Over the past year, we have seen a rapid increase of interest in regards to the Blockchain Technology. During this presentation, we will break down the very basics of what the mysterious Blockchain actually is. We will cover what the Blockchain comprises of, hashing and proof of work, what happens during a transaction and the case for a global currency. Main points covered: • Outline potential uses for the technology and what it means for you. • Secured Hash Algorithm 256 and the proof of work concept. • What happens during a transaction? • Breakdown the beginnings of bitcoin. Presenter: Our presenter for this webinar will be Kenneth Kimbel who is a cybersecurity professional with over five years of overall experience providing diverse technology services in client-facing roles. Recent Master’s in Cybersecurity Risk Management as well as a JD with a Cybersecurity Law focus. Kenneth has knowledge on both current technical and legal issues in security. Link to the recorded webinar: https://youtu.be/mSiAqOZ6fNs

2. Agenda
• What is the Blockchain?
• Hashing and Proof of Work
• What Happens During a Transaction?
• Bitcoin and the Case for a Global Currency

3. What is the Blockchain?

4. The definition of Blockchain
• The Blockchain is an appendable immutable universally distributed open
ledger
• Immutable – cannot delete anything from the ledger
• Appendable – can add to the ledger
• Universally distributed – everyone has access to the same exact copy of the ledger
• Open ledger – the place where all transactions are recorded

5. The shop example
• Imagine everyone in a shop knows via a public ledger how much currency
everyone has
• By removing the exchange of money to there is a much lower possibility that people
will be exploited

6. Pubic key and Private key
• As long as your private key is kept private no one will ever determine your
public key.

7. Security Blockchain technology provides
• The security that you get by using Blockchain technology is from the fact
that the ledger is ongoing
• If someone tires to change the information of a block within the Blockchain the block
will break and the rest of the community will know that something went wrong
• When something goes wrong nothing happens since everyone has the same copy ledger and
ensures that all transactions are valid

8. The need
• As the population increases and more people will want to participate in the global economy
• Examples of Blockchain technology
• Voting (Estonia since 2004)
• Currency (Venezuela)
• Security breaches are now commonplace
• Can rely on complete transaction in a protected manner
• Don’t have to worry about being victim since the user is protected on both ends with Blockchain technology
• Takes out a huge amount of time and resources keeping track of money and information
• Blockchain is trustless since everyone has the same copy of the ledger
• Blockchain technology allows people to trust people without knowing them

9. The value in Blockchain technology being
decentralized
• When currency becomes decentralized societies can provide more equity to
their people
• Blockchain can provide everyone with an equal playing field
• All that is necessary is a cell phone
• India has adopted Blockchain technology largely because of these reasons

10. Interesting applications of Blockchain
technology
• Decentralized Internet
• If the internet becomes decentralized example
• Can export processing speed and storage across the globe
• Funding farmers in developing countries
• Smart Contract
• Remove banks
• Rely on a decentralized peer-to-peer network to allow people to vote on or provide funding.
• Democracy via a public ledger
• Their last election scared France

11. Hashing and Proof of Work

12. Questions to think about during this section
• How do I know my information is safe?
• How do I know that no one can go into the Blockchain and edit transaction
data?
• How do I know that no one get into the ledger after a transaction to either
falsify accounts and void smart contracts?

13. This where encryption comes in…
• SHA 256 encryption is the most popular encryption today and most often
associated with Blockchain technology
• It was developed by the NSA to ensure that codes were completely unique
• SHA 256 is valuable since the hash function produces unique outputs when
given different inputs

14. Secure Hash Algorithm (SHA)
• SHA-256
• 256 bit encryption
• 32 bytes
• 64 alphanumeric characters long every time

15. Examples of SHA-256
• When one character changes all 64 characters change:
• Example:
• Abc:
• 06D90109C8CCE34EC0C776950465421E176F08B831A938B3C6E76CB7BEE8790B
• aBc:
• 516DD854EC42B5B992888CFA87AE16E260864F5E051E045CD7D7C0B45EACBEB2
• Those exact inputs above will never yield a different hash

16. Hash function
• What is a function
• X=Y for example put simply 1=1
• A hash makes it much more complicated
• Example: think about your last meal

17. Why is this important
• Protects identity
• Your hash is your private key and public key
• Identifies you uniquely and maintains privacy
• Transactions on the Blockchain can be thought of as two unique 64 character long hashes
communicating with each other

18. SHA security
• Can the hash be deciphered?
• Yes
• But with all of the computing power in the world it would take around 1 billion years.

19. Applied to cryptocurrencies
• To protect your information while providing you a high level of security
exchanges do the following:
• They hash your information and provide you a pubic and private key
• In addition, exchanges require users to produce a secret passphrase
• This is the only way to access your account
• It can not be recovered if lost since it is the reverse of the users hash function
• Reversing the work done by the algorithm but takes a lot of work
• With all of the worlds computing power it would take approximately 1 billion years

20. To trust Blockchain you must believe in the
hashing
• The hash that is created for a user is unique to the user
• It changes the second it is manipulated
• When each new block is mined it references the hash of the previous block
• If a hash is changed the ledger will recognize that there is a problem with the Blockchain
• If one computer recognizes a difference in the previous block it all become
invalidated
• When this happens the longest chain in the ledger becomes the most secured and thus
relied upon chain for the given Blockchian

21. Proof of work concept
• Validates by looking for the longest chain
• There must be a way to prove that transactions are taking place in a truthful manner
• Must be able to make the assumption that your information is safe
• If you cannot trust the mathematics you cannot trust Blockchain technology
• Everyone within the given Blockchain environment can validate the longest
chain of mined blocks
• What happens if you change the hash output of a block?
• A fork occurs

22. What Happens During a Transaction?

23. What does a transaction on a ledger based
model look like?
• We keep track through nodes on the network that track transactions within
the Blockchain
• Once a transaction is initiated the entire Blockchain community updates the publically
available ledger to reflect new totals after the transaction
• Everyone can verify transactions
• Nonce values ensure that each transactions are distinguishable

24. What is a nonce value
• After the hash is created
• Blockchain technology then relies on a nonce value
• A nonce value does work to prove that you did the work to mine one specific block within a
Blockchain
• This is where the processing associated with Blockchain takes place
• Once the complex math is solved that requires large amounts of processing a nonce value is then created
• A nonce value is a number that is unique to the hash it is coupled with that indicates the
amount of zeros that are to be located at the front of the hash.
• Your nonce value + your hash = the next block on your Blockchain

25. The value of the nonce value within a
transaction on the Blockchain
• You can prove that a transaction happened on the Blockchain
• This cannot be done with conventional currency

26. Smart Contracts
• Blockchain provides an opportunity to exchange value and information at
the same time
• Parameters can be set that are required for a transaction to occur
• If a malicious actor attempts to change hash values a fork will occur
• When reviewing the proof of work before a transaction one can examine the Blockchain of
a malicious actor and find a short Blockchain
• Since a hash value was maliciously edited and the Blockchain was forked

27. The advantage of Blockchain transactions
• The proof of work concept when combined with nonce values and SHA
256 hashes provide an incredible amount of security
• It helps ensure that only the best and most confirmed version of a given Blockchain is
in use
• This quality ensures that everyone who is participating on the Blockchain knows what is
happening and is kept up to date
• Manipulated transactions are immediately invalidated

28. Bitcoin and the Case for a Global Currency

29. Bitcoin
• 2009 Bitcoin was first developed
• Hit its first peak in 2013
• Recently started to climb again starting in 2016

30. Bitcoin is a currency
• This is because Bitcoin can be exchanged for goods and services

31. One of the first uses of Bitcoin
• Silk Road a black-market on the dark web found value in Bitcoin
• Because Bitcoin was a currency that maintained privacy by only displaying a users
private key
• Users could send value anonymously
• These qualities for a short period of time helped the Silk Road flourish

32. Issues with Bitcoin today
• The time and the processing power required to mine a Bitcoin today has
increased drastically since its inception
• Because of this node operators, payment processors and miners have gained the ability
to categorize transactions and monetize them
• Because so many people want to use Bitcoin miners can now ask for high fees and average
fees for getting a transaction across the network in a timely manner has also increased
• These problems are creating inefficiencies for Bitcoin since transactions are becoming more costly
and slower

33. Forking
• A possible solution is to fork the Bitcoin Blockchain
• Forking is attractive since it would allow the verification method to remain intact

34. Blockchain Training Courses
on sight…
Exam and certification fees will be included in the training price.
www.pecb.com/events

35. THANK YOU
?
kenny.kimbel@gmail.com linkedin.com/in/kenneth-kimbel-1478ab52