Blockchain

Blockchain Technologies
BABU PALLAM
2017CS18
M.tech, 2nd Year, Computer Science and Engineering(CSED)
Motilal Nehru National Institute of Technology Allahabad
October 15, 2018

Contents
1 Introduction
What is blockchain?
Why do we need blockchain?
2 Blockchain fundamentals
Architecture
How blockchain works?
3 Blockchain underlying technologies
4 Case Study: BIDaaS
5 Conclusion
BABU PALLAM 2017CS18 (MNNIT) Blockchain Technologies October 15, 2018 2 / 22

What is blockchain ?
It is a distributed ledger technology, developed by Satoshi Nakamoto,
in 2008, through the invention of Bitcoin.
Diﬀerent perspectives:
It is a data structure.
It is an abstract data type.
It is a technology.
It is an umbrella term.

Why do we need blockchain?
A new social adequate is being created!
Centralization to decentralization.
Untrusted environment require documentation.
Characteristics of blockchain:
It is immutable.
It provides security and resilient towards tampering.
It is always consistent.
It provides decentralized computing platform.
It provides cent per cent uptime of data.

Blockchain Architecture
Communication medium: Internet.
Decentralised network: Peer to peer
network.
Decentralised storage: Distributed
ledger.
Decentralised law: Consensus
algorithms.
Decentralised apps.: Interface between
the user.

Tasks need to be addressed:
1 Transaction generation
2 Storing the transactions
3 Preparing trustworthy environment
4 Distributing blocks and transactions
5 Updating ledger by new transactions or blocks

Signing the transaction
At sender(A) side:

Verifying the transaction
At recipient side:

2 Storing the transactions

3 Preparing trustworthy environment
Goal: Blockchain should be immutable.
Idea:
Consensus is computationally expensive.
Merkle tree makes manipulation easily noticable.
4 Distributing blocks and transactions
Goal: How do the nodes observe new transactions and blocks?
Idea:
Messages send in a gossip style.
Timestamp in each transaction helps node to order and ignore
duplicates.

Concensus algorithm: Proof of work
1 Get the Merkle root from tree of transactions to be added.
2 Create previous hash reference.
3 set difficulty-level = number of zeros preceded by the hash.
4 Get timestamp.
5 Set nonce = 0.
6 Apply hash puzzle: Find the hash of block header by varying nonce, so
that number of zeros at the first place of hash should be equal to
difficulty-level.

5 Updating ledger by new transactions or blocks
1 Node takes new transaction/block from mailbox and start processing.
2 In case of new transactions:
1 The node will verify each transaction.
2 If its invalid, node will discard it.
3 Perform proof of work with valid transactions
4 Broadcasts newly created block to the network.
3 In case of new blocks:
1 Verify all the transactions includes in it and proof of work.
2 Once it veriﬁed and is valid, update the local ledger
3 Once it veriﬁed and is invalid, discard it.

Blockchain underlying technologies

1. Encryption
Encryption: A way to acheive data security.
Encryption in blockchain: Provides data security.
Independent existence: Anywhere in digital world.
Blockchain without Encryption: loss data security.

1. Encryption
Encryption: A way to acheive data security.
Encryption in blockchain: Provides data security.
Independent existence: Anywhere in digital world.
Blockchain without Encryption: loss data security.
2. Smart contract
Smart contract: Self exicuting script.
Smart contract in blockchain: Helps to create business logic.
Independent existence: Can be implemented.
Blockchain without Smart contract: Possible.

3. Distributed ledger
Distributed ledger: A consensually shared and synchronized database
across a network.
Distributed ledger in blockchain: Ensures data consistency.
Independent existence: Yes, possible.
Phase King algorithm for BFT.
Distributed lock service by google.
Blockchain without distributed ledger: Possible, it is not mandatory.

Case Study: Blockchain based ID as a Service
BIDaaS Infrastructure

The terms associated with the entities:
Virtual ID of user Uusr
Private key of User Kusr
pri
Public key of User Kusr
pub
Private key of Partner Kptn
pri
Public key of Partner Kptn
pub
Private key of BIDaaS provider Kpro
pri
Public key of BIDaaS provider Kpro
pub
Encryption with private key EKpri
()
Decryption with public key DKpub
()
nonce r

User virtual ID creation: User generates the virtual ID from its
private key
Uusr = SHA256(Kusr
pri )
User Registration:
(Kusr
pub, Uusr , EKpro
pri
(Kusr
pub, Uusr ))

Mutual authentication:
User sends its virtual id and a nonce value to the associated partner.
M1 = (Uusr
, r, EKusr
pri
(Uusr
, r))
The partner validates M1:
DKusr
pub
(EKusr
pri
(Uusr
, r))
The provider sends response message M2 back to the user.
M2 = (Uusr
, r + 1, EKusr
pub
(Uusr
, r + 1, Kptn
pub))
User validates M2 using r + 1. After validation, the user sends M3 as
acknowledgement.
M3 = (Uusr
, r + 2, EKptn
pub
(Uusr
, r + 2))
The partner validates M3, then mutual authentication is successful.

Real world example with BIDaaS infrastructure:

Conclusion
Blockchain is unlocked a new paradigm for distributed computing and
applications.
The underlying technologies and new innovations make the
blockchain revolution without blockchain.
The future of blockchain would probably be a decentralized Internet,
in turn a decentralized society.

References
By Hanna Halaburda
Blockchain Revolution Without the Blockchain?
Communications of the ACM, July 2018, Vol. 61 No. 7, Pages 27-29
10.1145/3225619.
Johg-Hyouk Lee
BIDaaS: Blockchain Based ID As a Service
IEEE Access ( Volume: 6 ) 2169-3536 10.1109/ACCESS.2017.2782733.
By Satoshi Nakamoto
Bitcoin: A Peer-to-Peer Electronic Cash System
www.bitcoin.org.

Thank You

Blockchain

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