Lecture Notes: Blockchain Technology

What is a Blockchain?

• Definition: A blockchain is a chain of blocks containing information.
• Origin:
  • Described in 1991 by researchers.
  • Initially aimed to timestamp digital documents and prevent backdating or tampering (similar to a notary).
  • Gained prominence in 2009 when Satoshi Nakamoto used it for Bitcoin.

How Does Blockchain Work?

• Distributed Ledger: Open to anyone and difficult to alter once data is recorded.

Structure of a Block

• Data: Depends on blockchain type (e.g., Bitcoin stores transaction details: sender, receiver, amount).
• Hash: Unique identifier like a fingerprint; changes if block data is altered.
• Previous Block Hash: Links blocks together, forming a chain. This makes the blockchain secure.

Example Chain

• Chain of 3 blocks:
  • Block 3 -> Block 2 -> Block 1 (Genesis block, no previous block)
• Tampering with Block 2 changes its hash and invalidates Block 3 and all following blocks.

Security Mechanisms

Hashing

• Detects changes to blocks.

Proof-of-Work

• Slows down block creation (e.g., Bitcoin: ~10 minutes per block).
• Mitigates tampering by making the recalculating process time-consuming.

Distribution

• Peer-to-peer network without a central entity.
• Each participant gets a full copy of the blockchain and verifies new blocks.
• Consensus mechanism: Valid and invalid blocks are agreed upon collectively.
• Requires control of >50% of the network to tamper successfully, which is highly unlikely.

Advanced Concepts

Smart Contracts

• Programs stored on the blockchain.
• Automate coin exchanges based on specific conditions.
• Will be discussed in depth in a future video.

Applications

• Beyond cryptocurrencies:
  • Medical records storage
  • Digital notary
  • Tax collection

Conclusion

• Blockchains provide a secure, decentralized method to store information and verify its integrity.
• They are constantly evolving with new applications and advancements.
• For practical implementation, a tutorial on creating a simple blockchain in Javascript is available.