More Related Content
Similar to Class Notes Part 1.pdf Class Notes Part 1.pdf Class Notes Part 1.pdf Class Notes Part 1.pdf Class Notes Part 1.pdf Class Notes Part 1.pdf Class Notes Part 1.pdf Class Notes Part 1.pdf Class Notes Part 1.pdf Class Notes Part 1.pdf (20)
Recently uploaded (20)
Class Notes Part 1.pdf Class Notes Part 1.pdf Class Notes Part 1.pdf Class Notes Part 1.pdf Class Notes Part 1.pdf Class Notes Part 1.pdf Class Notes Part 1.pdf Class Notes Part 1.pdf Class Notes Part 1.pdf Class Notes Part 1.pdf
- 2. What is Blockchain? • The blockchain is a distributed database of records of all transactions or digital events that have been executed and shared among participating parties. • Each transaction is verified by the majority of participants of the system.
- 10. • It contains every single record of each transaction. • Bitcoin is the most popular cryptocurrency an example of the blockchain. • Blockchain Technology first came to light when a person or group of individuals name ‘Satoshi Nakamoto’ published a white paper on “BitCoin: A peer-to-peer electronic cash system” in 2008.
- 11. Characteristics • Distributed: The distributed ledger is shared and updated with every incoming transaction among the nodes connected to the Blockchain. All this is done in real time as there is no central server controlling the data. • Secure: There is no unauthorized access to Blockchain made possible through Permissions and Cryptography. • Transparent: Because every node or participant in Blockchain has a copy of the Blockchain data, they have access to all transaction data. They themselves can verify the identities without the need for mediators. • Consensus-based: All relevant network participants must agree that a transaction is valid. This is achieved through the use of consensus algorithms. • Flexible: Smart Contracts which are executed based on certain conditions can be written into the platform. Blockchain Networks can evolve in pace with business processes.
- 12. What are the benefits of Blockchain? • Time-saving: No central Authority verification is needed for settlements making the process faster and cheaper. • Cost-saving: A Blockchain network reduces expenses in several ways. No need for third-party verification. Participants can share assets directly. Intermediaries are reduced. Transaction efforts are minimized as every participant has a copy of the shared ledger. • Tighter security: No one can tamper with Blockchain Data as it is shared among millions of Participants. The system is safe against cybercrimes and Fraud. • Collaboration: It permits every party to interact directly with one another while not requiring third-party negotiation. • Reliability: Blockchain certifies and verifies the identities of every interested party. This removes double records, reducing rates and accelerating transactions.
- 13. Blockchain project ideas • Cryptocurrency Wallet: Create a simple cryptocurrency wallet application that allows users to send and receive digital assets. • Blockchain Explorer: Develop a web-based application that allows users to view and search the transactions on a specific blockchain. • Smart Contract: Implement a simple smart contract on the Ethereum blockchain that can be used to manage a digital token or asset. • Voting System: Create a blockchain-based voting system that allows for secure and transparent voting while maintaining voter anonymity. • Supply Chain Management: Develop a blockchain-based system for tracking the movement of goods and services through a supply chain, providing greater transparency and traceability. • Decentralized marketplace: Create a decentralized marketplace using blockchain technology where the goods and services can be directly bought by the customers without any intermediary. • Identity Management: Create a decentralized digital identity management system that allows users to control their personal information and share it securely with others.
- 14. Advantages of Blockchain Technology: • Decentralization: The decentralized nature of blockchain technology eliminates the need for intermediaries, reducing costs and increasing transparency. • Security: Transactions on a blockchain are secured through cryptography, making them virtually immune to hacking and fraud. • Transparency: Blockchain technology allows all parties in a transaction to have access to the same information, increasing transparency and reducing the potential for disputes. • Efficiency: Transactions on a blockchain can be processed quickly and efficiently, reducing the time and cost associated with traditional transactions. • Trust: The transparent and secure nature of blockchain technology can help to build trust between parties in a transaction.
- 15. Disadvantages of Blockchain Technology: • Scalability: The decentralized nature of blockchain technology can make it difficult to scale for large-scale applications. • Energy Consumption: The process of mining blockchain transactions requires significant amounts of computing power, which can lead to high energy consumption and environmental concerns. • Adoption: While the potential applications of blockchain technology are vast, adoption has been slow due to the technical complexity and lack of understanding of the technology. • Regulation: The regulatory framework around blockchain technology is still in its early stages, which can create uncertainty for businesses and investors. • Lack of Standards: The lack of standardized protocols and technologies can make it difficult for businesses to integrate blockchain technology into their existing systems. • Overall, the advantages of blockchain technology are significant and have the potential to revolutionize many industries. However, there are also several challenges and disadvantages that must be addressed before the technology can reach its full potential.
- 16. History of Blockchain • 1991: In 1991, researcher scientists named Stuart Haber and W. Scott Stornetta introduce Blockchain Technology. These scientists wanted some Computational practical Solution for time-stamping the digital documents so that they couldn’t be tempered or misdated. So both scientists together developed a system with the help of Cryptography. In this System, the time-stamped documents are stored in a Chain of Blocks. • 1992: After that in 1992, Merkle Trees formed a legal corporation by using a system developed by Stuart Haber and W. Scott Stornetta with some more features. Hence, Blockchain Technology became efficient to store several documents to be collected into one block. Merkle used a Secured Chain of Blocks that stores multiple data records in a sequence. However, this technology became unused when the Patent came into existence in 2004. • 2000: In the year 2000, Stefan Konst published his theory of cryptographic secured chains, plus ideas for implementation.
- 17. • 2004: In the year 2004, Cryptographic activist Hal Finney introduced a system for digital cash known as “Reusable Proof of Work”. This step was the game-changer in the history of Blockchain and Cryptography. This System helps others to solve the Double Spending Problem by keeping the ownership of tokens registered on a trusted server. • 2008: After that 2008, Satoshi Nakamoto conceptualized the concept of “Distributed Blockchain” in his white paper: ”A Peer to Peer Electronic Cash System”. He modified the model of Merkle Tree and created a system that is more secure and contains the secure history of data exchange. His System follows a peer-to-peer network of time stamping. His system became so useful that Cryptography became the backbone of Blockchain.
- 18. • 2009: After that, the evolution of Blockchain is steady and promising and became a need in various fields. In 2009, Satoshi Nakamoto Releases Bitcoin White Paper. Blockchain technology is so secure that the following surprising news will give proof of that. A person named, James Howells was an IT worker in the United Kingdom, he starts mining bitcoins which are part of Blockchain in 2009 and stopped this in 2013. He spends $17,000 on it and after he stopped he sells the parts of his laptop on eBay and keep the drive with him so that when he needs to work again on bitcoin he will utilize it but while cleaning his house in 2013, he thrashed his drive with garbage and now his bitcoins cost nearly $127 million. This money now remains unclaimed in the Bitcoin system. • 2014: The year 2014 is marked as the turning point for blockchain technology. Blockchain technology is separated from the currency and Blockchain 2.0 is born. Financial institutions and other industries started shifting their focus from digital currency to the development of blockchain technologies.
- 19. • 2015: In 2015, Ethereum Frontier Network was launched, thus enabling developers to write smart contracts and dApps that could be deployed to a live network. In the same year, the Linux Foundation launched the Hyperledger project. • 2016: The word Blockchain is accepted as a single word instead of two different concepts as they were in Nakamoto’s original paper. The same year, a bug in the Ethereum DAO code was exploited resulting in a hard fork of the Ethereum Network. The Bitfinex bitcoin exchange was hacked resulting in 120,000 bitcoin being stolen. • 2017: In the year 2017, Japan recognized Bitcoin as a legal currency. Block.one company introduced the EOS blockchain operating system which was designed to support commercial decentralized applications.
- 20. • 2018: Bitcoin turned 10 in the year 2018. The bitcoin value continued to drop, reaching the value of $3,800 at the end of the year. Online platforms like Google, Twitter, and Facebook banned the advertising of cryptocurrencies. • 2019: In the year 2019, Ethereum network transactions exceeded 1 million per day. Amazon announced the general availability of the Amazon Managed Blockchain service on AWS. • 2020: Stablecoins were in demand as they promised more stability than traditional cryptocurrencies. The same year Ethereum launched Beacon Chain in preparation for Ethereum 2.0. • 2022 : Ethereum has shifted from Proof of Work(PoW) to Proof of Stake(PoS) consensus mechanism. The original Ethereum mainnet merged with Beacon Chain which has Proof-of-Stake. Now it is existing as one chain. Ethereum’s energy consumption has reduced by ~99.95%.
- 21. • What are Centralized Systems? • Centralized systems are a type of computing architecture where all or most of the processing and data storage is done on a single central server or a group of closely connected servers. • This central server manages all operations, resources, and data, acting as the hub through which all client requests are processed. • The clients, or nodes, connected to the central server typically have minimal processing power and rely on the server for most computational tasks.
- 22. Key Characteristics of Centralized Systems • Single Point of Control: – All data processing and management tasks are handled by the central server. – Easier to manage and maintain since there is one primary location for administration. • Simplicity: – Simplified architecture with a clear structure where all operations are routed through the central node. – Easy to deploy and manage due to centralized nature. • Efficiency: – Efficient use of resources as the central server can be optimized for performance. – Easier to implement security measures and updates centrally. • Scalability Issues: – Limited scalability as the central server can become a bottleneck if the load increases significantly. – Adding more clients can strain the server’s resources, leading to performance degradation. • Single Point of Failure: – If the central server fails, the entire system can become inoperative. – High availability and redundancy measures are essential to mitigate this risk.
- 23. What are Decentralized Systems? • Decentralized systems are computing architectures where multiple nodes, often spread across different locations, share control and processing power without a single central authority. • Each node in a decentralized system operates independently but collaborates with others to achieve common goals. • This structure enhances fault tolerance, scalability, and resilience compared to centralized systems.
- 24. Key Characteristics of Decentralized Systems: • Distributed Control: – No single point of control or failure. – Each node operates independently, contributing to the overall system’s functionality. • Fault Tolerance: – If one node fails, the system can continue to function with the remaining nodes. – Enhanced resilience against failures and attacks. • Scalability: – Easier to scale by adding more nodes without overwhelming a central point. – Load distribution across multiple nodes improves performance and resource utilization. • Coordination and Communication: – Nodes must communicate and coordinate to maintain system integrity and consistency. – Complex algorithms and protocols often manage this coordination. • Autonomy and Redundancy: – Each node can operate autonomously, contributing to redundancy and reducing single points of failure. – Data and services are often replicated across multiple nodes for reliability.
- 25. What are Distributed Systems? • Distributed systems are computing architectures where multiple independent nodes or computers work together to achieve a common goal. • These nodes communicate and coordinate with each other over a network, appearing as a single coherent system to the end user. • Distributed systems aim to improve performance, reliability, scalability, and resource sharing by leveraging the collective power of interconnected devices.
- 26. Key Characteristics of Distributed Systems • Geographical Distribution: – Nodes are spread across different physical locations. – They communicate via a network, such as a local area network (LAN) or the internet. • Resource Sharing: – Nodes share resources such as processing power, storage, and data. – This enables more efficient utilization of resources. • Concurrency: – Multiple nodes operate concurrently, performing tasks simultaneously. – This parallelism enhances the system’s overall performance and throughput. • Scalability: – Easy to scale by adding more nodes to the system. – System capacity and performance improve with the addition of resources. • Fault Tolerance: – Designed to handle failures gracefully. – Redundancy and replication ensure the system remains operational even if some nodes fail. • Transparency: – The complexity of the distributed system is hidden from users. – Users interact with the system as if it were a single entity.