mmm84766 / blockchaintutorial

This code repository is meant for a talk at Magic Symposium 2017 in KL, Malaysia on 6th October. My main goal is to explain how a blockchain works and its key concepts. I will refer to this tutorial from time to time in future conversations and talks as well. Feel free to discuss too.

What is a blockchain?

A list of blocks (records) that are linked together using hashes, maintained as a distributed database.

Distributed: Copies of a blockchain stored on multiple computers (nodes)

Decentralised: If one node updates all other nodes, the blockchain is centralised. If any node can update other nodes, it's decentralised. To do this securely, a way to reach consensus is needed, via Proof-of-Work or Proof-of-Stake.

Proof-of-Work/Stake: Algorithm by which nodes in a network achieve distributed consensus.

What constitutes a block in the blockchain?

According to what I've built in this code repo, each block contains timestamp, data (generic), hash of previous block, index and its own hash. See block.rb for details.

What is the role of hash in a block?

A "hash algorithm" is a one-way function that produces a fingerprint or "hash" that is arbitrarily-sized. This can be used to uniquely identify a block's contents. Also, given a block's hash contains the previous block's hash, the security of the block (and preceeding ones) are enhanced, all the way to the genesis block (i.e. first block).

How is a block mined?

Check out persist_block.rb for how I do it, though it's primarily for illustration.

In other blockchains - such as the Bitcoin, Ethereum, Coda, Hyperledger - nodes typically compete against one another to mine a block, using proof-of-work or proof-of-stake to achieve consensus on the winning block.

What kind of blockchains are there?

A blockchain can be public, private, permissioned, permissionless, centralised, decentralised.

All of these are configurations that can be set up based on the network's requirements. For example, an insurance company I know is protoyping a permissioned, private blockchain that involves just 3 entities - regulator, insurance firm, individual - for storing records about individuals' locations that will be accessible for payout in a natural disaster. Participation in this network requires permission and the blockchain is not exposed to the public.

What's next?

I'll be developing this tutorial to build a decentralised, distributed blockchain that uses Proof-of-Work to achieve consensus. What you have so far in this repo is a centralised blockchain - good enough to start separating hype from reality in the news/amidst conversations and doing a bunch of stuff, but I'm planning on much more after getting this far.

In future, I will shift contents into a Wiki and use this README to just provide instructions on how to run the code.

How to run this code?

You can clone it in a local env and run it with the command ruby blockchain_generator.rb.