Introduction to Blockchains

All Aboard the Hype Chain

http://slides.lucywyman.me/introduction-to-blockchain.html

Roadmap

What blockchains are?
How blockchains work?
When should you use blockchains?
Who's using blockchains now?

`$ whoami`

Lucy Wyman | @lucyCwyman

Software Engineer - Bolt

Puppet

What is a Blockchain?

A Hash Function

Takes any input, of any size
Outputs a fixed-sized string
Output is 'unique' to input
Idempotent
Infeasible to invert
Learn more

A Hash Function

2.4.4 :001 > require 'digest'
=> true
2.4.4 :002 > Digest::SHA256.hexdigest("Hello SCaLE!")
=> "0bb4b1b2992676414a822941f3160c7669404acb8bb8da18278e4f6aabf83b92"
2.4.4 :003 > Digest::SHA256.hexdigest("Longer input, same length output")
=> "380e12f12589eda081e21c794e6379053c75a54c3394ddad0d84026c1a6947ab"

Public Key Encryption

2 keys: public key, private key
Anyone can encrypt a message with my public key, and know that only I can decrypt it with my private key
I can sign a message with my private key, and anyone can decrypt with my public key and know it's from me
High degree of trust
Learn more

A Block

A cryptographic hash of the previous block
Creation date timestamp
Data

Each block stores owner's public-key (think RSA)

For Example

From https://github.com/lucywyman/blockchain-example

class Block
  def initialize(index, previous_hash, timestamp, data)
    @index = index
    @previous_hash = previous_hash
    @timestamp = timestamp
    @data = data
    @hash = self.hash_block
  end
end

Other examples

Another Link in the Chain

A data structure
A glorified linked list with only the 'append' function
Decentralized | Distributed | "Public"
"A distributed digital ledger"

Gif source

Another Link in the Chain

Chain Source

For Example

class Blockchain < Array
attr_reader :chain

def initialize
  @chain = [self.first_block]
end

def first_block
  return Block.new(0, "0", Time.now, "Hello blockchain!")
end

def add_block(name)
  index = @chain[-1].index + 1
  previous_hash = @chain[-1].hash
  timestamp = Time.now
  data = "#{name} voted for Hermione Granger"
  block = Block.new(index, previous_hash, timestamp, data)
  @chain.push(block)
end

How do Blockchains Work?

Adding a Block

Submit a transaction
Generate the block for that transaction
Network determines if the block is part of the authoritative chain

Consensus

Because chains are distributed 2 users can have different "correct" copies of data
Reconciled by having a higher value chain
Consensus algorithm
Blockchains must be Byzantine Fault Tolerant
Typically based on higher proof of work, or proof of stake

Consensus

Any given block will initially have a 'high' probability of not being included. That probability will decrease exponentially.

Proof of Work

Start with a nonce (32-bit number)
Hash the block
See if it's under the current target (256-bit number)
If not, increment nonce and try again

Proof source

Security

Because each block contains a hash of the previous block a bad actor would need to change a block then rehash, in order, every block in the chain
Can say with certainty that blocks older than X were made by that user at that time with that data
Doesn't ensure data is valid

Decentralization

No single point of failure
No central authority that needs to be trusted - consensus algorithm decides which is the authoritative chain
Publicly verifiable | Security through publicity

Public?

"An issue in this ongoing debate is whether a private system with verifiers tasked and authorized (permissioned) by a central authority should be considered a blockchain.[51][52][53][54][55]" Wikipedia

Proponents argue blockchains are structures
Opponents argue private chains don't support decentralized data verification, not protected from operator tampering
Words are hard.
A handy visualization