Ahmad Manzoor

Jawad Ahmed

Aamir Ali

PIAIC Blockchain Specialist Program

Blockchain Specialist
Program Lecture-1
Muzammil

Course Objectives
❖ Misconception ❖ Mining a Block
❖ What is Blockchain – The Types of Consensus
Blockchain (Basics)
❖
Basics
❖ Blockchain and
❖ Blockchain Use Cases
Cryptocurrency ❖ Blockchain Adoption
❖ Why Use Blockchain
❖ Web 3.0
❖ Decentralized Networks and
Ledgers ❖ Blockchain
Implementation
❖ Types of Blockchain
❖ How Blocks are Created ❖ Whats Bitcoin
❖ Cryptography and Hashing ❖ How Bitcoin works?
 Misconceptions
❖ Blockchain = Bitcoin
❖ Blockchain can only be used for financial sector
❖ Everyone can see private information on the Blockchain
❖ Smart Contracts have the same legal value as regular
contracts
❖ Blockchain can only be public
Blockchain is backbone of New type of Internet: The
Decentralised Era
❖ The main frames with dumb terminals (1960s) IBM took
the market
❖ The Desktop (1980s) Apple came into market with new
idea
❖ The Internet, all desktops connected (1990s)
❖ Walled Gardens, all powers with big companies
(Facebook, Google, and Amazon)
❖ The Blockchain Era, a decentralised internet (WEB 3.0)
Blockchain is like
Revolution of Web
❖ Web 1.0 (1989 to 2004) - Echo System
❖ Web 1.0 was just a set of static websites with a load of information and no
interactive content
❖ Web 2.0 (2006 to 2016) - Participation and Interaction
❖ The global sharing of information spawned the age of ‘Social Media’.
Youtube, Wikipedia, Flickr and Facebook gave voices to the voiceless and a
means for like-minded communities to thrive.
❖ Web 3.0 (2016+) - Understanding self
❖ Rather than concentrating the power (and data) in the hands of huge
behemoths with questionable motives, it would be returned the rightful
owners.
❖
 Information to Value Blockchain

What is Blockchain? Old Technologies using by Blockchain

❖ In its simplest form, Blockchain is a distributed database, an ❖ Blockchain is a combined use of existing older technology.
unchangeable record (or Ledger) of asset ownership.
❖ Ledger – 7,000 year old technology, triple-entry
❖ Blockchain is primarily defined as a shared immutable ledger, or just accounting
an “unchangeable record of who owns what”
❖ Global, peer to peer, and distributed immutable record of transactions.
❖ Cryptography – “coding messages” has been used for
thousands of years, and still used in complex S/W
❖ Used to transfer and permanently record any change of assets between
algorithms for military and business applications like
two or more parties without intermediaries.
Blockchain
❖ Assets are defined as anything of value that requires accountability of
ownership, i.e. money, cryptocurrency, real estate, records of any kind,
❖ Computer Networking Technology – Blockchain makes
identities, personal property, etc. extensive use of P2P networking architectures
 Blockchain Rules Blockchain Basics
❖ Once something has happened, and we create a record of
that, the fact that it happened never changes
❖ Data written into a blockchain is a historical record and is
immutable
❖ Blockchains have to prove that they haven’t been tampered
with
❖ All the nodes (computers) running on a blockchain must
agree (i.e. have consensus) on ALL the data stored on it
(aka – The World State of the Blockchain)

Blockchain Is Blockchain Is
❖ A record keeping system – of Any Asset

❖ A record keeping system – of Money

❖ to record the transactions of importance (Non-
Monetary)
❖ to record the transfer of “tokens” or “coins”
representing wealth (Monetary/currency)
❖ Update to a medical record

❖ Bitcoin and other cryptocurrencies such as Ether,

❖ Transfer of ownership
LiteCoin, Monero, etc. ❖ Educational certificates on Blockchain
❖ Recording Important single-party announcements
Transferring Assets, Building Value Blockchain Is
❖ An event tracking system
❖ Anything that is capable of being owned or controlled to produce value, is an asset
❖ Two fundamental types of asset
❖ Announcements mark events

❖ Tangible, e.g. a house ❖ Events are actionable

❖ Intangible e.g. a mortgage ❖ Smart Contracts running on the Blockchain allow actions to be taken on
❖ Intangible assets subdivide events/transactions
❖ Financial, e.g. bond ❖ Blockchain is a workflow platform
❖ Intellectual e.g. patents ❖ Now being implemented in financial contracts, manufacturing
❖ Digital e.g. music supply chains, quality tracking, shipping and international
transactions, international currency exchange/transfers. Unlimited
❖ Cash is also an asset
Possibilities!
❖ Has property of anonymity

Blockchain is Immutable? Blockchain Provides Identity

❖ To use the network, you need a Cryptographic Identity
❖ Cannot change the data once it’s committed to the ❖ (similar to an email address)
ledger
❖ If you want to access your email, you need the
❖ Data is auditable password, which functions similarly to a private key
and your public key is like your address (more
❖ Change by issuing offsetting transaction
complicated)
❖ Smart contract code ❖ Authentication: peers sign transactions with their
cryptographic identity, this enables account “ownership”
Consensus in Distributed Networks Blockchain is based on Ledgers
❖ In order to update the ledger, the network needs to come to ❖ Ledgers are Important
consensus using an algorithm
❖ Ledger is THE system of
❖ Consensus: what does it mean to come to consensus on a record for a business
distributed network?
❖ records asset transfer
❖ It means that everyone agrees on the current state (e.g. between participants.
how much money does each account have) and making
❖ Business will have multiple
sure that no one is double-spending money (easy in
ledgers for multiple business
Bitcoin, more complex in Ethereum, business networks)
networks in which they
❖ Consensus methodologies will be discussed a little later. participate.

What is a Ledger? History of ledgers

❖ To understand the Ledger, we need to go back in time
❖ A ledger is like a database, a Google ❖ In 1000 BC, a Small island called Yap Island
or Excel spreadsheet ❖ The Yapese people had a very unique form of
currency called Rai Stones
❖ Add new records by appending
❖ Which is 12’ tall, 8,000lbs!!
rows
❖ Their ownership can be tracked on a ledger (do
❖ Each row contains information not have to be physically traded)
❖ Everyone knew who owned which Rai stone at
❖ Account balances, who owns anytime
certain assets ❖ When two parties wished to transact, the would
Decentralised Ledger
announce their transaction to the tribe (This is
❖ Memory and execution state of a called Consensus)
computer program ❖ When a transaction was announced, all tribe
members updated their mental ledger
Manage the Ledger

Thanks a lot

End of Lecture-1