BLOCKCHAIN
@RomeoKienzler
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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)
![](https://s3.amazonaws.com/media-p.slid.es/uploads/167657/images/2399881/Blockchain.png)
Bitcoin (Block)
![](https://s3.amazonaws.com/media-p.slid.es/uploads/167657/images/2399945/Screen_Shot_2016-03-29_at_14.46.28.png)
Bitcoin (Transaction)
![](https://s3.amazonaws.com/media-p.slid.es/uploads/167657/images/2399955/Screen_Shot_2016-03-29_at_14.54.10.png)
Proof of Work
![](https://s3.amazonaws.com/media-p.slid.es/uploads/167657/images/2399902/Screen_Shot_2016-03-29_at_14.42.53.png)
- 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
![](https://s3.amazonaws.com/media-p.slid.es/uploads/167657/images/2400004/raspberry_pi_BlockErupterUSB-FrontBack-crop.jpg)
What is an ASIC
- Very low cost ultra high performance chip specialized on only one task
![](https://s3.amazonaws.com/media-p.slid.es/uploads/167657/images/2400004/raspberry_pi_BlockErupterUSB-FrontBack-crop.jpg)
![](https://s3.amazonaws.com/media-p.slid.es/uploads/167657/images/2400182/Bitcoin-Mining-USB-ASIC-Block-Erupters_635096703980791015.jpg)
What is an ASIC
- Very low cost ultra high performance chip specialized on only one task
![](https://s3.amazonaws.com/media-p.slid.es/uploads/167657/images/2400299/003201406301025098334V0o3dRR0656.jpg)
What is an ASIC
- Very low cost ultra high performance chip specialized on only one task
![](https://s3.amazonaws.com/media-p.slid.es/uploads/167657/images/2400299/003201406301025098334V0o3dRR0656.jpg)
![](https://s3.amazonaws.com/media-p.slid.es/uploads/167657/images/2400300/antminer-s1-hashing-chips-sideways.jpg)
What is an ASIC
- Very low cost ultra high performance chip specialized on only one task
![](https://s3.amazonaws.com/media-p.slid.es/uploads/167657/images/2399863/Cryptocurrency_Mining_Farm.jpg)
![](https://s3.amazonaws.com/media-p.slid.es/uploads/167657/images/2400317/Sept-15-Carnojet-.jpg)
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
![](https://s3.amazonaws.com/media-p.slid.es/uploads/167657/images/2400361/Screen_Shot_2016-03-29_at_16.20.28.png)
![](https://s3.amazonaws.com/media-p.slid.es/uploads/167657/images/2399881/Blockchain.png)
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
![](https://s3.amazonaws.com/media-p.slid.es/uploads/167657/images/2400377/cc.jpg)
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)
- 1,987