An Introduction to block chain?

Blockchain- Despite the inherent ‘Block’ in it, the name has traversed more miles than any other
technical term in the recent past. It is echoing in almost all existing IT infrastructures; posing a potential
threat to the very existence of the present establishments. The blockchain is said to be the technology
of future. Here we are trying to simplify the things for all those who wish to understand the technology.
As we indicated in the preface, the book is meant for anyone who wishes to start with blockchain
technology.

We have organized the book into two major sections, while the first section provides the basics of
Blockchain and related terminologies, the second section is purely dedicated to different tools and
technologies that emerged along with blockchain.

First section is further divided into six major topics. Blockchain, Cryptocurrency, Bitcoin, Ethereum,
Hyperledger and Tokens which covers all the basic ingredients for starting with the blockchain
technology. In the first part, which is about blockchain, we have discussed what blockchain, its working
principles, the historical developments, the technical implementations, its application areas and the
possible future of Blockchain. The second topic is about Cryptocurrencies, which is an essential topic
that must be learned before going deep into the famous blockchain protocol Bitcoin. A general overview
of cryptocurrencies as well as their working principles is discussed here. The third topic is about the
most popular blockchain platform- Bitcoin. Here we discussed the topics like bitcoin and its background,
bitcoin working, bitcoin mining, the value of bitcoin etc. In the next topic which is about Ethereum, we
have included the details of another popular blockchain platform – Ethereum. The reader will get an
overview of the second most popular blockchain platform from this section. Ethereum related terms and
terminologies like the smart contract, Solidity, DApp, Etherscripter, Ether etc. are also simplified here.
The fifth topic is about the

ambitious open source project Hyperledger. The project, its objectives, and the products that have
developed under the project etc. are discussed in this section. We have alsoincluded a comparative
study of all of these technologies to give a better understanding. The final topic is exclusively dedicated
to -Tokens, which is a thriving application area of blockchain technology.

Second section of this book doesn’t need much introductory comments, all the topics in the second
section is more or less independent. The section provides information about different blockchain related
tools like wallets, Programming languages and IDEs, Blockchain platforms and development frameworks.
To simplify the things further we have tried to include images, infographics, tips and quick info bars
wherever possible. Moreover, most of the terms and terminologies we used are explained in the
beginning of the book. Make use of all these extra information provided while going through the book
and have a good read.

Terms and Terminologies

Block

Block is used to store the transaction along with their hash value and data

Transaction

Any state change occurred in a blockchain

Smart contract

self executing contract with terms and conditions written in lines of codes

Ledger

Blockchain ledger is used to record the transactions in a blockchain

Token

Digital asset

Cryptocurrency

Digital asset

Bitcoin

Most popular cryptocurrency

Hash

The encrypted value of the data in the block.

SHA256

Hashing Algorithm

Node

Each computer connected to the blockchain network

Solidity

Programming language for writing smart contracts in Ethereum

Blockchain platform

Ethereum

blockchain platform

Baas

Blockchain as a service

ERC20

Ethereum token standard

ICO

Initial coin offering

DApp

Decentralized applications

IoT

Internet of things

PoW

Proof of work

PoS

Proof of stake

Mining

The validation process in a blockchain (in Bitcoin and Ethereum)

Miner

The nodes which perform mining

Wallets

Digital wallet to store, send and receive cryptocurrencies and other digital assets.

Testnet
Test blockchain networks for development and testing purpose

BFT

Byzantine fault tolerance principle.

BIP

Bitcoin improvement proposal

Genesis block

First block in the blockchain

Composer

blockchain development framework in hyperledger fabric

Participants

Those who have an account in the blockchain and performing any transactions.

Peer2Peer(P2P)

Decentralized network architecture. There is no dedicated server in this case

Consensus

General agreement between the participants in the blockchain

Before going into the details of working principles and other aspects of blockchain; let’s look into the
genesis of the technology itself. The conceptual framework behind blockchain was first put forward by a
group of researchers in 1991. The idea was initially intended for time-stamping digital documents such
that backdating them will not be possible thereafter. However, the idea went mostly unused until it was
again mentioned by Satoshi Nakamoto in his white paper “Bitcoin: A Peer-to-Peer Electronic Cash
System”.

It may be the first time in history that the inventor of a game-changing technology has completely gone
anonymous. Satoshi Nakamoto; an anonymous person/group is said to be behind the first blockchain,
which is Bitcoin. Bitcoin is the first blockchain came into existence and it was in 2009. In the following
years, the bitcoin became popular, and the underlying technology became even more popular. So the
confusion and lack of clarity among people start from the origin itself; a product and its related
terminologies went viral before the technology behind it. And when the blockchain displayed its real
potential, people were trying to relate it with the bitcoin terminologies; the result was total
misconception and confusion. But it is the other way; start from blockchain and then try to understand
bitcoin.
Why Block chain

It is another question that must be addressed first before going into the details of the technology. To say
technology is revolutionary; obviously, it must have a lot of advantage over existing technologies. Here
are some advantages of blockchain over existing systems of different domains. Blockchain is:

 Decentralized
 Distributed
 Secure and Faster
 Transparent and Immutable

The features can be understood well if we look the data structure, data distribution, data validation
(Authentication of a piece of data in blockchain) and other related terminologies of blockchain.

The Structure of Block chain

According to IBM, blockchain is a shared, distributed ledger that facilitates the process of recording
transactions and tracking assets in a network. The asset may be a tangible asset like property, house,
vehicle or an intangible asset like digital currency, intellectual property rights, etc. Basically, it stores
Data, and records its movements in a distributed environment. Let’s look into its details.

It is a distributed database or a public registry that keeps details of assets and its
movements/transactions across a P2P network. Each transaction will be secured through cryptography
and later all the transaction history will be grouped and stored as blocks of data. Then the blocks are
linked together with cryptography and secured from modification. The whole process will create an
unforgeable, and immutable record of the transactions that happened across the network. Additionally,
this blocks of records are copied to every participating computer in the network, so everyone will have
access to it. The great advantage of blockchain is that it can store any kind of asset, its ownership
details, history of the ownership and location of assets in the network. Whether it is the digital currency
bitcoin, or any other digital assets like a certificate, personal information, a contract, title of ownership
of IP, even the real-world objects.

The powerful feature of Blockchain is that we can create a shared reality across non-trusting entities.
That is all of these participating nodes in the network do not need to know each other or trust each
other because each has the

ability to monitor and validate chain for themselves. The irony is that the mutual distrust among
participant is the thing which keeps the blockchain secure and verified.
Data Structure of Blockchain

The data in blockchain is stored as individual blocks, that’s why it is called Blockchain. Just like a linked
list, the Blockchain is a collection of blocks linked together. So what does the block actually contain?
Each block in a blockchain will have the following fields.

Data Hello World

Previous 000000000000000000000000000000000000000000000

Hash
Hash 0000gbh1234rthth7654vffb76543

1) Data: Stores the data

2) Previous hash: Stores the hash of the previous block

3) Hash: Hash value for the current block which can be used to refer this block

As far as the user is concerned the Data field is the most important thing. The actual data (like
transaction details, asset details etc.) are stored in this field. Previous hash will store the hash values of
the previous block (consider it as a link to the previous block), the blocks are connected through this
value.