Ppt on blockchain technology

From the desk of
CA RATAN KUMAR AGARWALA
CA TALK TIME
BLOCKCHAIN
“Blockchain” is a specific type of database which is different from
a typical type of database. A blockchain collects information together
in groups, also known as chunks or blocks, that hold sets of
information. Blocks have certain storage capacities and, when filled,
are chained onto the previously filled block, forming a chain of data
known as the “BLOCKCHAIN.” All new information that follows that
freshly added block is compiled into a newly formed block that will
then also be added to the chain once filled. To continue…..

From the desk of
CA TALK TIME
BLOCKCHAIN- Transaction Process
A new Transaction is entered
1
The transaction is then transmitted to a network of peer-to-peer
computers scattered across the world.
2
This network of computers then solves equations to confirm the validity
of the transaction.
3
Once confirmed to be legitimate transactions, they are clustered
together into blocks or chunks.
4
These blocks or chunks are then chained together creating a long history
(chain) of all transactions that are permanent.
5
The transaction is complete and the chain is called “BLOCKCHAIN”.
6
To Continue……..

From the desk of
CA TALK TIME
Is Blockchain a Cryptocurrency?
Blockchain is the technology that enables the existence of cryptocurrency
(among other things).
1
Bitcoin is the name of the best-known cryptocurrency, the one for which
blockchain technology was invented.
2
A cryptocurrency (or “crypto”) is a digital currency that can be used to
buy goods and services, but uses an online ledger with strong
cryptography to secure online transactions.
3
The bitcoin network is underpinned by the blockchain technology, which is very difficult
to hack. In blockchain technology, data isn't stored in a central server, but across a huge
network of computers, which is constantly checking and verifying if the records are
accurate.
4
To Continue……..

From the desk of
CA TALK TIME
Blockchain- The Idea Behind
Although the mechanism of blockchain is full of complexity, the basic
idea is to decentralize the storage of data so that such data cannot be
owned, controlled or manipulated by a central entity.
1
The data which is stored inside a block depends on the type of
blockchain. For Example, A Bitcoin Block contains information about the
Sender, Receiver, number of bitcoins to be transferred and date stamp.
2
The technology could change the entire mechanism of the financial
markets, content distribution, supply chain management, the dispersal of
humanitarian aid and even voting in a general election.
3
To Continue……..

From the desk of
CA TALK TIME
DISTRIBUTED LEDGER TECHNOLOGY
A BLOCKCHAIN is thus a digital ledger of transactions that is
duplicated and distributed across the entire network of computer
systems on the blockchain. Each block in the chain contains a number of
TRANSACTIONS, and every time a new transaction occurs on the
blockchain, a record of that transaction is added to every participant’s
ledger. The decentralised database managed by multiple participants is
known as DISTRIBUTED LEDGER TECHNOLOGY (DLT).
1
2
To Continue……..
Blockchain is a type of DLT in which transactions are recorded with an
immutable cryptographic signature called a hash.

From the desk of
CA TALK TIME
IMMUTABLE CRYPTOGRAPHIC SIGNATURE
Immutable signatures are ideal tools to provide authentication
and integrity for such applications with an important property
called IMMUTABILITY. Signature immutability ensures that, no
attacker can derive a valid signature for unposed queries from
previous queries and their corresponding signatures.
1
2
To Continue……..
One of the key elements that make blockchain immutable is
cryptographic hashes, which is why blockchain is immutable.
The main advantage of hash is that it cannot be reverse-
engineered. That's the reason of its growing popularity.

From the desk of
CA TALK TIME
PROPERTIES OF DISTRIBUTABLE LEDGER TECHNOLOGY
1
2
To Continue……..
PROGRAMMABLE: For Example Smart Contracts
DISTRIBUTED: All network participants have a copy of the ledger for complete
transparency
SECURE: All records are individually encrypted.
3
IMMUTABLE: All validated records are irreversible and cannot be changed.
ANONYMOUS: The identity of participants is either anonymous or
pseudonymous.
4
5
UNANIMOUS: All network participants agree to the validity of each of the
records
6
TIME STAMPED: A transaction time stamp is recorded on a block
7

From the desk of
CA TALK TIME
BLOCKCHAIN- Why The Hype Around ?
1
There have been several attempts to create digital money in the past,
but they have always failed. The underlying issue is TRUST. If someone
creates a new currency called the X dollar, how can we trust that they
won't give themselves a million X dollars, or steal your X dollars for
themselves?
Bitcoin was designed to solve this problem by using a specific type of
database called a BLOCKCHAIN.
Most normal databases, such as an SQL database, have someone in
charge who can change the entries (e.g. giving themselves a million X
dollars). Blockchain is different because nobody is in charge; it’s run by
the people who use it. What’s more, bitcoins can’t be faked, hacked or
double spent – so people that own this money can trust that it has
some value. To continue…..

From the desk of
CA TALK TIME
ANALOGY OF BLOCKCHAIN
1
A most simple analogy for understanding BLOCKCHAIN TECHNOLOGY is
a Google Doc. When we create a Google Document and share it with a
group of people, the document gets distributed instead of being copied
or transferred. This thus creates a decentralized distribution chain that
gives everyone access to the document at the same time. No one is
required to wait for changes to be done by another party, while all
modifications and/or insertions to the document are being recorded in
real-time, making all the relevant changes completely transparent with a
date and time stamp. Of course, BLOCKCHAIN is much more complicated
and complex than a Google Doc, but the analogy of Google Doc
properly fits into Blockchain technology as because it illustrates three
critical ideas of the technology:
To continue…..

From the desk of
CA TALK TIME
BLOCKS IN A BLOCKCHAIN
1
Each BLOCKCHAIN comprises multiple blocks and each block has
following three basic elements:
•The data in the block.
•A 32-bit whole number called a NONCE. The nonce is randomly
generated when a block is created, which then generates a BLOCK
HEADER HASH.
•The hash is a 256-bit number twined or wedded to the nonce. It must
start with a huge number of zeroes (i.e., be extremely small). When the
first block of a chain is created, a nonce generates the cryptographic hash.
The data in the block is considered signed and forever tied to the nonce
and hash unless it is mined.
To
continue…..

From the desk of
CA TALK TIME
MINERS
1
Miners create new blocks on the chain through a process called MINING.
In a blockchain every block has its own unique nonce and hash, but also gives
reference of the hash of the previous block in the chain, so mining a block isn’t that
easy as it appears, especially on larger chains.
Miners use special software to solve the most complex math problem of finding a
nonce that generates an accepted hash. Because the nonce is only 32 bits and the
hash is 256, there are roughly four billion possible nonce-hash
combinations that must be mined before the right one is found. When
that happens miners are said to have found the "golden nonce" and their block is
added to the chain.
Making a change to any preceding block in the chain requires complete re-mining of
not just the block with the change, but all of the blocks that come after. This is why
it's extremely difficult to temper with blockchain technology.
To

From the desk of
CA TALK TIME
NODES
1
Nodes can be any kind of electronic device that maintains copies of the
blockchain and keeps the network functioning.
Decentralisation is the most important concept in blockchain technology. There is no
owner instead. Everything is controlled by a full proof system, it is a distributed
ledger via the nodes connected to the chain.
Every node has its own copy of the blockchain and the network must algorithmically
approve any newly mined block for the chain to be updated, trusted and verified.
Every action in the ledger can be easily checked and viewed. Each participant is
given a unique alphanumeric identification number that shows their
transactions.
Combining public information with a system of checks-and-balances helps the
blockchain maintain integrity and creates trust among users.
To
continue…..

From the desk of
CA TALK TIME
CRYPTOCURRENCY
1
The most well-known use (and maybe the most controversial one) of
BLOCKCHAIN is in CRYPTOCURRENCIES.
Cryptocurrencies are digital currencies (or tokens), like Bitcoin,
Ethereum or Litecoin, which are used to buy goods and services. Just
like a digital form of cash, crypto can be used to buy everything from
your food to your next home.
Unlike cash, crypto uses blockchain to act as both a public ledger and
an enhanced cryptographic security system, so online transactions are
always recorded and secured.
To continue…..

From the desk of
CA TALK TIME
BITCOIN VS BLOCKCHAIN SLIDE 1
1
The Bitcoin protocol is built on a blockchain. It is a new electronic cash
system that’s fully peer-to-peer, with no trusted third party.
The key thing to understand here is that Bitcoin merely uses
blockchain as a means to transparently record a ledger of payments
and is not the Blockchain in itself.
The cryptocurrency bitcoin has got its value because it holds up very
well when it comes to the six characteristics, viz. Durability, Portability,
Divisibility, Uniformity, Limited Supply and Acceptability.
To
continue…..

From the desk of
CA TALK TIME
BITCOIN VS BLOCKCHAIN SLIDE 2
1
•While bitcoin EXCHANGE-TRADED FUNDS (ETFs) are not yet a reality, blockchain ETFs
have already made their debut in markets.
•Virtual currencies are frequently embroiled in multiple regulatory battles and have been
scrutinized heavily, particularly for their role in facilitating criminal activities, such as money
laundering.
•Blockchain technology is neither banned nor under scrutiny by regulatory agencies.
•Blockchain ETFs primarily track the stock market prices of companies that have invested in
blockchain technology in their fund.
•More recently, optimism about the possibility of a bitcoin ETF in the near future has increased,
namely because the incoming chair of the SEC is Gary Gensler, who has deep expertise in
cryptocurrencies.

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