Chapter 1: Overview of Blockchain Technology and Concepts

Centralized

Has only a single copy of the ledger.

Decentralized

A trustless environment where all members get the same copy of the ledger.

Distributed

Indicates all members holding a fragment of the ledger.

Painpoints of centralization model

Includes central authority, single point of failure, data tampering, claim dispute, audit compliance, expensive, and vulnerable.

Blockchain history

In 1982, David Chaum proposed a blockchain-like protocol, which became the roots for cryptocurrency.

Satoshi Nakamoto

Conceptualized blockchain and introduced Bitcoin in 2008.

Blockchain

Can be defined as a distributed ledger, a consensus protocol, or a membership protocol.

Ledger

Tracks ownership of things such as gold, beads, cash, etc.

Distributed trust

No need to trust any designated centralized authority to maintain the ledgers; everyone keeps a copy of the ledger.

Consensus

Participants must agree on who gets to extend the blockchain and how, reaching a distributed consensus on all changes.

Decentralization

Potentially avoids a single point of failure.

Persistency

Provides tamper-proof after adding into the blockchain.

Anonymity

Solves the trust problems in blockchain.

Auditability

Allows everyone to verify the ledger.

Trusted Data

Data that is final and has no dispute.

Relational database vs. distributed ledger

Differentiate between the two types of data storage systems.

Data storage in centralized system

Compare and contrast with data storage in distributed system.

Blockchain technology

Define the technology that underpins cryptocurrencies.

Block

Define the term related to the structure of blockchain.

Characteristics of blockchain

Explain the key features that define blockchain technology.