The Blockchain
A Slightly Exhaustive Overview by Ethan Brouwer
Terminology
- Cryptocurrency
- Blockchain
- Decentralized
- Ledger
- Private/Public keys
- Satoshi Nakamoto
- White paper
- Peer to peer (P2P)
Basics of Blockchain
- It’s literally a chain of blocks
- Blocks are mined by nodes in the network that are connected peer-to-peer
- Each node holds the entire ledger/blockchain
- Mining - process by which blocks are added
Mining
- Groups of nodes (Not necessarily all of them, and sometimes just one)
- They are working together to confirm blocks of transactions
- Consensus Algorithms
- Proof of Work (PoW)
- Proof of Stake (PoS)
- Tons more...
Public/Private Key Stuff
- Public key encrypts
- Private key is the only thing that can decrypt
- Private key signs
- Public key verifies signature
Consensus Algorithms
- Proof of Work (PoW)
- Proof of Stake (PoS)
- Delegated Proof of Stake
- Leased Proof of Stake
- Proof of Elapsed Time
- Practical Byzantine Fault Tolerance (PBFT)
- Simplified Byzantine Fault Tolerance (SBFT)
- Delegated Byzantine Fault Tolerance (DBFT)
- Directed Acyclic Graphs (DAG)
- Proof of Activity
- Proof of Importance
- Proof of Capacity
- Proof of Burn
- Proof of Weight
- And more...
Proof of Work
- Hashing Algorithm for Bitcoin is SHA-256
- Difficulty increases as computing power increases
- Reward is currently 6.25 BTC (The halvening...)
- Mining Pools
- Poolin
- F2Pool
- BTC.com
- AntPool
- More...
- 51% Attack (CPU)
Block Proposed
Node works on Hash
Node Proposes Hash
Other Nodes Confirm Hash
Block is Entered into the Ledger
Node Receives Reward
Just a bit more detail...
- Block Hash: 0x0000000000000000000a3c2821514f18f40fd85359a0fc330729f73f945085ec
- Confirmations: 1
- Timestamp: 2020-08-20 10:32
- Height: 644579
- Miner: F2Pool
- Number of Transactions: 2,469
- Difficulty: 16,947,802,333,946.61
- Size: 1,251,876 bytes
- Nonce: 4,247,817,874
- Transaction Volume: 6157.65614867 BTC
- Block Reward: 6.25000000 BTC
- Fee Reward: 0.94561077 BTC
Why is it Secure?
- Confirmed Blocks are linked
- Byzantine Fault Tolerance
- Unless a majority of bad people
controls it, it's safe
- Unless a majority of bad people
Proof of Stake
- Staking (Security Deposit, basically)
- 51% Attack (Market Share)
- Power in the Blockchain is determined by how much of the coin you own
- Against your own interest to be malicious if you have a lot
- Many different Byzantine Fault Tolerant (BFT) models
Ethereum (ETH2)
PBFT
- Primary (leader) node changes every round
- Majority of other nodes can vote to change leader
- Request is successful when (m+1) replies come with the same result
- m = "number of allowed faulty nodes"
DBFT
- Speaker Node (Commander)
- Delegate Nodes (Lieutenants)
- 66% agreement, it is accepted
- Less than 66%, new Speaker Node
- Delegate nodes check proposed block for problems
DAG
- Technically no longer a Blockchain
- Hedera Hashgraph
- IOTA
- Nano
- Cheaper/Scalable alternative
- It is however a DLT (Distributed Ledger Tech)
- Transactions are directly linked rather than blocks
- Gossip Protocol
Proof of Burn
- "Burnt coins are mining rigs!"
- Instead of spending for PoW, just burn the coins
- Depending on how many coins you burn, you have more power in the chain
Byzantine Fault Tolerance
Byzantine Generals Problem
- You need total agreement to attack successfully
- Messengers
- As long as more than 2 nodes, you can come to consensus
- 66% Rule
What about Crypto?
- Blockchain is a Distributed Ledger Technology
- The ledger is replicated across all nodes
- All coin balances are actually stored in the ledger by address
- When you have coins, you don't actually have the coins, you just have a reference to the ledger
- Transaction fees...
- Wallets...
- Public/Private Keys
What about NOT Crypto
Smart Contracts
- Immutable Code in the Ledger
- Associated to a wallet address
- The "terms" of the contract are immutable in code
- Solidity
- Decentralized Autonomous Organizations (DAO)
- Decentralized Applications (DAPPs)
- Gas
- Tokens and ICOs
Solidity
// SPDX-License-Identifier: GPL-3.0
pragma solidity >0.6.99 <0.8.0;
/// @title Voting with delegation.
contract Ballot {
// This declares a new complex type which will
// be used for variables later.
// It will represent a single voter.
struct Voter {
uint weight; // weight is accumulated by delegation
bool voted; // if true, that person already voted
address delegate; // person delegated to
uint vote; // index of the voted proposal
}
// This is a type for a single proposal.
struct Proposal {
bytes32 name; // short name (up to 32 bytes)
uint voteCount; // number of accumulated votes
}
address public chairperson;
// This declares a state variable that
// stores a `Voter` struct for each possible address.
mapping(address => Voter) public voters;
// A dynamically-sized array of `Proposal` structs.
Proposal[] public proposals;
/// Create a new ballot to choose one of `proposalNames`.
constructor(bytes32[] memory proposalNames) {
chairperson = msg.sender;
voters[chairperson].weight = 1;
// For each of the provided proposal names,
// create a new proposal object and add it
// to the end of the array.
for (uint i = 0; i < proposalNames.length; i++) {
// `Proposal({...})` creates a temporary
// Proposal object and `proposals.push(...)`
// appends it to the end of `proposals`.
proposals.push(Proposal({
name: proposalNames[i],
voteCount: 0
}));
}
}
// Give `voter` the right to vote on this ballot.
// May only be called by `chairperson`.
function giveRightToVote(address voter) public {
// If the first argument of `require` evaluates
// to `false`, execution terminates and all
// changes to the state and to Ether balances
// are reverted.
// This used to consume all gas in old EVM versions, but
// not anymore.
// It is often a good idea to use `require` to check if
// functions are called correctly.
// As a second argument, you can also provide an
// explanation about what went wrong.
require(
msg.sender == chairperson,
"Only chairperson can give right to vote."
);
require(
!voters[voter].voted,
"The voter already voted."
);
require(voters[voter].weight == 0);
voters[voter].weight = 1;
}
/// Delegate your vote to the voter `to`.
function delegate(address to) public {
// assigns reference
Voter storage sender = voters[msg.sender];
require(!sender.voted, "You already voted.");
require(to != msg.sender, "Self-delegation is disallowed.");
// Forward the delegation as long as
// `to` also delegated.
// In general, such loops are very dangerous,
// because if they run too long, they might
// need more gas than is available in a block.
// In this case, the delegation will not be executed,
// but in other situations, such loops might
// cause a contract to get "stuck" completely.
while (voters[to].delegate != address(0)) {
to = voters[to].delegate;
// We found a loop in the delegation, not allowed.
require(to != msg.sender, "Found loop in delegation.");
}
// Since `sender` is a reference, this
// modifies `voters[msg.sender].voted`
sender.voted = true;
sender.delegate = to;
Voter storage delegate_ = voters[to];
if (delegate_.voted) {
// If the delegate already voted,
// directly add to the number of votes
proposals[delegate_.vote].voteCount += sender.weight;
} else {
// If the delegate did not vote yet,
// add to her weight.
delegate_.weight += sender.weight;
}
}
/// Give your vote (including votes delegated to you)
/// to proposal `proposals[proposal].name`.
function vote(uint proposal) public {
Voter storage sender = voters[msg.sender];
require(sender.weight != 0, "Has no right to vote");
require(!sender.voted, "Already voted.");
sender.voted = true;
sender.vote = proposal;
// If `proposal` is out of the range of the array,
// this will throw automatically and revert all
// changes.
proposals[proposal].voteCount += sender.weight;
}
/// @dev Computes the winning proposal taking all
/// previous votes into account.
function winningProposal() public view
returns (uint winningProposal_)
{
uint winningVoteCount = 0;
for (uint p = 0; p < proposals.length; p++) {
if (proposals[p].voteCount > winningVoteCount) {
winningVoteCount = proposals[p].voteCount;
winningProposal_ = p;
}
}
}
// Calls winningProposal() function to get the index
// of the winner contained in the proposals array and then
// returns the name of the winner
function winnerName() public view
returns (bytes32 winnerName_)
{
winnerName_ = proposals[winningProposal()].name;
}
}
Bitcoin Smart Contracts
- There are a number Bitcoin Improvement Proposals (BIPs) that propose new OP codes that facilitate Smart Contracts
- Particl's MAD escrow - BIP 65
Ethereum Tokens vs ETH
- Token is created as a smart contract
- Introduced in EIP-20
// Functions
function totalSupply() public view returns (uint256);
function balanceOf(address tokenOwner) public view returns (uint);
function allowance(address tokenOwner, address spender)
public view returns (uint);
function transfer(address to, uint tokens) public returns (bool);
function approve(address spender, uint tokens) public returns (bool);
function transferFrom(address from, address to, uint tokens) public returns (bool);
// Events
event Approval(address indexed tokenOwner, address indexed spender,
uint tokens);
event Transfer(address indexed from, address indexed to,
uint tokens);
// Other Fields
string public constant name;
string public constant symbol;
uint8 public constant decimals;
ERC20 Token Smart Contract
The DAO Hack
- Venture Capital fund worth $150 million
- Hacked for about $53 million
- Way to `split` out of proposal if you are in the minority and get your money back
- Recursive call atack
- Kind of a philosophical problem too
- Forks (talk about later)
Forks
Forks
- Ethereum (ETH) and Ethereum Classic (ETC)
- Bitcoin (BTC) and Bitcoin Cash (BCH), Bitcoin SV (BSV), and Bitcoin Gold (BTG)
- Accidental vs Intentional
- Accidental - Two nodes find a block at the same time
- Intentional - Modify the rules of the blockchain
- Soft vs Hard
- Soft - Meant to end with one blockchain
- Hard - Two blockchains exist afterwards
- Is the blockchain really immutable?
Resources
-
https://www.youtube.com/watch?v=YJHcoHxfor4 - Consensus and BFT
-
https://people.eecs.berkeley.edu/~luca/cs174/byzantine.pdf - BFT
-
https://bitcoinmagazine.com/articles/yes-bitcoin-can-do-smart-contracts-and-particl-demonstrates-how - BTC Smart Contracts
-
https://en.bitcoinwiki.org/wiki/Bitcoin_Improvement_Proposals - BIPs
-
https://particl.wiki/learn/market/mad-escrow - Particl MAD Escrow
-
https://www.toptal.com/ethereum/create-erc20-token-tutorial - How to make an ERC20 Token
-
https://eips.ethereum.org/EIPS/eip-20 - ERC20 Spec
-
https://blockgeeks.com/guides/blockchain-glossary-from-a-z/ - Blockchain Glossary
-
https://101blockchains.com/consensus-algorithms-blockchain/ - Consensus Algorithm Ref
-
https://www.buybitcoinworldwide.com/mining/pools/ - Bitcoin mining pools
-
https://www.geeksforgeeks.org/practical-byzantine-fault-tolerancepbft/ - PBFT
-
https://cointelegraph.com/news/understanding-directed-acyclic-graphs-in-the-blockchain-landscape - DAG
-
https://docs.google.com/document/d/1XRscskAjHOv2XDY79fYZoyjLZ8JoW6sff33timEs-Kw/edit - My literature review on Blockchain
-
https://medium.com/@ogucluturk/the-dao-hack-explained-unfortunate-take-off-of-smart-contracts-2bd8c8db3562 - Awesome DAO Hack Explanation
-
https://solidity.readthedocs.io/ - Solidity docs
-
https://hackingdistributed.com/2016/06/28/ethereum-soft-fork-dos-vector/ - DAO Hack Soft Fork exploit
-
https://medium.com/coinmonks/blockchain-public-private-key-cryptography-in-a-nutshell-b7776e475e7c - An ok resource for public/private key stuff on the blockchain
-
https://www.sciencedirect.com/science/article/pii/S0736585318306324 - A crazy good lit review about blockchain applications
The Blockchain
By Ethan Brouwer
The Blockchain
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