Blockchain Technology and Application

by Muhammad Usama Riaz

Motivation about the Course

● Barter System
● Market Cap of bitcoin is $385,910,990,270
● MetaVerse WEB 1.0, 2.0 3.0
● 40k monthly average starting internship salary for blockchain
developer
What we going to Learn in this course (Course Outline)
● Chapter 1: Blockchain Basics (4 weeks)
○ Blockchain Defined
■ Blockchain Defined: Bitcoin & Blockchain
■ Blockchain Structure (Transactions,Block, Merkle Tree)
■ Basic Operations
■ Beyond Bitcoin
○ Ethereum Blockchain
■ Ethereum Blockchain: Smart Contracts
■ Ethereum Structure
■ Ethereum Operations
■ Incentive Model
○ Algorithms & Techniques
■ Algorithms & Techniques: Public-Key Cryptography
■ Hashing
■ Transaction Integrity
■ Securing Blockchain
○ Trust Essentials
■ Trust Essentials: Decentralized Systems
■ Consensus Protocol
■ Robustness
■ Forks
What we going to Learn in this course (Course Outline)
● Chapter 2: Smart Contracts (6 weeks)
○ Smart Contract Basics
■ Smart Contract Basics: Why Smart Contracts?
■ Smart Contracts Defined (Part 1) (Remix IDE and Greeter Demos)
■ Smart Contracts Defined (Part 2) (Simple Storage Demo)
■ Processing Smart Contracts (Compile Artifacts Demo)
■ Deploying Smart Contracts
○ Solidity
■ Solidity: Structure
■ Basic Data Types & Statements (Bidder Data & Functions Demos)
■ Specific Data Types (Part 1) (Coin Demo)
■ Specific Data Types (Part 2) (Coin Demo cont.)
■ Data Structures (Part 1) (BallotV1 Demo)
■ Data Structures (Part 2) (StateTransV2 Demo)
■ Access Modifiers & Applications
○ Putting it all Together
■ Developing Smart Contracts
■ Time Elements (Part 1)
■ Time Elements (Part 2) (BallotV2 Demo)
■ Time Elements (Part 3)
■ Validation & Test (Part 1) (BallotV3 Demo)
■ Validation & Test (Part 2) (BallotV4 Demo)
■ Client Applications
○ Best Practices
■ Best Practices: Evaluating Smart Contracts
■ Designing Smart Contracts
■ Remix Web IDE
What we going to Learn in this course (Course Outline)
● Chapter 3: Decentralized Applications (Dapps) (2 weeks)
○ Week 11: Decentralized Applications (Dapps)
■ Decentralized Applications (Dapps): Blockchain Server
■ Dapp Defined
■ Ethereum APIs
○ Week 12: Truffle Development
■ Truffle Development: Truffle IDE (Part1)
■ Truffle IDE (Part 2) (Compile Demo)
■ Truffle IDE (Part 3) (Migration Demo)
■ Test-Driven Development (Part 1) (Test Demo)
■ Test-Driven Development (Part 2) (Negative Test Demo)
■ Web Interface & Testing (Part 1) (Front-End Demo)
■ Web Interface & Testing (Part 2) (Metamask Demo)
■ Web Interface & Testing (Part 3) (Metamask Demo Con't)
○ Week 13: Design Improvements
■ Design Improvements: Solidity Features (Part 1)
■ Design Improvements: Solidity Features (Part 2)
■ Event Handling (Part 1)
■ Event Handling (Part 2) (Coin Demo)
■ Oraclize
○ Week 14: Application Models & Standards
Blockchain Basics
by Muhammad Usama Riaz
Learning Objectives - Blockchain Basics

● We will introduce and define blockchain, explain the structure and

operational aspects of Bitcoin blockchain, and compare different types
of blockchains.
● Explain the fundamental characteristics that define a Blockchain using
Bitcoin Blockchain.
● Discuss the important features of Ethereum Blockchain that is used
as reference implementation in many newer Blockchains.
● Outline methods for realizing trust in the Blockchain.
What we going to learn today

○ Chapter 1: Week 1: Blockchain Defined

○ Blockchain Defined: Bitcoin & Blockchain
○ Blockchain Structure
○ Basic Operations
○ Beyond Bitcoin
A little about Blockchain

● What is a blockchain?
● Why should you care about it?
● Unlike traditional methods, blockchain enables peer to peer transfer of
digital assets without any intermediaries.
● It was a technology originally created to support the famous
cryptocurrency, Bitcoin.
● The blockchain is poised to innovate and transform a wide range of
applications
What is a blockchain?
Enabling Peer to Peer Transaction in a Decentralized network
Establishing Trust among unknown peers
Recording the transaction in an immutable distributed ledger.
Blockchain is a shared, immutable ledger that facilitates the process of
recording transactions and tracking assets in a business network.
An asset can be tangible (a house, car, cash, land) or intangible
(intellectual property, patents, copyrights, branding). Virtually anything of
value can be tracked and traded on a blockchain network, reducing risk
and cutting costs for all involved.
What is immutable distributed ledger.
● unchanging over time or unable to be changed.
● Immutable records:
● No participant can change or tamper with a transaction after it’s been recorded to
the shared ledger.
● If a transaction record includes an error, a new transaction must be added to
reverse the error, and both transactions are then visible.

● Distributed ledger technology: All network participants have access to the

distributed ledger and its immutable record of transactions.
● With this shared ledger, transactions are recorded only once,
● eliminating the duplication of effort that’s typical of traditional business networks.
Trust with no central authority,

● how did Bitcoin realize trust and security?

● By Implementing software programs for
● Validation
● Verification
● Proof of Consensus algorithm?
● a novel infrastructure called the blockchain.
● These innovations are significantly shaping the direction of Web 3.0
Bitcoin - First CryptoCurrency
● Bitcoin are a continuously working digital currency system,
● A model for autonomous decentralized application technology called the blockchain.
● We can all agree that the advent of the internet in the world wide web has transformed
every aspect of our lives,
● From stock markets Street corner food truck
● It has enabled a technology explosion with Web 2.0 and the world of e-commerce
applications
● Around 2008, 2009, when the institutions and markets we trusted went crumbling down,
● Everybody was running away from the Wall Street
● A mysterious person, or persons, called Satoshi Nakamoto,
● Introduced a new digital currency, a cryptocurrency called Bitcoin.
● Bitcoin enabled an innovative platform for peer to peer transfer of value without
any central authority.
Centralized VS Decentralized network

Server Client (WEB 2.0) Decentralized Network

Centralized versus Decentralized network
Credit Card Scenario

We have a credit card agency, we have a customer bank, we have a credit cards
bank, we have an exchange, we have the merchant's bank, and finally, the merchant.
This is an example of a centralized system that we are so used to.
Now compare this with a system where peers can transact directly with each other
irrespective of where they are located. Functions of the intermediaries are shifted to the
periphery to the peer participant in the blockchain infrastructure. Peers are not necessarily
known to each other. This is a decentralized system.
Lending Money Scenario
Types of Blockchain

● Public Blockchain.
● Private Blockchain.
● Hybrid Blockchain.
● Consortium Blockchain.
Blockchain Application Example

● Digital media transfer - sale of art.

● Remote services delivery, - ravel and tourism.
● Platform for decentralized business logic - moving computing to data
sources
● distributed intelligence - education credentialing.
● Distributed resources - power generation and distribution.
● Crowd funding - startup fund raising.
● Crowd operations, - electronic voting.
● Identity management, - one ID for all your life's functions.
● Government public records and open governing.
Blockchain Structure

● Transactions
○ https://www.blockchain.com/btc/tx/8caf009508a1e25594d302b4a9f88d5738e1652dfb4988379
17dbbe0ae5ca9a8
● Blocks
○ Many transactions forms a block
○ A block has its header with some params and body contains transactions
○ https://www.blockchain.com/btc/block/00000000000000000008a59805fc0a6d26b9f5c9c2f820
979cd12935b2daada5
● Blockchain
○ Many blocks connected with link forms a blockchain
Transaction
Block
Merkle Tree
Basic Operations

Following operations are Responsibility of the peer participants and their

respective computational nodes
● Validation of transactions
● Gathering transactions for a block
● Broadcasting the valid transactions & block
● Consensus on the next block creation
● Chaining the blocks to form an immutable record.
Two Major roles for the Participants

Participants that initiate

transfer of value by creating a
Miners
transaction