Blockchain Technology: Introduction, Applications, Challenges

Blockchain

Decentralized technology for tracking digital transactions.

Cryptocurrency

Digital currency using cryptography for security.

Peer-to-peer

Direct interaction between users without intermediaries.

Bitcoin

First decentralized cryptocurrency introduced in 2009.

Tamper-proof

Data that cannot be altered or deleted.

Distributed ledger

Database spread across multiple locations or nodes.

Transparency

Open access to transaction data for verification.

Integrity of data

Ensuring accuracy and consistency of information.

Decentralization

Elimination of central authority in transaction processing.

Proof-of-Work

Consensus mechanism requiring computational effort to validate transactions.

Miner

Node in blockchain that validates and records transactions.

Block

Collection of transactions grouped together in blockchain.

Cryptographic mechanism

Mathematical algorithms ensuring data security and integrity.

Pseudonymous

User identities hidden while transactions are public.

Byzantine Generals Problem

Challenge of achieving consensus in distributed systems.

Quorum systems

Consensus method accepting majority votes for decisions.

Sybil attacks

Malicious activity creating multiple identities to disrupt consensus.

Double spending

Risk of spending the same digital currency twice.

Temporary inconsistencies

Momentary discrepancies in distributed data states.

Applications of blockchain

Use cases in finance, healthcare, and supply chain.

Challenges of blockchain

Issues like scalability, security, and regulatory concerns.

Digital currencies

Virtual currencies used for online transactions.

Central authority

Entity responsible for managing and verifying transactions.

Satoshi Nakamoto

Pseudonymous creator of Bitcoin and blockchain technology.

Pseudonymous

Users' identities are hidden in transactions.

Ledger

An open, append-only record of transactions.

Secure

Blocks are cryptographically linked to prevent tampering.

Shared

Public ledger accessible to all network users.

Distributed

Data is spread across multiple network nodes.

Permissioned Blockchain

Only authorized users can publish blocks.

Permissionless Blockchain

Anyone can publish blocks without authorization.

Consensus Methods

Techniques to achieve agreement among network nodes.

Hashing

Converts data into a unique fixed-size output.

Pre-image Resistant

Output cannot be reversed to find input.

Second Preimage Resistant

No second input generates the same output.

Collision Resistant

Finding two inputs for the same output is infeasible.

SHA-256

Secure Hash Algorithm producing 256-bit output.

Nonce

Random number used in proof-of-work consensus.

Digital Signatures

Cryptographic proof of authenticity for transactions.

Addresses

Unique identifiers for users in blockchain.

Blocks

Data structures containing transaction information.

Transactions

Records of value transfers between users.

Keccak

Another hashing algorithm used in blockchain.

RIPEMD-160

A cryptographic hash function used in blockchain.

Transparency

Open access to transaction history for users.

Tampering

Unauthorized alteration of data in the blockchain.

Cryptographic Mechanism

Techniques ensuring security and integrity of data.

Security Property

Features that protect data from unauthorized access.

Proof-of-Work

Consensus model adjusting nonce for specific outputs.

Nonce

A value adjusted in proof-of-work for mining.

Block Structure

Divided into header and body components.

Block Header

Contains hashes, nonce, timestamp, and merkle root.

Block Body

Holds all transactions within the block.

Merkle Root

Consolidated hash of all transaction hashes.

Transaction

Interaction between two entities in blockchain.

Bitcoin Transaction

Transfer of bitcoin between users.

Digital Asset Transaction

Transfer of ownership in digital assets.

Transaction Input

Data specifying source of funds in transaction.

Transaction Output

Data specifying destination of funds in transaction.

Sender's Address

Public identifier for the transaction sender.

Sender's Public Key

Public key used for verifying sender's signature.

Digital Signature

Unique signature verifying transaction authenticity.

Transaction Validity

Adherence to blockchain implementation protocols.

Transaction Authenticity

Assurance sender owns transmitted digital assets.

Public Key Cryptography

Asymmetric encryption using public and private keys.

Asymmetric Key Cryptography

Uses two related keys for encryption and decryption.

Encryption

Converting data into a secure format.

Decryption

Converting encrypted data back to original format.

Symmetric Key Encryption

Single key used for both encryption and decryption.

Wallet

Software for storing private keys and addresses.

Address

Alphanumeric identifier for transaction participants.

Blockchain Nodes

Computers that validate and store blockchain transactions.

Blockchain

A decentralized ledger of transactions.

Block

Contains header metadata and transaction data.

Block Header

Metadata section of a blockchain block.

Block Body

Section containing valid transactions.

Hash

Unique identifier for a block's data.

Tampering

Unauthorized alteration of blockchain data.

Consensus Mechanism

Process for network agreement on block additions.

Proof of Work (PoW)

Consensus model requiring computational effort to validate.

Proof of Stake (PoS)

Consensus model based on ownership of cryptocurrency.

Proof of Authority (PoA)

Consensus model relying on trusted validators.

Proof of Elapsed Time (PoET)

Consensus model using trusted execution environments.

Miner

Node that validates transactions and publishes blocks.

Cryptographic Puzzle

Complex problem miners solve for block validation.

Smart Contract

Automated contract execution on blockchain.

Nick Szabo

Developer of the concept of smart contracts.

Decentralized Apps (DApps)

Applications built on blockchain technology.

Ethereum

Blockchain supporting smart contracts and DApps.

Hyperledger

Framework for enterprise blockchain solutions.

Solidity

Primary programming language for Ethereum smart contracts.

Pseudonymous

Users' identities are hidden but traceable.

Public Key Cryptography

Security method for verifying transactions.

SHA-256

Hashing algorithm used in Bitcoin blockchain.

Scalability

Ability of blockchain to handle growth.

Ethereum

A general-purpose blockchain platform developed in 2013.

Smart Contracts

Programmed applications executing conditions on blockchain.

Decentralized Applications (DApps)

Applications with backend on blockchain, frontend in any language.

Industry 4.0

Integration of technologies for enhanced industrial processes.

FinTech

Financial services utilizing blockchain for transactions and management.