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Brief Introduction to BlockChain and Bitcoin


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My talk about how BitCoin and BlockChain technologies work at Application of New Generation Technologies Session, Dec 2018, Urmia, Iran

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Brief Introduction to BlockChain and Bitcoin

  1. 1. A Brief Introduction to Bitcoin Mir Saman Tajbakhsh IT PhD. Candidate, Urmia University
  2. 2. whoami  Mir Saman Tajbakhsh  IT PhD. Candidate, Urmia University  Social Network Analysis and Data Mining (Academical)  Computer Security (Practical)  Bitcoin, Back in 2014, Op Silk Road!  P0SCon2018  Kenan Abdullahoglu  
  3. 3. Topics  Bitcoin  Blockchain
  4. 4. The Problem  The problems are Before Bitcoin (BB)  The Situation:  Always a TTP (Trusted Third Party) is needed for transactions.  All the payments are reversible (TTP Knows)  TTP adds cost to the transactions in order to solve conflictions  Small payments are not suitable for those amount of added costs  Solution  P2P money and P2P payments  Unfeasible calculations are needed to reverse the payment
  5. 5. Bitcoin Benefits  Uses Internet  No Bank branches or any other things needed.  Low transfer cost  Accessible everywhere  Anonymous and Private accounts  Law?  The only known things:  Payment ID (not wallet ID)  Payments  Accounts are created just by email address which can be temporary or fake.
  6. 6. Gain Bitcoin  Direct buy from money exchange offices  Mine  Miners verify the transactions  After validation, the whole DB is being updated.  By Force (  Sell goods or products
  7. 7. Asymmetric Cryptography  Private/Public Key  Invention after WWII  Anyone ones public key (e)  No one knows private key (d)  e(M) = C  d(C) = M  d(M) = C  e(C) = M
  8. 8. Hashing  One way function  Any change of input bit, may result in hash.  MD5, SHA256, SHA512  Birthday Paradox!
  9. 9. Transaction  Double Spending Problem  Big brother should know everything  WHAT?!  NOT ONLY Big Brother, BUT ALSO Everyone should know everything.
  10. 10. Miners  Start to compute a nounce  Adds Nounce to the transaction (block) hash  Decide to add how many transactions should be included in the block  Usually < 1 MB  Rewarded after solving 210000 blocks (find nounces)
  11. 11. Anonimity  WalletID (public key)  Email Address  No ID Card needed  TOR
  12. 12. Blockchain  A distributed way of storing time based electronic data  Prevents change in the time  Prevents changes in the data  Blockchain is chains of blocks.  What is a block?
  13. 13. Block  Block is made up of three main components:  Data  From  To  Amount  Block Hash  Previous Block Hash
  14. 14. Proof of Work  Find the nonce that add certain amount of 0s to the beginning of the block hash  A powerful miner (attacker) may change the entire chain  There is time limit of adding (changing) a new block  10 mins in Bitcoin
  15. 15. Network 1) New transactions are broadcast to all nodes. 2) Each node collects new transactions into a block. 3) Each node works on finding a difficult proof-of-work for its block. 4) When a node finds a proof-of-work, it broadcasts the block to all nodes. 5) Nodes accept the block only if all transactions in it are valid and not already spent. 6) Nodes express their acceptance of the block by working on creating the next block in the chain, using the hash of the accepted block as the previous hash.
  16. 16. Challenges  Can it be filtered?  It is P2P  Is it feasible for other usages?  Messages?  Take money for each transaction!
  17. 17. Thanks