This Edureka Blockchain training will give you a fundamental understanding regrading Blockchain and Bitcoin. This session will help you learn following topics: 1. Current Existing Monetary System 2. How can Blockchain and Bitcoin help? 3. What is Blockchain? 4. Blockchain concepts 5. Bitcoin Transaction 6. Blockchain features 7. Blockchain Use Case 8. Demo: Bitcoin Transaction

2. Agenda
Current Existing Monetary
System
What is Blockchain?
How can Blockchain and
Bitcoin help?
Blockchain Concepts
Bitcoin Transaction
Blockchain Use Cases
Blockchain Features
Demo – Bitcoin Transaction

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Current Existing Monetary System

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Change of Monetary system Over time
Blockchain Training

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How Trading Happens Using Current System
Blockchain Training

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How Trading Happens Using Current System
Blockchain Training

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How Trading Happens Using Current System
Blockchain Training

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How Trading Happens Using Current System
Blockchain Training

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Issues with the Current System

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Issues with current Banking Systems
Blockchain Training
Double Spending
Bank transactions are prone to Double spending due to Fake Currencies and Digital
Frauds

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Issues with current Banking Systems
Standard Transaction Fees
JPMorgan Chase, Bank of America and Wells Fargo
alone earned more than $6 billion from ATM and overdraft fees in 2015 (SNL Financial and
CNNMoney Report)
Blockchain Training
Trusted Third PartyChandler
$100 $98
Joey

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Issues with current Banking Systems
Transactions require a lot of time to be Verified and completed causing huge delays.
Transaction Delays
Blockchain Training

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Issues with current Banking Systems
US Federal Reserve
Reserve Bank of India
Banks have become synonymous with crises and crashes
due to depression and fractional reserve banking
Blockchain Training

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How can Blockchain and Bitcoin help?

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How can Blockchain and Bitcoin help?
Following are the ways by which Blockchain and Bitcoins solves these Issues:
Issues with centralized banks
Blockchain Training
Decentralized
Power
Public
Ledger
No Double
Spending
Immutable
to Hacks

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How can Blockchain and Bitcoin help?
And the best part of using such a cryptocurrency is
that the transaction fee is zero or very
minimal in comparison with third parties such
as banks and digital transfer systems.
Blockchain Training

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What is Blockchain?

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What is Blockchain?
Blockchain is the technology behind Bitcoin
Blockchain Training

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Blockchain is the technology used in Bitcoin. It is a public distributed database holding encrypted ledgers.
Blockchain Overview
[
First Block Growing Blockchain
Sample Blockchain
New Blocks
A block is the ‘current’ part of a blockchain which records some or all of the recent transactions, and once
completed goes into the blockchain as permanent database. Each time a block gets completed, a new block
is generated.
Blockchain Training

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Blockchains are built from 3 technologies:
Blockchain Overview
Blockchain uses Private Key Cryptography to secure identities
and hash functions to make the blockchain immutable
P2P machines on the network help in maintaining the
consistency of the distributed ledger
The program gives the blockchain its protocol based on the
requirement
Blockchain Training

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Public Key Cryptography
This approach involves two different keys
 One key is purposely kept private, the other is provided to the other party(or often the public)
 If you use private key to encrypt then the public key can decrypt
 If you use the public key to encrypt then you use the private key to decrypt. This is called
asymmetric encryption
Blockchain Training

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Peer to Peer Network
Verified
Verified
Suppose A finds the transaction: Bobby (B)
pays 5 coins to Cindy (C)
Node A broadcasts to the peers B and C in the
network
If the transaction is verified, the peers (here, B
& C) forward the transaction to their peers
The transactions propagate rapidly across the
network
Blockchain Training

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P2P Network – Distributed Ledger
10$
1$
3$
Bobby
Andy=10$
Andy->Bobby 10$
Bobby-> Derby 3$
Derby-> Cindy 1$
Cindy
Andy=10$
Andy->Bobby 10$
Bobby-> Derby 3$
Derby-> Cindy 1$
Andy=10$
Andy->Bobby 10$
Bobby-> Derby 3$
Derby-> Cindy 1$
Andy=10$
Andy->Bobby 10$
Bobby-> Derby 3$
Derby-> Cindy 1$
Andy=10$
Andy->Bobby 10$
Bobby-> Derby 3$
Derby-> Cindy 1$
Andy
Derby

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P2P Network – Digital Signature
Blockchain Training

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Blockchain Program
The Blockchain is the way of implementing any
solution/ use case
Blockchain is a concept and can be implemented
by any language
Solidity is the most preferred default for writing
programs in Blockchain
[
First Block Growing
Blockchain
Sample Blockchain
Blockchain Training

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Bitcoin Transaction

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The first decentralized digital currency
Ledger is produced by people using software that
solves mathematical problems
Created and held electronically in a peer to peer
open ledger called the blockchain
Uses cryptography to control its creation and
management
What is Bitcoin?
4
Blockchain Training

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Bitcoin Transaction
 Let us take a Bitcoin transaction where
James wants to transfer 500 BTC to
Kevin.
 The transaction is a part of the new
block that will be validated by miners
Lisa and Robert.
Blockchain Training

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Bitcoin Transaction
[
First Block Growing Blockchain
Sample Blockchain
Account Number
1Pos4r9Eesbv8754b…
Balance
19K4ejhJW94U0212… 37
1ZOL9470uier2UMb… 42.67
178errbZ81FePNr30… 1342
1Mr3UNPH8H4U24v… 12.005
563
1JoH83jfos03n2490i… 974.65
… …
Ledger
+500
- 500842
512.005
 Every transaction holds details of the transfer of currency from one account to the
another.
 The balance of any account is not stored explicitly. It is always calculated by adding
up all the blockchain transactions ever recorded.
Blockchain Training

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Bitcoin Transaction
 Lisa and Robert are miners who use
they resources to validate the block
containing the transaction.
Blockchain Training

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Bitcoin Transaction
 Once the block is validated, money is
deducted from James’ account and is
transferred to Kevin’s Bitcoin account.
 This solves the problem of Double
Spending.
Blockchain Training

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Bitcoin Transaction
 Finally, Lisa gets 12.5 BTC as incentive
which becomes the first transaction
for the next block.
 The current block becomes a
permanent part of the blockchain.
12.5 BTC
Blockchain Training

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Blockchain – Flow Diagram
Someone requests a
transaction
The transaction is
broadcast to the
P2P network
Validation
The network of
nodes validate the
transaction
Once verified, the transaction
becomes a part of new block
for the ledger
The new block is then added
to the existing blockchain
The transaction is complete
Blockchain Training

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Blockchain Features

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In any blockchain:
▪ All transactions are logged including information on the time,
date, participants and amount of every single transaction
▪ Each node in the network owns a full copy of the blockchain
Blockchain Features
Blockchain Training

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Blockchain Features
Transactions are verified by the
Miners after solving complex
math puzzles and maintain the
ledger
The mathematical principle
ensures that the nodes
automatically and continuously
agree to the current state of
the ledger and every
transaction in it.
If anyone attempts to corrupt a
transaction, the nodes will not
arrive at a consensus and hence
will refuse to incorporate the
transaction in the blockchain.
Blockchain Training

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Blockchain Types
 Public: The ledgers are visible to everyone on the
internet and anyone can verify and add a block of
transactions to the block chain.
Examples – Bitcoin, Ethereum, Dash, Factom
 Private: All permissions are kept centralized to an
organization. Only specific people in the organization
to verify and add transaction blocks but everyone on
the internet is generally allowed to view.
Examples- Multichain, Blockstack
 Consortium: Controlled by a consortium of members.
Only predefined set of nodes have access to write the
data or block.
Examples- Ripple and R3 Blockchain Types
Blockchain Training

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Blockchain Use Cases

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Blockchain Use Cases
▪ Monetary Aspect is just a tip of the iceberg of blockchain Technology
▪ Blockchain is a ground-breaking technology for which money is merely one of the possible applications
Blockchain Training

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Blockchain Use Cases
Blockchain Training
• Settlements
• Change of suppliers
• Meter data
• Real-time Capacity matching
• EV Charging
• Peer to peer trading
• Demand-side management
• Network services
• Autonomous network
configuration
• Self serve maintenance
• Asset and inventory tracking
• Cross asset/industry data
sharing
• Eligibility for social tariffs
• Safety authorization and
permit to work
• Fraud Detection
• Loyalty Scheme

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Blockchain Demo

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Blockchain Demo
Problem Statement
We will implement a digital Transaction between Different Bitcoin Wallets. The
following needs to be achieved:
1. Setting a Desktop wallet using JAXX.
2. Setting an Online Bitcoin Wallet using Blockchain.
3. Initiate a Transaction between Blockchain and JAXX.
4. Verify the transaction
Blockchain Training

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Download Jaxx wallet from
Jaxx.io
Blockchain Demo – Jaxx Wallet
Blockchain Training

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Blockchain Demo – Blockchain Wallet
Set up a Free Blockchain
Wallet
Blockchain Training

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Blockchain Demo – Bitcoin Transaction
Specify the Private Key of
the Receiver.
1
Specify the Bitcoins that
need to be transferred.
2
Blockchain Training

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Session In A Minute
Current Banking System Blockchain Concepts The Bitcoin Story
Blockchain Features Blockchain Use Cases Demo – Bitcoin Transaction
Blockchain Training

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