Blockchain

@cosmycx

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Decentralization

Distributed System

How it Started

https://bitcoin.org/bitcoin.pdf

• October 2008, Nakamoto (group or individual) published a paper on Bitcoin: A Peer-to-Peer Electronic Cash System

• "A purely peer-to-peer version of electronic cash would allow online payments to be sent directly from one party to another without going through a financial institution"

What Makes it Possible

Computer Networks Protocols: TCP/IP

Mathematics and Cryptography

Digital Signature: Private - Public key pair

Cryptographic Hash Functions

sign with Private key, anyone can verify authenticity by using the corresponding Public key

maps data of arbitrary size to unique data of a fixed size, a.k.a. checksum, digest, digital fingerprint

Blockchain

Each peer has the ledger (database)

Transaction history is connected in an immutable chain

Ledger is advanced in a process called mining where peers take turns to make the next block based on mathematics

Why Care?

Each peer has the ledger (database)

Transaction history is connected in an immutable chain

• data exchanges
• supply chain
• audit
• proof of existence
• state (value) layer of internet
•  

• trustless
• distributes trust
• minimized amount of trust needed
•  

But Wait There is More

Smart Contracts

Smart Contracts Shared Ledger

Code that is guaranteed to perform as deployed, immutable.

Each peer has the ledger (database)

Why the Interest?

Smart Contracts

• tokens
• trustless agreements
• agreements without a third party
• digital identity
•  

https://en.wikipedia.org/wiki/ERC-20

Example: Token Contract

Code that is guaranteed to perform as deployed, immutable.

Even More

Decentralized Storage

Distributed Storage

Decentralized Distributed System

Trust moves from Central Authority to the System

DEMO

Running a Bitcoin simulation in JavaScript