Blockchain

Blockchain

system of recording information

• linked to each other

• resistant to changes

• protects against crypto

Blockchain acts like a digital ledger of transactions that

duplicated and distributed across the entire network of computer systems on the blockchain

The "Chain"

Transactions are recorded only once

no participant can change/tamper with a transaction after it’s been recorded to the shared ledger

Blockchain tech is “often” described as

“trustless” system

Blockchain tries contributes trust thru 4 fundamental points

Decentralization

Immutability

Consensus Mechanisms

Cryptography

4 Elements of Blockchain: Decentralization

no single entity has control over the entire network

eliminates need for participants to trust central authority as everyone can have a copy

distributed across network of multiple nodes

Node

Computer

4 Elements of Blockchain: Immutability

once transaction added to BC, really hard to alter/delete

each trans is timestamped, protects against fraud and errors (can be traced)

4 Elements of Blockchain: Consensus

trans added to BC only when majority of nodes vote in agreement

Proof of work

solve energy-intensive algorithms

proof of stake

stake your own crypto as collateral

4 Elements of Blockchain: Cryptography

each transaction is hashed (has a signature)

makes it unique and creates a fingerprint

ensure integrity and security

Digital Trust

confidence in the integrity of the relationships,

interactions and transactions among suppliers/providers and

customers/consumers within an associated digital ecosystem.

1st Step in Blockchain process: transaction occurs

asset is moved or an event is recorded

2nd Step in Blockchain process: block created

transaction is grouped with other into a “block” of data

3rd Step in Blockchain process: verification

network confirms the transaction is valid

4th Step in Blockchain process: Hashing (signature)

block linked to previous block using a unique cryptographic signature

5th Step in Blockchain process: The chain

Once added to the chain, it becomes an irreversible part of the ledger

Public Blockchains

completely open and "permissionless."

Anyone w computer and internet access can join, view, and participate.

ex. Bitcoin and Ethereum

Private Blockchain

closed and "permissioned

controlled by a single organization that decides who is allowed to join the network and what actions they can take

ex. company using it for its own database

Consortium (or Federated) Blockchains

middle ground" where the network is managed by a group of organizations rather than just one. to shae the responsibility

ex. 10 banks working together to track international transfers