An introduction to the blockchain, and demonstration of blockchain development in nodejs.

1. Blockchain and Its
Development
Abdullah Aziz
Researcher@SESLab
mister.abdullah.aziz@gmail.com
Feb 2, 2018

2. Contents
Blockchain Concept
• Characteristics
• Hashing
• Merkle Tree
• The Block
• Chain of Blocks
• Forks
• Securing Data
• Public vs Private Blockhain
Coding Blockchain
Demo of Running implementation of Blockchain

3. Blockchain
Concept
What is Blockchain?
• No more than a distributed database
• A large worldwide computer where everyone
can securely access data and execute
transactional code.
• All transactions stored in blocks of data.
• Blocks are very hard to manipulate.
• Due to its nature, you can say it gives you
trustworthiness.
• Not generally a place to store large amount of
data.
• Most data stored on blockchain are
transactions or state of object, rather than the
actual objects.

4. Blockchain
Characteristics
Global Singleton
• It is global singleton instances.
• Natively object oriented, where code and data reside
together, However objects are securely separated with each
other.
Accessible
• It's nature is accessible, everywhere there's internet, you can
access the blockchain.
Unstoppable
• No one in control over blockchain.
• It cannot be stopped and it cannot have central failure.
• No single point of attack. (till now)
Verifiable
• Everyone who have access to the blockchain can verify every
single transaction.

5. How does it
work?

6. How does it
work?
Initiate
• When someone is doing a single or group of transactions.
• Transaction is typically sending data in the form of contract.
Transaction
• Then the transaction is sent to a large peer-to-peer network to
computers.
• Each node is called a node, and all have the copy of existing data.
Transaction validation
• Then the transaction is executed and validated based on the pre-
shared contracts and scripts.
• Ensures that all nodes execute transaction using same set of rules.
• When the transaction is executed, the result is added to the
blockchain.

7. Transactions in
Blockchain
Atomic
• Full operation run, or nothing at all.
Inspectable
• It has to be inspectable.
• Every single method call that comes to blockchain comes with the
actual address to the caller.
• That gives unique possibility for securing and auditing solution on a
very wide scale.
Run Independently
• Transactions run independently of each other.
• No two operations can interact or interfere with each other.
Immortal
• Blockchain objects are immortal, all data of an object is permanent.
• The code for an object can never be changed and you can never
delete an object externally.
• The only way of deleting the block is that if it is programmed to
remove itself.

8. Hashing
Length of output always same
• Basically to execute mathematical algorithm that creates a
result with a given length regardless of the input.
Digital fingerprint
• he result of hashing function is hash, can think as a digital
fingerprint.
One Way
• It is a one way function, meaning the function will always
return the same result give the same input.
• But you can never regenerate the input based on the result of
the hashing algorithm.
Uses
• Password storing in database.
• To verify consistency. (check data compromised)
• In modern security.
Blockchain use SHA-256 hashing.

9. SHA-256
Input Output
I am Abdullah Aziz. 573cb37000355b98df2f9bae35f6
3ba669b533e4f0219f27fa595456
b0bc534b

10. Merkle Tree
• A Merkle Tree is a hash of hashes.
• Makes it quick and rather easy to confirm large amounts of data and
transactions.

11. The Block
• A block consists of data and its resulting hash.
• If we change the data in the the block, the hash will
change and the block will be invalid.
• It is also includes the NOUNCE, which is input to the
hashing algorithm that would result in the first part of
the hash to be something predefined like a set of zeros.
• It is not possible to predict the nounce so it can be
considered as the proof of work machine creating the
hash. (difficulty).
• Let say that we require our hash to have a leading
number of 4 zeros. Whenever we change anything, we
will need to rerun the hashing algorithm until we figure
out which nounce to set. (mining the Block)
Message:
“I am Abdullah Aziz”
Hash:
0000573cb3700035
5b98df2f9bae35f63
ba669b533e4f0219f
27fa595456b0bc53
4b
Nounce:
314115

12. A chain of Blocks
Number:
9
Message:
“I am Abdullah Aziz”
Hash:
0000573cb37000355b98df2f9bae
35f63ba669b533e4f0219f27fa595
456b0bc534b
Nounce:
314115
Timestamp:
321365171
Previous hash:
51d17b39395786e3ffaf14274d15
e780eeb4e4a51fdb4ca0bb66e65d
1b12094c
Number:
8
Message:
“I am Haris”
Hash:
51d17b39395786e3ffaf14274d15e780
eeb4e4a51fdb4ca0bb66e65d1b12094c
Nounce:
314115
Timestamp:
321365171
Previous hash:
07ab89a02c00f6b906411ff6f738581a3
a8c21005d850541b8503cee55a01890
Number:
10
Message:
“I am Komal”
Hash:
c8c7451c74931ec851ccd9fbed1a6152e
5bc61995aadca050249191053bdce0d
Nounce:
314115
Timestamp:
321365171
Previous hash:
0000573cb37000355b98df2f9bae35f6
3ba669b533e4f0219f27fa595456b0bc5
34b

13. A Distributed
Chain of
Blocks
• In Blockchain, we distributed a chain of blocks to a vast
number of computers.
• This means that the chain exists in multiple locations.
• Depending on the implementation of blockchain you
are using, it could be millions of replications of the
chain.
• This mean that we can easily figure out if something
has changed, even if one of the chain has be re-mined.
• The resulting hashes would be different from one
chain and blockchain works in a way where chain that
has the most work put into it, wins.
• The altered chain would than be rejected by
distributed blockchain and be removed.

14. Forks
Jack
• Jack receives 100 bitcoins from his mother and bought a car
from vendor a and sent 100 bitcoins to him. Vendor A received
the 100 coins from Jack.
• Jack also send 100 bitcoins to vendor B to buy another car
based on previous block where he have 100 bitcoins received
from his mother.
• This creates a FORK.
Vendor A
Vendor B

15. Forks
• In order for him to fix it, he must have a lot of
computing power at his hands.
• Actually, since the blockchain consists of having
to prove that you put work into the
calculations, he would have to have almost the
same computing resources, as the rest of the
blockchain in order for his new chain to be
accepted.
• This is quite unlikely, but people tried to do this
but this fork has always been downloaded and
removed.

16. Securing Your
Data
• Data stored in blockchain is generally available
to everyone that has access to the chain.
• In some cases, it is no problem that everyone
have access to the data, but in some cases, you
want to assure that you control who has your
data.
• There are basically two ways to do this:
• Obfuscation
• In software development, obfuscation
is the deliberate act of creating source
or machine code that is difficult for
humans to understand.
• Encryption

17. Public Vs. Private
Blockchain
Public Private
• Available to everyone.
• Expensive storage and
transaction.
• No given point of
attack.
• Rely on community, as
soon community gone
the chain will gone.
• Democratic
• Similar to traditional
database.
• Cost Controlled
• Known entities
• Controlled Storage
• Transition to
blockchain
• Fewer point of attacks

18. Coding Blocking

19. Block
The first block is called Genesis block.

20. Blockchain

21. Hash

22. Valid Hash
• A valid hash is a hash that
meets a certain requirement. For
this blockchain, three leading
zeros in front of the hash is the
requirement for a valid hash.
The number of leading zeros
required is the difficulty.

23. Mine Block
Mining is the process of finding a
valid hash.

24. Nounce
• The nonce is the number used
to find a valid hash.
• The nonce iterates from 0 until
a valid hash is found.
• This uses processing power!
• As difficulty increases, the
number of possible valid
hashes decreases.
• With less possible valid hashes,
it takes more processing power
to find a valid hash.

25. Mining new Block

26. Adding New Block
• When adding a new block to the
blockchain, the new block needs to
meet these requirements.
• Block index one greater than
latest block index.
• Block previous hash equal to
latest block hash.
• Block hash meets difficulty
requirement.
• Block hash is correctly
calculated.
• Other peers on the network will be
adding blocks to the blockchain, so
new blocks need to be validated.

27. Peer-to-Peer
Network
A global network of
computers work together
to keep the blockchain
secure, correct, and
consistent. Show code

28. Adding Peer

29. Demo

31. Summary
Blockchain Concept
• Characteristics
• Hashing
• Merkle Tree
• The Block
• Chain of Blocks
• Forks
• Securing Data
• Public vs Private Blockhain
Coding Blockchain
Demo of Running implementation of Blockchain

32. Thanks
Abdullah Aziz
Researcher@SESLab
mister.abdullah.aziz@gmail.com
https://www.linkedin.com/in/abdullah-aziz/