Introduction to the Blockchain technology
Introduction to the Blockchain technology Blockchain Vlaanderen
Meetup #2April, 18th 2016 - KBC Boerentoren Antwerpen
1. What is Blockchain?2. How does Blockchain work?3. And what
are smart contracts?
How does Blockchain work,explained using the Bitcoin
blockchain
Meet Peter and Mary
PeterMary
Only identified by their private key
Private key: MHQCAQEEIDlbCdPiELaz5K4+PO4w==Private
key:MHQCAQEEIMxRjHiHBIJyuCtGkdJzw==PeterMary
And the public address of their wallet
Private key: MHQCAQEEIDlbCdPiELaz5K4+PO4w==Private
key:MHQCAQEEIMxRjHiHBIJyuCtGkdJzw==
Address:19jgcudmDTvXfJd47yjLevAddress:1VDQ5BJfRC27SsKfUrgdaGPeterMary
Since the blockchain is a ledger, it knows the balance of those
wallets
Private key: MHQCAQEEIDlbCdPiELaz5K4+PO4w==Private
key:MHQCAQEEIMxRjHiHBIJyuCtGkdJzw==
Address:19jgcudmDTvXfJd47yjLevAddress:1VDQ5BJfRC27SsKfUrgdaG
PeterMary
Mary constructs a transaction to send 10BTC to Peter
PeterMarysend 10 BTC from 1VDQ5BJfRC27SsKfUrgdaGto
19jgcudmDTvXfJd47yjLevAddress:19jgcudmDTvXfJd47yjLevAddress:1VDQ5BJfRC27SsKfUrgdaG
And signs it with her private key
PeterMarysend 10 BTC from 1VDQ5BJfRC27SsKfUrgdaGto
19jgcudmDTvXfJd47yjLevAddress:19jgcudmDTvXfJd47yjLevAddress:1VDQ5BJfRC27SsKfUrgdaG
Private key:MHQCAQEEIMxRjHiHBIJyuCtGkdJzw==
The transaction is sent to the network and propagates intothe
transaction pool of each node
Miners start to create a candidate block
Candidate BlockTransaction Pool
Validate and sort the transactions into a candidate block, no
larger than the maximum blocksize
A block contains the transactions, plus the Merkle root
Candidate BlockTransaction Pool
Merkle root ~ hash of all transactionsin the block
And includes the hash of the previous block to chain them
together
Candidate BlockTransaction Pool
Merkle root ~ hash of all transactionsin the block
Hash of the previous block
Solving the proof of work puzzle, finding the nonce
Transaction Pool
Proof of work
Candidate Block
After solving the puzzle, the result is sent back to the
network
Transaction Pool
Proof of work
Transmit the blockto the network
Candidate Block
And start again
Transaction Pool
Proof of work
Transmit the blockto the network
Candidate Block
Challenges of a distributed network: forking
Blockchain
19:15:10 - New block found on top of green!A fork in the
making
19:15:11 - New block found on top of green!
Blockchain
The chain has forked!
Blockchain
Some miners are mining on top of red, some on top of yellow
Blockchain
19:25:13 - New block found on top of yellow!
BlockchainA new block has been mined
Order has been restored, all is well
BlockchainForking over one/two blocks is extremely
rare.Transactions are considered secure after 6 blocks
And what are smart contracts?
Peter, now using a wallet with Ether
Address:19jgcudmDTvXfJd47yjLevPeter
interacts with a living piece of software in the blockchain
Private key: MHQCAQEEIDlbCdPiELaz5K4+PO4w==
Address:19jgcudmDTvXfJd47yjLevAddress:1VDFGSJfRC27SsKfDhdiFPeter
Turing complete programming languagee.g. car lease
And pays for the processing power using gas
Private key: MHQCAQEEIDlbCdPiELaz5K4+PO4w==
Address:19jgcudmDTvXfJd47yjLevAddress:1VDFGSJfRC27SsKfDhdiFPeter
Turing complete programming language
Gas
Not just human to smart contract, but also between contracts
Private key: MHQCAQEEIDlbCdPiELaz5K4+PO4w==
Address:19jgcudmDTvXfJd47yjLevPeter
Questions?
