a weak notion of security.
- Limited scalability
Private
Private Platform Disadvantages
- Fewer developers, improvements are slow and the system is less resilient
- Fewer validators, not self sustaining, not 24/7, and not flexible
- Not a long term solution
- Centralized and less secure
- Subject to regulations and censorship
Consortium
Consortium Platform Disadvantages
- Requires massive computing power to achieve consensus
- System transparancy concerns
- Security concerns
- Developers and proprietors have less control
Ultimately, a more public consortium chain will bear the burdens of public chains, while a more private one might suffer from the relative lack of openness and disintermediation.
Characteristics
Popular Blockchain Platforms
Popular Platforms
When it comes to accessing and managing permissions, blockchain is divided in to three categories, public blockchain, private blockchain, and consortium blockchains.
Unlike a public blockchain, A private or consortium blockchain platform will allow businesses to retain control and privacy while still cutting down their costs and transaction speeds.
Public Blockchains
A Public Blockchain is permissionless, whereas anyone can join the blockchain network. Participants can read, write, or contribute within a public blockchain network because there is no one person or organization with complete control.
Public blockchains can receive and send transactions from anybody in the world and can be audited by anybody.
Every node has as much transmission power as any other and before a transaction is considered valid, it must be authorized by each of its essential nodes via the chain’s consensus process. As long as each node abides by the specific stipulations of the protocol, their transactions can be validated, and thus added to the chain.
Public blockchains are the best option with respect to decentralization.... The main reason to use blockchains!
Open Source
One of the chief goals in using blockchain is to foster a safe and secure network, along with the associated data.
In order to reach this level of security and trust, the software that powers the network must be free and open source.
Open source software is collaboratively produced, shared freely, published transparently, and developed for the public as opposed to a single business or person.
When an open source application is developed, there is no single point of failure in the development process nor is there any sole entity that profits off it.
Just as there is no single company that powers the Bitcoin network, there is no one company that makes the software that keeps the network infrastructure of it either.
In any case, open source software is revolutionizing technology by enabling companies to speed development, reduce costs, increase innovation, and improve efficiency.
Open Source Blockchain Platforms
Blockchain software primarily involves three components: cryptography, distributed ledger, and decentralized systems.
Each of these components is implemented using software, and each of them can be either open source or proprietary. Blockchain software projects developed by the community are generally licensed under open source licenses.
Hyperledger and Corda are two of the most popular open source platforms within blockchain.
Hyperledger
Defined as “an open source collaborative effort created to advance cross-industry blockchain technologies”, and hosted by the Linux Foundation.
The Hyperledger model provides the option to organizations to build and run industry-specific blockchain apps, platforms, and hardware systems to support their own business transactions.
Corda
Corda was developed by R3 in 2015 and is an open source blockchain platform to record, manage and synchronise agreements and transfer value.
It allows you to build interoperable blockchain networks that transact directly, but in strict privacy.
Open Source Applications
Open Source Applications
**Possible applications of blockchain technology:
VotoSocial
VotoSocial is a crowd-sourcing system that was born during the 2013 government elections in Honduras and is an electronic voting platform based on blockchain technology. It is a secure, open source, open data e-voting and vote counting platform
Follow My Vote
Follow My Vote develops open source end-to-end verifiable blockchain voting software for use in government-sponsored elections worldwide.
Software Parts Ledger
Built on the HyperLedger platform, Software Parts Ledger establishes trust between a manufacturer and its suppliers by tracking suppliers, their software parts, the open source used, and the corresponding compliance artifacts
Follow My Vote
Open Source Cryptocurrency
Open source cyryptocurrency is all about making the design public and allowing everyone to take part in its development. What makes open source protocols in the cryptocurrency world unique is that users must all be in agreement about what protocols to follow.
Bitcoin itself is an open source platform, and a solution meant to work without a central repository or single administrator. Bitcoin transactions are transferred and saved using a distributed ledger on a shared network that is open, public and anonymous.
Besides Bitcoin, there are many other cryptocurrencies that run using open source protocols. Three of the most popular are Litecoin, Zcash and Monero.
Bitcoin
Unlike the Bitcoin application which is open, public and anonymous, blockchain for business is private, permissioned and running on smart contracts.
LiteCoin
Frequently compared to Bitcoin, Litecoin is a peer-to-peer cryptocurrency that enables instant payments to anyone in the world. Unlike Bitcoin, Litecoin mining requires exceptionally less computing power.
Zcash
Zcash is an open source, decentralized cryptocurrency and is aimed at using cryptography to provide enhanced privacy for its users compared to other cryptocurrencies such as Bitcoin
Monero
Monero is an open source cryptocurrency that is secure, private, and untraceable and uses a special kind of cryptography to ensure that all of its transactions remain 100% unlinkable and untraceable. However, Monero's ability to provide privacy, unlike Bitcoin, has led it to become the top cryptocurrency being used in the dark web.
Advantages & Disadvantages
Advantages
- The majority of developers are motivated primarily because they want to use the product they are making.
- Due to the open nature, redundancy can be avoided, and troublesome, complicated, or redundant code can be identified and simplified.
- Projects are not dedicated solely to one developer and fresh minds can appear to offer different perspectives.
Disadvantages
- Can be seen as a form of governence; wherein users are expected to run whichever specific version of the code contains a function or approach they think the whole network should embrace.
Public Blockchain Platforms
Bitcoin, Dash, Litecoin:
Digital currency medium for exchange
Lisk:
Public blockchain platform that allows users to develop decentralized blockchain apps
Factom:
Distributed, decentralized protocol running on top of Bitcoin
Ethereum:
Smart contracting platform that lets anyone build and use decentralized applications that run on blockchain technology
Private Blockchains
In private blockchains, the owner of the blockchain is a single entity or an enterprise which can override/delete commands on a blockchain if needed. Private blockchains allow different levels of permissions for users, so access can be restricted, and information can be encrypted to protect confidentiality.
If you want to control who can write and read data to a blockchain, the first step is identity. You mush first establish who is part of the blockchain network and ensure one can’t read/write or audit the blockchain anytime unless they have the permission to do so.
The sole distinction between public and private blockchain is related to who has permission to participate in the network, execute the consensus protocol and maintain the shared ledger. With a private blockchain, one needs special privileges and access in order to make any changes.
Private Blockchains
Organizations are more likely to join a private blockchain because it allows invited users to transact without making data public.
Private Blockchains
Individual concepts require usage of a proprietary blockchain, which may be private or permissionless. Privacy seems to be the preferred method of choice right now, as involved parties want to retain a sense of control over this technology.
Private Blockchain Platforms
Hyperledger Fabric:
Open-source collaborative effort to advance cross-industry blockchain technology
R3 Corda:
Distributed ledger platform for financial services
Multichain:
Private blockchain solution designed for financial services
Blockstack:
Decentralized naming and Storage system
Private Blockchain - Corda
Private Blockchain
- Corda
Corda is an open source blockchain project, designed for business, allowing users to build interoperable blockchain networks that transact in strict privacy
Consortium Blockchains
A consortium blockchain is partly private, where it has many of the same advantages of a private blockchain, but operate under the leadership of a group instead of a single entity. thus, not just anyone with an internet connection could gain access.
It is controlled by a group of members and has a pre-defined set of nodes, where only the users with access can write the data or block.
With a consortium blockchain, the consensus process is likely to differ to that of a public blockchain. Instead of anyone being able to partake in the procedure, consensus participants of a consortium blockchain are likely to be a group of pre-approved nodes on the network. Thus, consortium blockchains possess the security features that are integral in public blockchains, while also allowing for a greater degree of control over the network.
Consortium Blockchains
A consortium platform provides many of the same benefits affiliated with private blockchain — efficiency and transaction privacy, for example — without consolidating power with only one company.
Consortium Blockchain Platforms
Ripple:
Enterprise Blockchain Solution for Global Payments
R3 Quorum:
Enterprise-focused Version of Etheruem
Hyperledger:
Multi-project open source collaborative effort to advance cross-industry blockchain technology
EWF (Energy Web Foundation):
Largest consortium in the energy blockchain space
Advantages & Disadvantages
Public and private blockchains have many similarities.
- Both are decentralized peer-to-peer networks, where each participant maintains a replica of a shared append-only ledger of digitally signed transactions.
- Both maintain the replicas in sync through a protocol referred to as consensus.
- Both provide certain guarantees on the immutability of the ledger, even when some participants are faulty or malicious.
Consequently, each have their own unique advantages and disadvantages also.
Advantages
Each type has its own set of benefits which is why it is important to analyze them and use the best one for our business.
Public
Public Platform Advantages
- Self sustaining, flexible decentralized economy
- Most talented developers in the world collectively improve the system
- Incentivised validation means more miners making it more secure and less likely to be hacked
- Protects the users of an application from the developers
- No third-party verification necessary
Private
Private Platform Advantages
- Faster and more efficent than public blockchain
- Full internal control making validation mechanisms more secure and trustworthy
- Known validators lower risk of getting attacked
- Fewer nodes means cheaper transactions
- Provides a great level of privacy
Consortium
Consortium Platform Advantages
- Reduced transaction costs and data redundancies
- Simplified document handling and elimination of semi manual compliance mechanisms
- Incentivised validation means more miners making it more secure and less likely to be hacked
- Provides multiple defaults and distributed nodes for the process.
Disadvantages
Each type has its own set of benefits which is why it is important to analyze them and use the best one for our business.
Public
Public Platform Disadvantages
- High amount of transactions means slower and potentially easier to figure out private keys
- Expensive cost per transaction
- Time and electricity required to process transactions is more intensive
- Little to no privacy for transactions and only supports a weak notion of security.
- Limited scalability
Private
Private Platform Disadvantages
- Fewer developers, improvements are slow and the system is less resilient
- Fewer validators, not self sustaining, not 24/7, and not flexible
- Not a long term solution
- Centralized and less secure
- Subject to regulations and censorship
Consortium
Consortium Platform Disadvantages
- Requires massive computing power to achieve consensus
- System transparancy concerns
- Security concerns
- Developers and proprietors have less control
Ultimately, a more public consortium chain will bear the burdens of public chains, while a more private one might suffer from the relative lack of openness and disintermediation.
Characteristics
Ethereum
Ethereum is an open-source & public blockchain based distributed computing platform for building decentralized applications.
Ethereum Platform
Bitcoin is only one of several hundred applications that can be used with Blockchain technology. Up until the creation of Ethereum, expanding on the design of those blockchain applications was very limited.
Bitcoin, among other cryptocurrencies, was designed exclusively to operate as peer to peer digital currencies however, this pre-Ethereum design caused many problems for developers when trying to expand on the functions offered by Bitcoin and other cryptocurrencies; proving to be extremely complicated and time consuming. Consequently, Ethereum's design brings the added value of supporting applications beyond that of just cryptocurrency.
Ethereum took the technology behind Bitcoin and substantially expanded its capabilities. It is a whole network, with its own Internet browser, coding language and payment system. Most importantly, it enables users to create decentralized applications on Ethereum’s Blockchain.
Those applications can either be entirely new ideas or decentralized reworks of already existing concepts
Ethereum Platform
At its simplest, Ethereum is an open software platform that enables developers to build and deploy decentralized applications.
Ethereum Cryptocurrency
Ethereum is one of the most popular cryptocurrencies in the world, only second to Bitcoin, and the Ethereum token is called Ether, also known as ETH. However Ether is not just a tradeable cryptocurrency, as it also powers the Ethereum network by paying for transaction fees and computational services.
Ethereum Price History
February 2019
Ethereum Price (ETH)
USD $103.04
GBP £79.32
Ethereum vs Bitcoin
Ethereum expands on Bitcoin by harnessing the blockchain capabilities for computer coding and providing a wide range of potential applications aside from cryptocurrency, such as voting, global supply chains, medical records, and financial operations.
Bitcoin
Ethereum
- Smart contracts development platform
- Holds more than just transactional information
- Block formation can take up to 12 seconds
- Different mining system geared towards users with consumer GPU's, encouraging independent miners and a more secure network
- Transfers take an average of three minutes
- Features Solidity programming languate which creates smart contracts
- Decentralized cryptocurrency exchange
- Data blocks hold only transactional information
- Block formation can take up to 10 minutes
- Mining requires specialized hardware and is rarely profitable for a single user without a large investment first
- Transfers can take over an hour due to limited block size
- Extremely limited scripting language
Ethereum vs Bitcoin
Ethereum vs Bitcoin
Cryptocurrency Ether could potentially prove more lucrative than Bitcoin. It's been flying in Bitcoin's shadow, but investors are taking notice of its powerful financial technology.
Ethereum Applications
Ethlance
A marketplace for Jobs
CryptoKitties
A game where users can buy, sell, and breed digital cats
Aragon
Platform to build and manage decentralized autonomous organizations
uPort
Identity management platform
Gnosis
Platform designed to work as a prediction market
Prism
Decentralized and trustless asset portfolio market by ShapeShift