Intro into blockchain
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The document provides an introduction to blockchain technology, explaining its functioning, particularly through the example of Bitcoin transactions between two users, Peter and Mary. It discusses key components such as private keys, public addresses, transaction processes, and the mining of blocks, as well as the challenges posed by forking in a distributed network. Additionally, it touches on smart contracts, their interactions, and the use of gas for transactions within the Ethereum blockchain.
Intro into blockchain
- 1. Introduction to the Blockchain technology Blockchain Vlaanderen Meetup #2 April, 18th 2016 - KBC Boerentoren Antwerpen
- 2. 1. What is Blockchain? 2. How does Blockchain work? 3. And what are smart contracts?
- 4. How does Blockchain work, explained using the Bitcoin blockchain
- 5. Meet Peter and Mary Peter Mary
- 6. Only identified by their private key Private key: MHQCAQEEIDlbC…dPiE Laz5K4+PO4w== Private key: MHQCAQEEIMxR…jHiHBI JyuCtGkdJzw== Peter Mary
- 7. And the public address of their wallet Private key: MHQCAQEEIDlbC…dPiE Laz5K4+PO4w== Private key: MHQCAQEEIMxR…jHiHBI JyuCtGkdJzw== Address: 19jgcudmDT… vXfJd47yjLev Address: 1VDQ5BJfRC … 27SsKfUrgdaG Peter Mary
- 8. Since the blockchain is a ledger, it knows the balance of those wallets Private key: MHQCAQEEIDlbC…dPiE Laz5K4+PO4w== Private key: MHQCAQEEIMxR…jHiHBI JyuCtGkdJzw== Address: 19jgcudmDT… vXfJd47yjLev Address: 1VDQ5BJfRC … 27SsKfUrgdaG Peter Mary
- 9. Mary constructs a transaction to send 10BTC to Peter Peter Mary send 10 BTC from 1VDQ5BJfRC…27SsKfUrgdaG to 19jgcudmDT…vXfJd47yjLev Address: 19jgcudmDT… vXfJd47yjLev Address: 1VDQ5BJfRC … 27SsKfUrgdaG
- 10. And signs it with her private key Peter Mary send 10 BTC from 1VDQ5BJfRC…27SsKfUrgdaG to 19jgcudmDT…vXfJd47yjLev Address: 19jgcudmDT… vXfJd47yjLev Address: 1VDQ5BJfRC … 27SsKfUrgdaG Private key: MHQCAQEEIMxR…jHiHBI JyuCtGkdJzw==
- 11. The transaction is sent to the network and propagates into the transaction pool of each node
- 12. Miners start to create a candidate block Candidate Block Transaction Pool Validate and sort the transactions into a candidate block, no larger than the maximum blocksize
- 13. A block contains the transactions, plus the Merkle root Candidate Block Transaction Pool Merkle root ~ hash of all transactions in the block
- 14. And includes the hash of the previous block to chain them together Candidate Block Transaction Pool Merkle root ~ hash of all transactions in the block Hash of the previous block
- 15. Solving the proof of work puzzle, finding the nonce Transaction Pool Proof of work Candidate Block
- 16. After solving the puzzle, the result is sent back to the network Transaction Pool Proof of work Transmit the block to the network Candidate Block
- 17. And start again… Transaction Pool Proof of work Transmit the block to the network Candidate Block
- 18. Challenges of a distributed network: forking Blockchain
- 19. 19:15:10 - New block found on top of “green”! A fork in the making 19:15:11 - New block found on top of “green”! Blockchain
- 20. The chain has forked!Blockchain
- 21. Some miners are mining on top of “red”, some on top of “yellow”Blockchain
- 22. 19:25:13 - New block found on top of “yellow”! BlockchainA new block has been mined
- 23. Order has been restored, all is well… Blockchain Forking over one/two blocks is extremely rare. Transactions are considered secure after 6 blocks
- 24. And what are smart contracts?
- 25. Peter, now using a wallet with Ether… Address: 19jgcudmDT… vXfJd47yjLev Peter
- 26. … interacts with a “living” piece of software in the blockchain Private key: MHQCAQEEIDlbC…dPiE Laz5K4+PO4w== Address: 19jgcudmDT… vXfJd47yjLev Address: 1VDFGSJfRC … 27SsKfDhdiF Peter Turing complete programming language e.g. car lease
- 27. And pays for the processing power using “gas” Private key: MHQCAQEEIDlbC…dPiE Laz5K4+PO4w== Address: 19jgcudmDT… vXfJd47yjLev Address: 1VDFGSJfRC … 27SsKfDhdiF Peter Turing complete programming language Gas
- 28. Not just human to smart contract, but also between contracts Private key: MHQCAQEEIDlbC…dPiE Laz5K4+PO4w== Address: 19jgcudmDT… vXfJd47yjLev Peter
- 29. Questions?