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How blockchain networks work
- 1. How blockchain networks work @QusaiJouda Unicef Ventrues qjouda@unicef.org
- 2. Session 1
- 3. Bitcoin Money, Digital cash, peer-to-peer
- 4. Google docs
- 5. Daniel
- 9. Daniel BobAlice Bob’s copyAlice’s copy Daniel’s copy Google’s copy docs.google.com
- 10. Daniel BobAlice Bob’s copyAlice’s copy Operations OperationsOperations Daniel’s copy Google’s copy docs.google.com
- 11. Daniel BobAlice Bob’s copyAlice’s copy Operations OperationsOperations Daniel’s copy Google’s copy Centralized Architecture docs.google.com
- 12. Daniel BobAlice Bob’s copyAlice’s copy Operations Operations Operations Daniel’s copy decentralized architecture
- 13. Daniel BobAlice Bob’s copyAlice’s copy Operations Operations Operations Daniel’s copy Another peer’s copy OperationsOperations
- 14. Daniel BobAlice Bob’s copyAlice’s copy Operations Operations Operations Daniel’s copy Another peer’s copy OperationsOperations Text editorDocument Network Conflicts Engine
- 15. Bitcoin
- 18. Satoshi
- 19. Satoshi
- 22. Bitcoin Network
- 27. Bitcoin Network www.blockchain.info bittrex.com www.bitbonkers.com BitPay wallet CoPay
- 28. Session 2
- 29. Digital signing
- 30. @QusaiJouda Public key Private key Sender Can be shared with the public. Always stays private. No need to reveal it to any party. Used to sign messages
- 31. @QusaiJouda Public key Private key Transaction 1BTC from Bob -> Alice Sender Receiver
- 32. @QusaiJouda Public key Private key Signature Signing Sender Receiver Transaction 1BTC from Bob -> Alice
- 33. @QusaiJouda Public key Private key Signature Signing Sender Receiver Public key Signature Transaction 1BTC from Bob -> Alice Transaction 1BTC from Bob -> Alice
- 34. @QusaiJouda Public key Private key Signature Signing Sender Receiver Public key Signature Verify Transaction 1BTC from Bob -> Alice Transaction 1BTC from Bob -> Alice
- 35. @QusaiJouda Public key Private key Sender Bitcoin Address Bitcoin private key
- 36. How many available addresses? 1.46 x 10^48 possible addresses (7.5 x 10^18) x (7.5 x 10^18) = 56x10^36 <<< Bitcoin addresses grains on Earth grains on Earth
- 37. live transaction
- 39. Alice Qusai Private Transaction 1BTC from Qusai -> Alice Public
- 40. Alice Qusai Private Transaction 1BTC from Qusai -> Alice Public Signature
- 44. Alice Qusai Private Public Signed Tx Signed Tx Signed Tx Signed Tx Signed Tx
- 45. Alice Qusai Private Public Signed Tx Signed Tx Signed Tx Signed Tx Signed Tx Signed Tx Signed Tx Signed Tx Signed Tx Signed Tx Signed Tx Signed Tx Signed Tx Signed Tx Signed Tx Signed Tx Signed Tx
- 46. Alice Qusai Private Public Signed Tx Signed Tx Signed Tx Signed Tx Signed Tx Signed Tx Signed Tx Signed Tx Signed Tx Signed Tx Signed Tx Signed Tx Signed Tx Signed Tx Signed Tx Signed Tx Signed Tx Signed Tx The transaction then needs to be mined in the blockchain
- 47. Visual Demo anders.com/blockchain/tokens.html Hashing, blocks, blockchain, distribution of a blockchain
- 48. Session 3
- 50. Proof-of-work live demo anders.com/blockchain/tokens.html Mining, coinbase transaction, economic incentive model
- 51. @QusaiJouda PoW • Embeds economic incentives into the blockchain network, miners need to invest CPU power in the network in order to be rewarded. • Secures the network. It costs money to participate in the network. Thus, it’s better for someone to play fairly by the consensus rules or, mostly, he/she will be losing.
- 52. Block #1 Block #2 Block #3 Block #20 Block #21 Block #22 TheBlockchain
- 53. Block #1 Block #2 Block #3 Block #20 Block #21 Block #22 Block #23 Block #23 TheBlockchain Found next block Found next block
- 54. Block #1 Block #2 Block #3 Block #20 Block #21 Block #22 Block #23 Block #23 Block #23 Block #23 TheBlockchain Found next block Found next block
- 55. Block #1 Block #2 Block #3 Block #20 Block #21 Block #22 Block #23 Block #23 TheBlockchain Block #24 Found next block
- 56. Block #1 Block #2 Block #3 Block #20 Block #21 Block #22 Block #23 Block #23 TheBlockchain Block #24 Found next block Block #24
- 57. Block #1 Block #2 Block #3 Block #20 Block #21 Block #22 Block #23 TheBlockchain Block #24 keep going
- 58. Transactions
- 59. Block #1 Block #2 Block #3 Block #20 Block #21 Block #22 Block #23 The Blockchain Block #24 new block every 10mins
- 60. Block #1 Block #2 Block #3 Block #20 Block #21 Block #22 Block #23 The Blockchain Block #24 new block every 10mins Block 24 Transactions Coinbase tx: block reward goes to the miner of the block Transaction #1 Transaction #2 Transaction #3
- 61. Block #1 Block #2 Block #3 Block #20 Block #21 Block #22 Block #23 The Blockchain Block #24 new block every 10mins Block 24 Transactions Coinbase tx: block reward goes to the miner of the block Transaction #1 Transaction #2 Transaction #3 Transacton #1 Inputs Outputs
- 62. Block #1 Block #2 Block #3 Block #20 Block #21 Block #22 Block #23 The Blockchain Block #24 new block every 10mins Block 24 Transactions Coinbase tx: block reward goes to the miner of the block Transaction #1 Transaction #2 Transaction #3 Transacton #1 Inputs Outputs Output #3 from tx 3 block 3 Output #1 from tx 5 block 20 + Signature of the owner pay 1btc to Qusai’s PublicKey pay 1btc to Mike’s PublicKey
- 63. Block #1 Block #2 Block #3 Block #20 Block #21 Block #22 Block #23 The Blockchain Block #24 new block every 10mins Block 24 Transacton #1 Inputs Outputs #1 pay 1btc to Qusai’s PublicKey #2 pay 1btc to Mike’s PublicKey Output #1 - can be called Locking script OP_DUP OP_HASH160 ‘9a31ab….’ OP_EQUALVERIFY OP_CHECKSIG Bitcoin Script/ Smart contracts
- 64. Session 4
- 65. Smart contracts Self executing governance mechanism over cryptocurrencies money systems
- 66. Ethereum
- 67. Solidity The Solidity Contract-Oriented Programming Language DAOs
- 68. ERC20 token Can represent currency, financial assets, equity shares, etc
- 69. Live demo Deploying ERC20 - Geth, truffle.js