Understanding Blockchain the layman's terms with benefits and features

1. BLOCK CHAIN 101
Mining the Phenomenon for Real World applications

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03
Block Chain –
A common Man’s Viewpoint
Ashared ledger managed securely via transactions validated by all stakeholders rather than a central authority. Also can be configured to selectively provide
access to information through permissions and encryptions. The integrity and anonymity of the shared ledger is maintained through cryptography based on
advancedmathematics
1.TRANSACTION
Two or more parties
exchangedata: this could
Rrepresent money,
contracts, deeds, medical
records, customer details
or any other assets that
can be described in digital
form
2. VERIFICATION
network’sDepending on the
parameters, the transaction is
either verified instantly or
transcribed into a secure record
and placed in a queue of pending
transactions In this case the nodes
in the network and based on set of
rules already agreedto
3. STRUCTURE
Each Block is identified by a hash,
256-bit number, created using an
algorithm agreed upon by a
network. A block contains a header,
a reference to the previous block’s
hash, and a group of transactions.
The sequence of linked hashes
creates asecure, independent chain
4.VALIDATION
Blocks must be first validated to be
added to the Block Chain. The Most
accepted form of validation for open-
source block Chainsin proof of Work
–the solution to a mathematical
Puzzle derived from the blocks
header 5.BLOCKCHAINMINING
Miners try to solve the block by making
incremental changes to one variable until the
solution satisfies a network wide target. This
is called “proof of work” because correct
answers cannot be falsified. Potential
solutions must prove the appropriate level of
computing power wasdrained insolving
6.CHAIN
When a block is validated, the miners that
solved the puzzle are rewarded and the
block is distributed through the network.
Each node adds the block to the majority
chain, the network’s immutable and
auditable blockchain.
7.BUILT INDEFENCE
If a malicious miner tries to submit an altered
block to the chain, the hash function of that
block and all following blocks, would change.
Hence the other nodes would detect these
changes and reject the block from the
majority chain, preventing corruption

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Features and Benefits
Where and Why it works
FeaturesofBlockchain
STP Decentralized Anonymous Time-stamped Consensus Trust Immutable Secure Programmable
StraightThrough All network TheIdentity of the Transaction All network Theydon’t need Anyvalidated records All recordsare ABlockChainis
processing participants havea participants iseither Timestampis participants agreeto another intermediary are irreversibleand individually Programmable
capability copy of the ledger for pseudonymous or recorded oneach the validity ofeach to guaranteethe cannot bechanged encrypted (“SmartContracts”)
full transparency anonymous block of therecords other parties
Benefits ofBlockchain
Transactions time
reduced to minutesas
there is no
intermediary
interference to
facilitate the
transaction
Santander,
predicted thatblock
chain technologies
could reduce banks'
infrastructural costs
by $15-20bn ayear
by 2022.
Assetsare held “in the
cloud” and are tied to
their owners identities
rather thaninstitutional
custodians;allows
exchangeof
information without
third-partyvalidation
Secure
transaction
ledger
databasewhich
is shared in an
established,
distributed
network
Provides realtime
track of
transaction at
decentralized
system with no
double spending
or transaction
repudiation
AUTOMATION
Execution is open to
the Internet and
settlement is
automatic; canrun
without any human
interference and
without the control of
any institution.
EFFICIENCY
New Formsofvalue
interpretation
Optimized time to
value
Continuousand
autonomousmarkets
SERENITY
Cryptographic
Reputation
AMPLIFICATION
IOTIntegration
Collaboration
Public Transparency Empowered Consumer
BusinessConfidence Cross-Economy
Interoperability