Blockchain: A Distributed ledger

Assets

  • Anything that is capable of being owned or controlled to produce value, is an asset.

  • Tangible Assets
    • Asset that has a physical form.
    • e.g. Machinery, Buildings and Land
  • Intangible Assets
    • Asset that is not physical in nature.
    • Intangible assets are subdivide as
      • Financial, e.g. bond
      • Intellectual e.g. patents
      • Digital e.g. music

Ledger

  • Ledger is a principal book (or computer file) for recording asset transfer between participants.
  • Distributed ledger(shared ledger) is a ledger that is replicated, synchronized and spread across multiple sites, countries, and/or institutions.

What is Blockchain

  • Blockchain is an append-only distributed ledger, where records are stored in blocks, and blocks form a chain.
  • Every block contains transactions, that can be verified by any node in the network
  • Consensus is procedure to have an accurate Blockchain at every node.

Blockchain Video

Blockchain Types

  • Public ledger: Decentralized, anyone can read and send tranasctions, e.g. Bitcoin, Ethereum, Hyperledger
  • Private ledger: Centralized under one organization which controls the right to view ans send transactions, e.g. Bankchain

Blockchain Capabilities

Internet of Value

Consensus: A general agreement

Consensus achieved using Proof-of-Work.

  • New transactions are broadcast to all nodes.
  • Each node collects new transactions into a block.
  • Each node works on finding a difficult proof-of-work for its block.
  • When a node finds a proof-of-work, it broadcasts the block to all nodes.
  • Nodes accept the block only if all transactions in it are valid and not already spent.
  • Nodes express their acceptance of the block by working on creating the next block in the chain, using the hash of the accepted block as the previous hash.
  • Nodes always consider the longest chain to be the correct one and will keep working on extending it.

Consensus defines types of Blockchain

  • Permissionless Blockchain: Every node in the network participate in consensus procedure, e.g. Bitcoin Blockchain (Proof of Work)
  • Permissioned Blockchain: Only Selected nodes(validators, e.g. Government or trusted nodes) participate in consensus procedure e.g. Hyperledger Blockchain

Smart Contract

Privacy and Anonymity in Internet of Value

  • Pseudonymity: Public keys must not reveal real identities.
    Transactions must not reveal real identities.
  • Unlinkability: It is not possible to link different pseudonyms of a real identities.
  • Anonymity = Pseudonymity and Unlinkability
  • Privacy is provided by encrypting the application data.

Future applications of Blockchain

  • Supply Chain Management
  • Identity Management

SCM without Blockchain

SCM with Blockchain