Block Chain Unit 3:

There are 4 types of blockchain: (5 min enggining)

• Public Blockchain.
• Private Blockchain.
• Hybrid Blockchain.
• Consortium Blockchain.

Let’s discuss each of these topics in detail.

1. Public Blockchain
These blockchains are completely open to following the idea of decentralization. They don’t have
any restrictions, anyone having a computer and internet can participate in the network.
• As the name is public this blockchain is open to the public, which means it is not
owned by anyone.
• Anyone having internet and a computer with good hardware can participate in this
public blockchain.
• All the computer in the network hold the copy of other nodes or block present in the
network
• In this public blockchain, we can also perform verification of transactions or records
Advantages:
• Trustable: There are algorithms to detect no fraud. Participants need not worry about
the other nodes in the network
• Secure: This blockchain is large in size as it is open to the public. In a large size,
there is greater distribution of records
• Anonymous Nature: It is a secure platform to make your transaction properly at the
same time, you are not required to reveal your name and identity in order to
participate.
• Decentralized: There is no single platform that maintains the network, instead every
user has a copy of the ledger.
Disadvantages:
• Processing: The rate of the transaction process is very slow, due to its large size.
Verification of each node is a very time-consuming process.
 • Energy Consumption: Proof of work is high energy-consuming. It requires good
computer hardware to participate in the network
• Acceptance: No central authority is there so governments are facing the issue to
implement the technology faster.
Use Cases: Public Blockchain is secured with proof of work or proof of stake they can be used to displace
traditional financial systems. The more advanced side of this blockchain is the smart contract that enabled
this blockchain to support decentralization. Examples of public blockchain are Bitcoin, Ethereum.

2. Private Blockchain
These blockchains are not as decentralized as the public blockchain only selected nodes can
participate in the process, making it more secure than the others.
• These are not as open as a public blockchain.
• They are open to some authorized users only.
• These blockchains are operated in a closed network.
• In this few people are allowed to participate in a network within a
company/organization.
Advantages:
• Speed: The rate of the transaction is high, due to its small size. Verification of each
node is less time-consuming.
• Scalability: We can modify the scalability. The size of the network can be decided
manually.
• Privacy: It has increased the level of privacy for confidentiality reasons as the
businesses required.
• Balanced: It is more balanced as only some user has the access to the transaction
which improves the performance of the network.
Disadvantages:
• Security- The number of nodes in this type is limited so chances of manipulation are
there. These blockchains are more vulnerable.
• Centralized- Trust building is one of the main disadvantages due to its central nature.
Organizations can use this for malpractices.
• Count- Since there are few nodes if nodes go offline the entire system of blockchain
can be endangered.
Use Cases: With proper security and maintenance, this blockchain is a great asset to secure information
without exposing it to the public eye. Therefore companies use them for internal auditing, voting, and asset
management. An example of private blockchains is Hyperledger, Corda.
3. Hybrid Blockchain
It is the mixed content of the private and public blockchain, where some part is controlled by
some organization and other makes are made visible as a public blockchain.
• It is a combination of both public and private blockchain.
• Permission-based and permissionless systems are used.
• User access information via smart contracts
• Even a primary entity owns a hybrid blockchain it cannot alter the transaction
Advantages:
• Ecosystem: Most advantageous thing about this blockchain is its hybrid nature. It
cannot be hacked as 51% of users don’t have access to the network
• Cost: Transactions are cheap as only a few nodes verify the transaction. All the nodes
don’t carry the verification hence less computational cost.
• Architecture: It is highly customizable and still maintains integrity, security, and
transparency.
• Operations: It can choose the participants in the blockchain and decide which
transaction can be made public.
Disadvantages:
• Efficiency: Not everyone is in the position to implement a hybrid Blockchain. The
organization also faces some difficulty in terms of efficiency in maintenance.
 • Transparency: There is a possibility that someone can hide information from the user.
If someone wants to get access through a hybrid blockchain it depends on the
organization whether they will give or not.
• Ecosystem: Due to its closed ecosystem this blockchain lacks the incentives for
network participation.
Use Case: It provides a greater solution to the health care industry, government, real estate,
and financial companies. It provides a remedy where data is to be accessed publicly but needs
to be shielded privately. Examples of Hybrid Blockchain are Ripple network and XRP token.

4. Consortium Blockchain
It is a creative approach that solves the needs of the organization. This blockchain validates the
transaction and also initiates or receives transactions.
• Also known as Federated Blockchain.
• This is an innovative method to solve the organization’s needs.
• Some part is public and some part is private.
• In this type, more than one organization manages the blockchain.
Advantages:
• Speed: A limited number of users make verification fast. The high speed makes this
more usable for organizations.
• Authority: Multiple organizations can take part and make it decentralized at every
level. Decentralized authority, makes it more secure.
• Privacy: The information of the checked blocks is unknown to the public view. but any
member belonging to the blockchain can access it.
• Flexible: There is much divergence in the flexibility of the blockchain. Since it is not a
very large decision can be taken faster.
Disadvantages:
• Approval: All the members approve the protocol making it less flexible. Since one or
more organizations are involved there can be differences in the vision of interest.
• Transparency: It can be hacked if the organization becomes corrupt. Organizations
may hide information from the users.
• Vulnerability: If few nodes are getting compromised there is a greater chance of
vulnerability in this blockchain
Use Cases: It has high potential in businesses, banks, and other payment processors. Food
tracking of the organizations frequently collaborates with their sectors making it a federated
solution ideal for their use. Examples of consortium Blockchain are Tendermint and Multichain.
(Ref: https://www.geeksforgeeks.org/types-of-blockchain/ )

Bitcoin
A virtual currency called Bitcoin was created to serve as money and a means of payment
independent of any one person, organisation, or entity, eliminating the need for third parties to be
involved in financial transactions.
It is available for purchase on numerous platforms and is given to blockchain miners as reward for
their efforts in verifying transactions.
In August 2008, the domain name Bitcoin.org was registered. In 2009, a developer or group of
developers going by the pseudonym Satoshi Nakamoto released Bitcoin to the general world.
Since then, it has grown to be the most well-known cryptocurrency worldwide. Many additional
cryptocurrencies have been created as a result of its success.
Block 0 the very first Bitcoin block was mined on January 3, 2009. This is also referred to as the
"genesis block"
Blockchain Technology for Bitcoin
A blockchain and the network needed to power it include cryptocurrency. A distributed ledger, or
blockchain, is a shared database that stores data. The blockchain uses encryption to protect the
data inside.
On the blockchain, when a transaction occurs, data from the previous block is transferred to a new
block with the new data, encrypted, and the transaction is validated by validators, or miners, in the
network.
Security of Bitcoins
The US National Security Agency's SHA-256 algorithm provides a framework for the cryptography
used by bitcoin.
It is very difficult to crack this since there are 2256 times as many potential private keys as there
are atoms in the universe

Ethereum- (5 min engineering)

- Ethereum is a platform that enables the creation of decentralised apps and organizations as well
as asset keeping. trading, and communication.
- You retain control over your own data and what is shared, so using Ethereum doesn't need you
to give up all of your personal information.
- Ether, an Ethereum-specific cryptocurrency, is used to pay for some services on the Ethereum
network.
- 2013 have seen the creation of Ethereum by programmer VitalikButerin.
- Gavin Wood, Charles Hoskinson, Anthony Di Iorio, and Joseph Lubin were other Ethereum
founders.
- Crowdfunding for development work started in 2014, and on July 30, 2015, the network
launched. Anyone may publish permanent and unchangeable decentralised applications on
Ethereum, allowing users to communicate with them.
- Ethereum is a decentralised blockchain platform that creates a peer-to-peer network for safely
executing and validating smart contract application code. Participants can do business with one
another using smart contracts without the need for a reliable central authority.
- The vast user base of Ethereum encourages programmers to release new apps on the network,
thus solidifying Ethereum as the go-to platform for decentralised applications like DeFi and NFTS.
Decentralized Finance (DeFi)
Developed on top of blockchain networks, DeFi is a network of financial apps. Developers can
create payment apps , trading platforms using DeFi.
Non-Fungible Tokens (NFTs)
NFTs are one-of-a-kind, indivisible digital tokens that may be used to demonstrate the origin of
valuable assets, whether they be digital or physical.

Hyperledger
- It is an open-source platform for building distributed ledger solutions, with a modular
architecture that delivers high degrees of confidentiality, flexibility, resiliency, and scalability.
-Hyperledger is an open source project created to support the development of blockchain-based
distributed ledgers. Hyperledger consists of a collaborative effort to create the needed
frameworks, standards, tools and libraries to build blockchains and related applications.
- This enables solutions developed with this platform to be adapted for any industry. This is a
private and confidential blockchain framework managed by the Linux Foundation.
- Hyperledger is limited access or allowed blockchain network. This is highly secured and
confidential. The organizations or individuals having the Certificate of Authorization can only view
all the transactions on the network.
- Hyperledger fabric is governed by the Linux Foundation. IBM is also one of the major contributors
to this framework. It is a product of the massive collaboration of these two companies which turned
out to be a huge success.
-In Hyperledger Go is widely used to write the chaincode along with that some extent of Java and
JavaScript are also used.
Hyperledger provides :
• Frameworks
1. Hyperledger Burrow : Permissioned Ethereum smart contract node which handles transactions
and execute smart contract on EVM (Ethereum virtual machine)
 2. Hyperledger Fabric : framework for creating different blockchain based products services and
programmes for commercial usage.
• Tools & libraries
1. Hyperledger Explorer : it is dashboard utility that allows for monitoring, searching, and
maintenance of blockchain
2. Hyperledger Cello : Offers an on-demand “as-a-service” deployment mechanism for using
blockchain .(i.e. Blockchain-as-a-Service)

What Is IOTA? (5 min engineering

- IOTA (MIOTA) is a distributed ledger designed to record and execute transactions between machines and devices
in the Internet of Things (IoT) ecosystem.
- IOTA uses a cryptocurrency known as MIOTA to account for transactions in its network. IOTA’s key innovation
is Tangle, a system of nodes used for confirming transactions.
- IOTA claims that Tangle is faster and more efficient than typical blockchains used in cryptocurrencies.
- The IOTA Foundation, the nonprofit foundation responsible for the ledger, has inked agreements with prominent
companies, such as Bosch and Volkswagen, to extend the platform's utility among connected devices.
- IOTA intends to become the standard mode of conducting transactions on devices. Its founders have described the
ledger as a “public permission-less backbone for the Internet of Things that enables interoperability between
multiple devices.”
-In simple terms, this means that it will enable transactions between connected devices, and anyone will be able to
access it.

CORDA (https://www.youtube.com/watch?v=lzW92diwITs&t=354s )
-Corda blockchain is best defined as an open-source that solves business problems by providing
an interoperable blockchain network. Its key features include strict privacy, efficiency, and direct
transactions using smart contract technology.
-It is Private and permissioned blockchain invented by R3 , which is the evolved into ecosystem with
more than 300 members. Including AWS, intel , Microsoft.
Used to do transaction that are financial in nature
- In traditional blockchains , blocks are connected to each other but in corda there are transactions are
connected with each other by storing hash value of previous transaction.
- There is a notary node/nodes in the corda which has all authority to accept or reject the transactions.
When two nodes are doing transactions in the corda then the transaction details are send to notary
nodes if they accept the transaction then only the transactions are completed.
- Corda focuses on Privacy and security as only the nodes which are doing transactions and notary
nodes knows that transactions is done, other nodes are unaware of such transactions.

Proof of work ( https://www.youtube.com/watch?v=FbSlv_kNEL8&t=4s )

-The first algorithm for blockchain network is proof of work. The algorithm adds a new block to the chain
and confirms the transaction.
-In this method, minors (a group of individuals) compete with one another to complete the network
transaction. Mining is the process of competing with one another.
-He is rewarded as soon as miners have successfully produced a valid block. Bitcoin is the most well-
known application of Proof of Work (PoW).
-This blockchain consensus mechanism is used by several blockchain technologies to validate all of their
transactions and add appropriate blocks to the network chain.
-Producing proof of work can be a random process with low probability. In this, a lot of trial and error is
required before a valid proof of work is generated.
-The main idea behind this technology is to readily provide solutions to challenging mathematical
problems.

Bitcoin’s PoW System

-Bitcoin uses the Hashcash Proof of Work system as the mining basis. The ‘hard mathematical
problem’ can be written in an abstract way like below :
“Given data A, find a number x such as that the hash of x appended to A results is a number less than B.”
-The miners bundle up a group of transactions into a block and try to mine. To mine it, a hard mathematical
problem has to be solved.
-This problem is called the proof of work problem which has to be solved to show that the miner has done
some work in finding out the solution to the problem and hence the mined block must be valid.
-The answer to the problem needs to be a lower number than the hash of the block for it to be accepted,
known as the ‘target hash’.
-A target hash is a number that the header of a hashed block must be equal to or less than for a new
block, along with the reward, to be awarded to a miner.
The lower a target is, the more difficult it is to generate a block.
-A miner continues testing different unique values (known as a nonce(s)) until a suitable one is produced.
-The miner who manages to solve the problem gets the bitcoin reward and adds the block to the blockchain
by broadcasting that the block has been mined.

Common cryptographic protocols used in PoW: The most widely used proof-of-work consensus is
based on SHA-256 and was introduced as a part of Bitcoin. Others include Scrypt, SHA-3, scrypt-jane,
scrypt-n, etc.

Challenges With PoW

The Proof-of-Work consensus mechanism has some issues which are as follows:
• The 51% risk: If a controlling entity owns 51% or more than 51% of nodes in the network, the
entity can corrupt the blockchain by gaining the majority of the network.
• Time-consuming: Miners have to check over many nonce values to find the right solution to
the puzzle that must be solved to mine the block, which is a time-consuming process.
• Resource consumption: Miners consume high amounts of computing power in order to find
the solution to the hard mathematical puzzle. It leads to a waste of precious resources(money,
energy, space, hardware). It is expected that 0.3% of the world’s electricity will be spent to verify
transactions by the end of 2018.
• Not instantaneous transaction: Transaction confirmation takes about 10–60 minutes. So, it is
not an instantaneous transaction; because it takes some time to mine the transaction and add
it to the blockchain thus committing the transaction.

What is Byzantine General’s Problem? (https://www.youtube.com/watch?v=VJL-YtOhWUQ )

In 1982, The Byzantine General’s Problem was invented . It is basically a game theory problem that
provides a description of the extent to which decentralized parties experience difficulties in reaching
consensus without any trusted central parties.
• The Byzantine army is divided into many battalions in this classic problem called the Byzantine
General’s problem, with each division led by a general.
• The generals connect via messenger in order to agree to a joint plan of action in which all
battalions coordinate and attack from all sides in order to achieve success.
• It is probable that traitors will try to sabotage their plan by intercepting or changing the
messages.
• As a result, the purpose of this challenge is for all of the faithful commanders to reach an
agreement without the imposters tampering with their plans.
Byzantine Fault Tolerance (BFT)
The Byzantine Fault Tolerance was developed as inspiration in order to address the Byzantine General’s
Problem. The Byzantine General’s Problem, a logical thought experiment where multiple generals must
attack a city, is where the idea for BFT originated.
• Byzantine Fault Tolerance is one of the core characteristics of developing trustworthy blockchain
rules or features is tolerance.
• When two-thirds of the network can agree or reach a consensus and the system still continues
to operate properly, it is said to have BFT.
• Blockchain networks’ most popular consensus protocols, such as proof-of-work, proof-of-stake,
and proof-of-authority, all have some BFT characteristics.
• In order to create a decentralized network, the BFT is essential.
-The consensus method determines the precise network structure. For instance, BFT has a leader as well
as peers who can and cannot validate.
-In order to maintain the sequence of the Blockchain SC transactions and the consistency of the global
state through local transaction replay, consensus messages must pass between the relevant peers.
-More inventive approaches to designing BFT systems will be found and put into practice as more
individuals and companies investigate distributed and decentralized systems. Systems that use BFT are
also employed in sectors outside of blockchains, such as nuclear power, space exploration, and aviation.
How Bitcoin Solves the Byzantine General’s Problem?
Blockchain is a public, distributed ledger that contains the records of all transactions. If all users of the
Bitcoin network, known as nodes, could agree on which transactions occurred and in what order, they could
verify the ownership and create a functioning, trustless money system without the need for a centralized
authority. Due to its decentralized nature, blockchain relies heavily on a consensus technique to validate
transactions.
Proof Of Work: The network would have to be provable, counterfeit-resistant, and trust-free in order
to solve the Byzantine General’s Problem. Bitcoin overcame the Byzantine General’s Problem by
employing a Proof-of-Work technique to create a clear, objective regulation for the blockchain.

Proof of Stake ( https://www.youtube.com/watch?v=ytlWyqVi0vA )

Proof of Stake (PoS) is a type of algorithm which aims to achieve distributed consensus in a Blockchain.
Why Proof-of-Stake:
Before proof of stake, the most popular way to achieve distributed consensus was through Proof-of-Work
(implemented in Bitcoin). But Proof-of-Work is quite energy(electrical energy in mining a bitcoin)
intensive. So, a proof-of-work based consensus mechanism increases an entity’s chances of mining a
new block if it has more computation resources.
What is Proof-of-Stake:
As understandable from the name, nodes on a network stake an amount of cryptocurrency to become
candidates to validate the new block and earn the fee from it. Then, an algorithm chooses from the pool
of candidates the node which will validate the new block. This selection algorithm combines the quantity
of stake (amount of cryptocurrency) with other factors (like coin-age based selection, randomization
process) to make the selection fair to everyone on the network.
• Coin-age based selection:
The algorithm tracks the time every validator candidate node stays a validator. The older the
node becomes, the higher the chances of it becoming the new validator.
• Random Block selection:
The validator is chosen with a combination of ‘lowest hash value’ and ‘highest stake’. The
node having the best weighted-combination of these becomes the new validator.

A typical PoS based mechanism workflow:

1. Nodes make transactions. The PoS algorithm puts all these transactions in a pool.
2. All the nodes contending to become validator for the next block raise a stake. This stake is
combined with other factors like ‘coin-age’ or ‘randomized block selection’ to select the
validator.
3. The validator verifies all the transactions and publishes the block. His stake still remains
locked and the forging reward is also not granted yet. This is so that the nodes on the network
can ‘OK’ the new block.
4. If the block is ‘OK’-ed, the validator gets the stake back and the reward too. If the algorithm is
using a coin-age based mechanism to select validators, the validator for the current block’s
has its coin-age reset to 0. This puts him in a low-priority for the next validator election.
 5. If the block is not verified by other nodes on the network, the validator loses its stake and is
marked as ‘bad’ by the algorithm. The process again starts from step 1 to forge the new block.
Advantages of PoS:
• Energy-efficient:
As all the nodes are not competing against each other to attach a new block to the blockchain,
energy is saved. Also, no problem has to be solved( as in case of Proof-of-Work system) thus
saving the energy.
• Decentralization:
In blockchains like Bitcoin(Proof of Work system to achieve distributed consensus), an extra
incentive of exponential rewards are in place to join a mining pool leading to a more
centralized nature of blockchain. In the case of a Proof-of-Stake based system(like Peercoin),
rewards are proportional(linear) to the amount of stake. So, it provides absolutely no extra
edge to join a mining pool; thus promoting decentralization.
• Security:
A person attempting to attack a network will have to own 51% of the stakes(pretty expensive).
This leads to a secure network.
Proof of Elapsed Time (https://www.youtube.com/watch?v=6tQtjbxAlQM )
-Proof of elapsed time (PoET) is a consensus mechanism often used on permissioned blockchain networks
to decide the mining rights or the block winners on the network.
-It prevents high resource utilization and energy consumption; it keeps the process more efficient by
following a fair lottery system.
How Does PoET Work?
-Based on the principle of a fair lottery system where every node is equally likely to be chosen, the PoET
mechanism spreads the chances of winning across the largest possible number of network participants.
-Under PoET, each participating node in the network must wait for a randomly chosen period; the first to
complete the designate
d waiting time wins the new block. Each node in the blockchain network generates a random wait time and
sleeps for that specified duration.
-The one to wake up first—that is, the one with the shortest wait time—wakes up and commits a
new block to the blockchain, broadcasting the necessary information to the whole peer network. The same
process then repeats for the discovery of the next block.
-Proof of elapsed time uses much less energy than proof of work since it randomly selects a node instead
of using all the miners on a network in a competition.

Proof of Burn( https://www.youtube.com/watch?v=9OnGx24V9mY )

-With PoB, instead of investing in expensive hardware equipment, the validators follow the following
approach:
• They burn coins by sending them to an address from where they are irretrievable.
• By committing the coins to an unreachable address, validators earn a privilege to mine on the
system based on a random selection process.
• Thus, burning coins means that validators have a long-term commitment in exchange for their
short-term loss.
• Depending on how the PoB is implemented, miners may burn the native currency of the
Blockchain application or the currency of an alternative chain, such as bitcoin.
• The more coins validators burn, the better are their chances of being selected to mine the next
block.
-While PoB is an interesting alternative to PoW, the protocol still wastes resources needlessly.
-Now the question is why do we need to burn the coin? The basic explanation for this is that by destroying
the currency, the consumer is displaying a big commitment to the currency by foregoing a narrow profit in
exchange for a long-term profit.
Advantages of PoB:
• It required very little power compared to PoW.
• It reduces energy consumption by wasting insignificant resources when coins are burned.
• It encourages long-term involvement in a project as a consumer is displaying a big commitment
to the currency by foregoing a narrow profit in exchange for a long-term profit.

Disadvantages Of PoB:
• It is risky because one doesn’t know that will they gain the wealth they have burnt in the future
or not.
 • As coins are burnt, so technically if we see then resources are wasted.
• It may suffer from rich getting richer phenomena. In which those who are wealthy are getting
wealthier by having more coins.

What Is Proof-of-Activity (PoA)?

-Proof-of-activity (PoA) is a blockchain consensus algorithm used in cryptocurrencies and similar systems.
It is used to ensure that all transactions occurring on the blockchain are genuine, as well as to ensure that
all miners arrive at a consensus. PoA is a combination of two other blockchain consensus
algorithms: proof-of-work (PoW) and proof-of-stake (PoS).
-With a PoW system, a miner can mine or validate transactions based on the amount of effective work
they have already contributed to the blockchain.
-As energy and hardware costs spiraled upwards, as a result of increased mining difficulty in PoW
networks, the PoS system emerged as an alternative.
-With a PoS system, a miner's ability to mine or authenticate transactions depends on how many
cryptocurrency coins they hold.
-Both PoW and PoS systems are intended to prevent the likelihood of a 51% attack—a situation where a
group of participants gains control of more than half the network's mining computing power.
BT Unit 4
Cryptocurrency :
-Cryptocurrency is a kind of digital asset that enables safe transactions using distributed ledger, or
blockchain technology.
-Despite the widespread misunderstanding of the technology, several central banks are considering
introducing their own domestic cryptocurrency.
-Since 1998, the concept of "cryptocurrencies" has been discussed.
-B-Money and Bit Gold were the first known attempts to create a digital cryptocurrency, but neither
proved successful.
-Digital or virtual currencies that operate on cryptographic principles are known as cryptocurrencies.
-As implied by the name, they are not substantial or have no actual presence.
- They are essentially a collection of Computer programming codes but offers greater usefulness and
security than many current currencies.
-Each user on certain blockchain will have account with distinct address or ID. Currency is debited and
credited in that account.
-there are various wallets available that provides accounts . such as MetaMask , Coinbase , Binance.
- Bitcoin is one of the most well known cryptocurrency.
Benefits :
• Compare to current banking system cryptocurrencies allow extremely quick transactions
• Performed using cryptocurrency are completely anonymous
• There are no payment restrictions
• Are among the safest payment methods on the market right now
• Immediate availability of assets.
Drowbacks
• Understanding cryptocurrency takes time and effort.
• Cryptocurrencies can be an extremely volatile investment.(Price rapidly changes)
• Crypto has serious scalability issues
• Government can ban cryptocurrency.
• Every individual is responsible for their own Security of assets.

Bitcoin ( covered in unit 3 )

Digital Tokens (https://www.youtube.com/watch?v=0qplGqRlU98 )

-Digital tokens, simply known as "Tokens," are another market-shaking blockchain-based technology that
is trending. Tokens are a digital asset that are developed on top of cryptocurrencies of a blockchain
network. They are a minor variation of cryptocurrencies.
-The token may be used for a variety of things, including granting rights, paying for services, transferring
data, offering incentives, getting access to further services, and many more. To put it another way, a
token can be utilized anyway the developer or creating company sees fit.
-The tokens are a digital asset that is less liquid than a cryptocurrency and will never be utilised as one.
Therefore, the value of every token that is produced will likewise be specified.
-The tokens may be refundable under specific circumstances, allowing us to trade them for
cryptocurrencies. Wallets are used to maintain tokens, just like they are with cryptocurrencies.
- Most tokens are now produced on the Ethereum network. It is easy to create tokens using the
Ethereum network.

Types of Cryptocurrencies
-Despite the fact that Bitcoin was the first cryptocurrency in use by the general public, there are many
different types of cryptocurrencies.
-Depending on its formulation or code design, applications or use case, and other characteristics,
cryptocurrencies into different types.

(1) Coins: As coins are based on their blockchain, they may be distinguished from altcoins. Bitcoin on the
Bitcoin blockchain and Ether, or ETH, on the Ethereum blockchain are two good examples. Building or
creating a cryptocurrency begins with or follows the creation of a blockchain.
(2) Altcoins: They are viewed as alternatives to Bitcoin, the original cryptocurrency, even if they may all
be considered coins. Also known as shitcoins, apart from Ethereum, most of the first ones were forked
from Bitcoin. These include Namecoin, Peercoin, Litecoin, Dogecoin, and Auroracoin.

(3) Tokens: In a blockchain, tokens serve as digital representations of specific assets or utilities.Tokens
are. essential to getting a true grip on cryptocurrencies. They're the amount of digital resources you
control on a given platform. As mentioned before, a digital wallet stores them and accessed with a key,
which can be reassigned to someone else.

(4) Bitcoin: The king of the castle. Created in 2008, it housed the original code for blockchain technology.
Its creation spurred many other cryptocurrencies. It's easily the most trusted and known virtual currency
on the market, even if it has its flaws.

(5) Ethereum
Probably the second most well-known cryptocurrency. It allows users to do more than just use it as a
virtual currency. It's an open-source blockchain. Money and assets are quickly transferred with the use of
smart contracts. Assets include houses, cars, stocks, and other property owned with real-world value.

(6) Litecoin: One of the first cryptocurrencies to emerge after Bitcoin's initial release. It has a much
shorter processing time-about 2.5 minutes-than Bitcoin's crazy 10-minute timeframe. Litecoin provides
more tokens and a different mining algorithm, but it ultimately didn't take off the same way its big brother
did.

(7) Ripple: Because every single token was mined before its release, it is quite possibly the most
despised cryptocurrency by the community. This action is known as pre-mining and is a huge no-no.
Essentially, this takes away the community aspect of virtual currencies. It attempts to take a
decentralized platform and centralize it.

(8) Monero: Solved many of Bitcoin's privacy issues. It adds an additional level on anonymity to
transactions. A few darknet markets (networks that require specific software or authorization to access
them) started accepting the cryptocurrency in 2016, where it ultimately reached its peak.

Crypto wallets
People dealing with cryptocurrency use a wallet as a safe depository and an instrument for incoming and
outgoing payments. Let's analyze the available types of wallets and choose the most suitable one based
on your computer's resources and tasks.
There are hot and cold wallets.Cold wallets are used to store money, while hot wallets are used to send
and receive the currency quickly.
As a rule, a wallet has a Private key and a Public key. The Private key belongs only to you, and you
should never show it to anyone.You must keep it in mind as you sign all transactions with this key. At the
same time, someone can use public keys to transfer money to your account.

METAMASK (https://www.youtube.com/watch?v=ts3mIcfnD9s )

-MetaMask is a web browser add-on which enables anyone to run the Ethereum DApps without running the
Ethereum full node.
- An Ethereum full node installation will take a lot of memory as well as time; so Metamask is a tool that eliminates
the overburden of this hectic installation task. Initially, Metamask was available only for Google Chrome, but now it
is available for Firefox and other popular web browsers.
-MetaMask add-on for chrome can be added from chrome web store or from 'metamask.io' website. This MetaMask
add-on provides a user interface for interacting with the blockchain.
-The user can connect to the Ethereum main network or 'test net' or he may create his own private network and run
DApps on the blockchain.
Wallet Seed
The Metamask will provide a group of 12 words known as "wallet seed" while installing it. It is the user credential
and it must be stored somewhere safe. The users can also create passwords for their account. The wallet seed or the
password is necessary to log in to the MetaMask.
MetaMask Transactions
-The Metamask user interface has a default buy and send option for buying and sending Ether. The user can access
his wallet, buy or send ether, check his balance and transactions from this interface.
-When the user executes a transaction from the Metamask it will send the transaction to the respective blockchain
network.

COINBASE

-Coinbase is a trading platform that allows users to buy, sell and store more than 30 different digital currencies.
-Coinbase is more geared towards beginners while Coinbase Pro, the premium service, is for avid and experienced
traders who make high volume transactions and want more trading options.
-The platform is straightforward. Like many trading apps, users can see their balance and a watch list, which allows
them to track the prices of different kinds of cryptocurrencies.
-Traders can also check which cryptocurrencies are the biggest movers. Coinbase Cardis also introduced, that users
can use to earn rewards for spending the assets in their portfolio.
-Coinbase charges a fee for trading via the platform. Coinbase doesn't charge users to hold their assets in a digital
wallet or to transfer cryptocurrency from one wallet to another within the Coinbase network, like from Coinbase to
Coinbase Pro.
-Once you have your digital wallet set up, users can trade. Coinbase does not offer trading for all cryptocurrencies,
but the exchange does regularly add new coins.
Unit 6 : BC Applications
PROMINENT BLOCKCHAIN APPLICATIONS
-Blockchain is most promising and trustworthy distributed database technology implemented in various applications.
-A blockchain is essentially a distributed database of records or public ledger of all transactions ordigital events that
have been executed and shared among participating parties.
-As it is discussed in previous chapters, Blockchain technology has become an active area of research and a
technological option form any businesses and industrial communities.
-With its distributed, decentralized, and trust less nature, blockchain can provide businesses with new opportunities
and benefits through increased efficiency, reduced costs, enhanced integrity and transparency, better security, and
improved traceability .

Blockchain in Retail, Banking and Financial Services

-For the banking and financial services markets, the Blockchain technologies provide various attractive features.
-Financial institutions and banks no longer see blockchain technology as threat to traditional business models.
-The world's biggest banks are in fact looking for opportunities in this area by doing research on innovative blockchain
applications.
-Blockchain is technology decentralized, as a result, customer trust moves from humans to computers. Blockchain
smart contract solutions are going to challenge the financial, legal and government sectors. With distributed ledger
technology, smart contracts may automatically and in real-time track the performance of legal transactions.
Private Securities
-It is very expensive to take a company public. A syndicate of banks must work to under write the deal and attract
investors.
-The stock exchanges list company shares for secondary market to function securely with trades settling and clearing
in a timely manner.
-It is now theoretically possible for companies to directly issue the shares via the blockchain.
-These shares can then be purchased and sold in a secondary market that sits on top of the blockchain.
Some examples are as follows:
(1) Medici is being developed as a securities exchange that uses the Counterparty implementations of Bitcoin 2.0. The
goal here is to create a cutting-edge stock market.
(2) Block stream is an open-source project with focus on side chains-interoperable blockchains-to avoid
fragmentation, security and other issues related to alternative crypto- currencies.

Insurance
-Traditional insurance policies are often processed on paper contracts, which means claims and payments are error-
prone and often require human supervision.
-Compounding this is the inherent complexity of traditional insurance, which are consumers, brokers, insurers and
reinsurers, as well as insurance's main Product risk.
-As a kind of distributed ledger of the blockchain, it improves insurance industry efficiency from four respects: fraud
elimination, claims automation, data analysis with the Internet of Things (IoT), and Reinsurance.
-Assets which can be uniquely identified by one or more identifiers which are difficult to destroy or replicate can be
registered in blockchain.
-This can be used to verify ownership of an asset and trace the transaction history. Any property (physical or digital)
can potentially be registered in blockchain and the ownership, transaction history can be validated by insurers.

Blockchain in Government Sector

-Blockchain technology plays a vital role in the development of social and governmental activities for e-governance.
-In the current system, data such as employee IDs are stored in B centralized database with multiple duplicate servers.
-However, this centralized system suffers from many cyber attack issues, such as denial of service (DoS) and distributed
denial of service (DDoS).
-Blockchain technology can initialize many flexible services, such as voting records, property registrations, patent
exchanges, criminal records, and licenses for driving and other activities.
1)Individual Identity
-In the traditional system, personal records are stored separately in different systems, such as an employment file,
educational file, and business file.
-This problem can be solved by using blockchain technology, where information about a person is permanently
recorded at a single point in time and can be made available for anyone, or any institution, that wants it.
-With the help of a blockchain-based digital identity, records of refugees and immigrants can be verified by anyone in
any location.

2)Land and Property Registry

-Ownership of property, such as a house or land, can be transferred using a blockchain-based smart contract.
-The rules of the transaction are maintained by the smart contract. The buyer keeps the total cost of the property in
the blockchain and distributed system.
-Then, the seller can receive the transferred money, and this transaction is confirmed before the property is handed
over.
-After that, the registration of the property is updated in the blockchain.
-For example, the valid owner of a lost car can be found by viewing the car's transaction history in the ledger.
3)Birth and Marriage Certificates
-Some vital records such as birth, marriage, and death certificates can be permanently stored using blockchain
technology.
-This ensures that the total number of citizens listed in the automated system cannot be changed.

4)Vehicle Registrations
-If someone wants to buy a used car, its mileage record scan be analyzed by its vehicle identification number (VIN)using
blockchain technology.
-Because the mileage and history records of the car are permanently stored, the seller cannot cheat the buyer.

5)Electronic Voting System

-Electronic voting systems are used to reduce the costs of conducting elections , for maintaining the fairness , safety,
privacy, and regulation.
-A modern blockchain-based electronic voting system that discusses some of the existing system drawbacks and
evaluates certain of the common blockchain technologies for creating an e-voting system based on blockchain.
-The system is decentralized and does not depend on self-belief. Each voter registered will be able to vote via any
Internet- connected device.

Blockchain in Healthcare
-Blockchain has reached the healthcare industry with a rising acceptance rate. Also, in the early stages,
people in the health ecosystem accept the technologies favourably.
-Blockchain technology has proven to be a reliable solution for a variety of issues in the healthcare industry,
including data breaches and counterfeit drugs.
Providing Accommodation in a Variety of Sectors
-Blockchain can operate as a link across major healthcare industries such as hospitals, laboratories, and
pharmacies, allowing data to be shared in a secure environment.
-Diagnostic records, previous treatments, current prescriptions, and insurance claims make up the majority
of the shared data.

Improved Patient treatment that is Faster, Less Expensive and More Effective
-Blockchain has the potential to build a single system for storing and retrieving health records in a secure
and timely manner by authorized users.
-Innumerable mistakes can be avoided, faster diagnoses and interventions are possible, and care can be
individualized to each patient by eliminating miscommunication between different healthcare personnel
involved in caring for the same patient.

Insurance and Supply Chain Settlements using Smart Contracts

-Many companies offer blockchain-based systems that allow pharmaceutical companies, medical device
OEMs, wholesalers, insurers, and healthcare providers to authenticate their identities as organizations, log
contract details, and track transactions of goods and services, as well as payment settlement details for those
goods and services.
Medical Data Security Assurance
-Pharma corporations invest millions of dollars on drug research and development, but keeping their trade
secrets hidden is possibly even more important.
-If such stores of valuable data were to be leaked to competitors, pharma companies may lose considerable
market share in a relatively short amount of time.
-So Blockchain can help by storing this vital information with maximum security.
Patient-centric electronic health records
-creating a blockchain-based system for medical records that can be linked into existing electronic medical
record software and act as an overarching, single view of a patient’s record.
-It is crucial to emphasize that actual patient data does not go on the blockchain, but that each new record
appended to the blockchain, whether a physician’s note, a prescription or a lab result, is stored.

Blockchain in IOT
-In recent years, IoT-based applications have gained popularity in various fields such as smart cities, healthcare,
education, government, and social applications as it is discussed in previous sections.
-In IoT-based networks, many datasets are available publicly for all users.
-Blockchain is used to guarantee the privacy and integrity of these shared data sets.

Smart City
A smart city is a diverse IoT-based network system that offers several applications and security solutions to citizens.
Smart cities rely on the assembly, analysis, and digitalization of information. Various IOT devices can communicate
and share data when the data stored on Blockchain.

Industrial Sector
Blockchain and IoT have opened numerous new opportunities and provided hope for improved productivity,
efficiency, and transparency in the industrial sector.
IOT generate huge real time data using sensors and Blockchain is used to share among users in the system on real-
time.

Supply Chain
The supply chain is an area in which many business problems occur, such as late deliveries, absent suppliers, and
untrust worthy intermediaries.
There is a lot of paperwork involved in the shipping procedures for supplies. In addition, there are many losses of
supplies and delays in deliveries of them.
These problems can be resolved by using blockchain, which removes the dependency on an intermediary.

Autonomous Vehicle
The autonomous vehicle is an attractive technology that may offer benefits for years to come.
Sensors are attached to vehicles and all their information is captured on the IoT platform, which is connected to a
blockchain.
The data can show when a car needs to be refueled or repaired due to an engine breakdown or other problems.
Because the blockchain keeps a permanent record of each transaction, the trust between the manufacturer and the
consumer increases.

Smart Agriculture
Information and Communication Technology(ICT) plays an important role in improving the technologies of agriculture.
ICT facilitates the e-farming system that promotes business efficiency and performance and reduces ambiguity and
risks.
The aim of e-agriculture is to allow farmers to share knowledge to help farmers become more successful, smarter and
avoid possible risks.
Blockchain will help use and promote this exchange of information.

Blockchain in Energy and Utilities

The energy industry is working on new models and mechanisms to improve its service delivery to customers. Similarly,
consumers favor having new methods to buy energy and understanding the origins of their energy purchased.
Blockchain-based smart contracts can substantially accelerate a significant development in the energy industry,
microgrids.
A microgrid is defined as, the cluster of multiple distributed generators (DGs) that supply electrical energy to
consumers without any shortage.
Instead of the exclusive reliance on a power factory that supplies electricity for a district, a microgrid enables all electric
power consumers to manage their usage and possibly produce and sell energy using solar panels or any other energy
alternative methods.
Residents can sell extraneous energy to other residents or back to the larger grid.
Blockchain can facilitate microgrid-related transactions. Blockchain-based smart contracts enable the application of
power-exchange restrictions and regulations, payments management, and direct interaction between users, without
a centralized microgrid authority.
In supporting unmanned aerial vehicles and connected electric vehicles, an important issue is how to exchange energy.
A blockchain-based energy exchange method has been proposed to support a secure and energy-efficient
transportation system.
Blockchain is used to approve the energy request of EVs in delegated manner.