The Blockchain

A Slightly Exhaustive Overview by Ethan Brouwer


  • 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


  • 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
    • 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

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)


  • 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"


  • Speaker Node (Commander)
  • Delegate Nodes (Lieutenants)
  • 66% agreement, it is accepted
  • Less than 66%, new Speaker Node
  • Delegate nodes check proposed block for problems


  • 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


// 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`.
                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.
            msg.sender == chairperson,
            "Only chairperson can give right to vote."
            "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[].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; = 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)



  • 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?