nt l e

Ge Introduction to Blockchains
Orfeas Stefanos Thyfronitis Litos
PhD in Cryptography and Blockchains
University of Edinburgh
11/10/2019

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Outline
●
Why it works
●
Smart contracts
●
Types, ideas and the future

TM

2
Part I

Why it works, or a Bitcoin primer

3
What is a Blockchain?

●
distributed,
●
append-only,
●
transaction ledger

4
 What is a Blockchain?

Created by Kirman
from the Noun Project

Created by Pablo Rozenberg

from the Noun Project

Created by Kirman Created by Pablo Rozenberg

from the Noun Project

rom the Noun Project

Created by Pablo Rozenberg

from the Noun Project

Created by Pablo Rozenberg

from the Noun Project

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Transactions

Alice Bob
tx
1 BTC 1 BTC

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Transactions

Input Output
Alice Bob
tx
1 BTC 1 BTC

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Transaction Graph

8
Many inputs

9
Many outputs

10
Unspent Transaction Outputs (UTXO)

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Bob has 2 BTC

Bob
1 BTC

Bob
1 BTC
12
Bob pays 1 BTC to Alice

Bob
1 BTC

Bob Bob Alice

1 BTC 1 BTC 1 BTC
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New UTXO

Bob
1 BTC

Alice
1 BTC
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Block

●
Contains

transactions

metadata
●
Has unique parent
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Blockchain

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Blockchain

History of all transactions

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Blockchain

tip
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Mining (a.k.a. writing history)

●
Only valid transactions?
●
Proof of Work? 19
Mining (a.k.a. writing history)

●
Only valid transactions! new tip
●
Proof of Work! 20
Hash function

ε 01

ab 10
bb 11
baa
n-bit
strings integers

21
Hash function
easy
One way: hard
ε 01

ab 10
bb 11
baa
n-bit
strings integers
Collision free: rare
22
Hash function
easy
One way: Bitcoin uses SHA256, e.g.:
hard
ε 01
SHA256( 598324 ) =
ab 10
bb 11
baa 0000000000000000000
d7819fc59c65ca6f3e8f73c
n-bit 6eeadf538aa874a31341fb
strings integers
Collision free: rare
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 Proof of work
def hasProofOfWork(block):
if hasManyLeadingZeroes(SHA256(block)):
return True
return False

Valid blocks need energy

→
can’t spam blocks 24
Forks

25
Forks

Protocol says:
●
Choose longest fork
●
If equal, choose random

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Nice properties

if honest mining power > 50%,

●
Liveness: a new tx will enter the chain
●
Persistence: Old blocks won’t change

Garay, Kiayias, Leonardos. "The bitcoin backbone protocol: Analysis and

applications." Annual International Conference on the Theory and Applications of
Cryptographic Techniques. Springer, Berlin, Heidelberg, 2015. 27
Part II

Smart Contracts: Programmable money

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Remember transactions?

Alice Bob
tx
1 coin 1 coin

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Now add some code!

if (Alice gives 1 coin

Alice and Bob
block height > 10)
then
1 coin give Bob 1 coin 1 coin

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Example 1: Flip a coin

Bob repeat no_operation

1 coin until
(Alice gives 1 coin
and winner
Bob gives 1 coin)

winner = 2 coins
random(Alice, Bob)
Alice give winner 2 coins
1 coin
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Example 1: Flip a coin

Bob repeat no_operation

1 coin until
(Alice gives 1 coin
and winner
Bob gives 1 coin)

winner = 2 coins
random(Alice, Bob)
Alice give winner 2 coins
1 coin
Don’t use this contract in real life! 32
Example 2: King of the Hill

top = 0
king = null
while (true)
if (user gives x coins
and
x > top)
give king top coins
king = user
top = x

Don’t use this contract in real life! 33

Still too hard

A fast way to lose your (and others’)

Smart Contracts: Programmable money
●
Very easy to make mistakes

TheDAO

Parity wallet
●
Smart contract languages not (yet) safe
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Part III
V

Types of blockchains, applications and the future

V Xchain
V TM

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Cryptokitties

Cute kitties that live on Ethereum!

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MakerDao
●
Decentralised stablecoin
●
On Ethereum
●
1 Dai = 1 USD
●
Overcollateralised by floating “Maker”

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Types of blockchains

●
Permissioned vs Permissionless V

●
Proof of Work vs Proof of Stake V

●
Private vs Transparent TM
V

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Scalability issue

: 7 txs/sec
: 20,000 txs/sec
Problem: too much redundancy

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Candidate Solution

Payment Channels! (e.g. Lightning, )

●
1 tx on-chain to open channel
●
Unlimited off-chain txs
●
1 tx on-chain to close channel

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Crosschain transactions

Move coins to another chain

E.g. use bitcoins in Ethereum contracts

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Interconnected blockchains

Specialised blockchains
Separation of duties
Related: Sharding

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Questions?
Credits:
●
Blockchain by Pablo Rozenberg from the Noun Project

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