BLOCKCHAIN

@RomeoKienzler

Bitcoin

  • oldest cryptocurrency
  • initiated anonymously (paper + source code)
  • creates a distributed ledger secured by proof of work
  • proof of work SHA-256 based
    • This is a problem! (see later)

Bitcoin (Blockchain)

Bitcoin (Block)

Bitcoin (Transaction)

Proof of Work

  • sha256(sha265(Block + Nonce)) = Hash
  • choose Nonce so that Hash starts with d leading zeros
  • d depends on "difficulty" and provided by the bitcoin network
  • Finding correct Nonce is "proof of work" and is rewarded with bitcoins (this is called bitcoin mining)

The problem with SHA256

The problem with SHA256

  • Easy to speed up using
    • GPU
    • FPGA
    • ASIC
  • Currently without the latest ASIC you spend more on energy than earning bitcoins 

What is an ASIC

  • Very low cost ultra high performance chip specialized on only one task

What is an ASIC

  • Very low cost ultra high performance chip specialized on only one task

What is an ASIC

  • Very low cost ultra high performance chip specialized on only one task

What is an ASIC

  • Very low cost ultra high performance chip specialized on only one task

What is an ASIC

  • Very low cost ultra high performance chip specialized on only one task

The Problem with SHA256

  • Original Idea is gone (everybody can mine bitcoins using his spare compute resources at home)
  • system now vulnerable to 51% attack
    • recently 50% of mining power achieved by a single pool

Alternative CryptoCurrencies

  • There are many alternatives
    • Auroracoin, BlackCoin, Dash, Dogecoin, DigitalNote, Ethereum, Litecoin, Mastercoin, MazaCoin, Monero, Namecoin, Nxt, Peercoin, Emercoin, PotCoin, Primecoin, Ripple, ShadowCash, Titcoin
  • Alternative hash algorithms
    • scrypt, X11, cryptonight, hashimoto
  • Alternative consensus methods
    • proof of stake

beyond payments

  • Idea: BlockChain as distributed ledger to ensure non-centralized authority on validation of any type of transaction
  • two promising candidates
    • Ethereum (Swiss Non-Profit Organization)
    • Hyperledger Project (The Linux Foundation, members: IBM, Deutsche Börse Group, Intel, JP Morgan, Cisco, RedHat, ...)

 

IBM Blockchain

  • Service running in the IBM Cloud
  • based on IBM's implementation of Hyperledger

http://ibm.biz/joinIBMCloud

Bibliography

Blockchain

By Romeo Kienzler

Blockchain

An overview on Blockchain (including BitCoin)

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