Blockchain Basics

What is Blockchain?

From a business standpoint, blockchain is a shared ledger, which is replicated across participants in a business network and provides a single version of truth regarding the states and transactions in the network, after proper validation in a trusted environment.

From a technology standpoint, blockchain is a database (with copies of the database replicated across multiple nodes) of transactions (between two or more parties) split into blocks (with each block containing details of the transaction), which are validated by the entire network and added to the chain of prior transactions.

A Blockchain is a cryptographically secured transaction and account database of any digital asset incl. cryptocurrencies (bitcoin), shared by all nodes running the Blockchain system, a giant record book so to speak. A full copy of a Blockchain contains every transaction ever executed in a digital currency and all digital currency account balances and sits on each system node. With this information, one can find out how much value belonged to each account at any point in history, without compromising the account owner’s identity.

The traditional way: Inefficient, Expensive, Error sensitive & Vulnerable

The Blockchain solution: Ensures Consistency, Efficiency, Security & Resilience

Blocks record when, and in what sequence, certain transactions were entered into the database. Blocks are verified using computing-power intensive algorithms and are added by linking to a previous block, to form a linear and chronological chain of blocks – a blockchain.

The 4 Key Concepts of Blockchain

Distributed Shared Ledger

  • Replicated databases (Nodes)
  • Parties identified with public key (anonymised)
  • Resilient for failure of one or more nodes

Cryptography

  • Hashing
  • Public & Private Keys and Wallet
  • Encryption
  • Digital Signature

Consensus

  • Majority of Nodes agree on Validity of Transactions
  • Includes validation of Double spending
  • PoW/PoS for validity

Smart Contracts

  • Hold conditions under which specific actions to be performed
  • Business logic to be assigned to transactions on the blockchain
  • Facilitates Escrow services

Anatomy of a Blockchain

Blockchain is:

A database (with copies of the database replicated across multiple locations or nodes)

  • of transactions (between two or more parties)
  • split into blocks (with each block containing details of the transaction such as the seller, the buyer, the price, the contract terms, and other relevant details)
  • which are validated by the entire network via encryption by combining the common transaction details with the unique signatures of two or more parties. The transaction is valid if the result of the encoding is the same for all nodes
  • and added to the chain of prior transactions (as long as the block is validated). If the block is invalid, a “consensus” of nodes will correct the result in the non-conforming node.

Illustration of how a single block in the blockchain is built and validated
(Source: Goldman Sachs Global Investment Research)

The blockchain ledger is replicated across multiple locations, and each maintains its own copy, which is separately updated based on new transaction data. We show a sequence of three transactions. In the first two transactions, data and signature information are properly validated by all six nodes with matching “hash” values. However for Transaction #3 at Location #5, the hash does not match the others, and will be corrected by the others via "consensus".
(Source: Goldman Sachs Global Investment Research)

Why Should You Care?

  • More and more Digital assets being created everyday
  • Frequency of Cyber-attacks increasing everyday
  • Continuous/Consistent push from the Govt on digitization (Dubai, Russia, Japan, Sweden)
  • Over 90% of large financial institutions are experimenting
  • More and more financial institutions are joining the Consortia
  • You will lose customers, if you don’t move to Blockchain
  • You will operate in a High-Cost environment, in the Short-Medium term (Forget Long-Term) if you don't move to Blockchain
  • And Above all, you will NOT be called “Innovative” and you will NOT have a place at the “High-Table”

Do you really want to risk all these?

Training Courses

Blockchain Familiarization Course

  • Blockchain Introduction
  • Types of Blockchain
  • When do you need a Blockchain Solution
  • Bitcoin and AltCoins
  • Blockchain Governance
  • Use Cases
  • Blockchain Explorer – Demo

Blockchain Technology Course

  • Introduction to Blockchain and Cryptocurrency
  • The Protocol
  • The Network
  • Distributed Ledgers (Public, Permissioned)
  • Wallets and Transactions
  • Validation and Mining
  • Bitcoin and Ethereum Blockchain Demo

CBP Certification

For CBP (Certified Bitcoin Professional) certification, call us for personalized training. To learn more about CBP certification visit - Certified Bitcoin Professional (CBP)