Crypto Academy / Season 3 / Week 6 - Homework submitted to @stream4u | Let's Open the Blockchain

Hello everyone this is Monz from India and it's good to be here to attend the lecture of season 3 week 6 given by a honorable professor @stream4u in this lecture I will give my best and will try to give each and every details of the questions. It's great to see a professor giving us wonderful lessons one after the other through which we are are getting to know more and more about cryptocurrency markets new applications and development of blockchain.

src
So now let's start the homework without wasting any time

Q1. What is the Blockchain?

Blockchain

Invented in 2008 by a group of people for the purpose of serving as the public transaction ledger of the cryptocurrencies , blockchain can be defined as a system of recording information it is essentially a digital ledger of transactions which is distributed across entire network of computers on the blockchain. Moreover it records the data in decentralized way that it is next to impossible to change or hack the informations stored.

Components involved in the formation of blockchain are blocks which contain data, chains for connecting the block and miners for running the blocks and validating the transactions.

Now let's understand each of the components in details

•blocks In blockchain technology blocks are units or files where the data or an information related to the Bitcoin network and transactions are permanently recorded moreover records all of the recent transactions that has not been yet entered any prior blocks and it is required to pass through the process of validation before it getting added to the existing chains of blockchain. So in a nutshell we can consider block like a page of a ledger or record book

The features of block are : Data of the block, Nonces, Hash , Previous Hash (fixed length alphanumeric numbers that stores the information of the block.) and Meta data.

Nodes in a blockchain technology nodes can be defined as a set of computers connected for or Swift
Functioning of the blockchain. Moreover it stores a complete copy of distributed ledger .
Nodes are used for building blockchain based application by the developers.
It shares date of new blocks with other nodes in the system using peer-to- peer protocol.

Miners minors are people involved in recording every transactions to the blockchain , they are the ones who keeps the record of your payment.
The work of a miner is to validate and secure the network.

---

There are three types of blockchain :

1. Public blockchain- In this blockchain there is no difference between the public and the evaluators. Any of us can download the code and run a public node. Any person can use this from any part of the country. Any if you can read read transaction on public block explorer. The transaction are visible to everyone.
Eg:- bitcoin, dash etc

2. Private blockchain- in this it is very clear within ward private which means personal individual or an Organisation. Not everyone can run a full node and start mining. The transaction which is made can not be seen to everyone.
Only the authorised person gets the visibility of every transaction.
Eg:- MONAX , multichain

3. Federated blockchain or consortium blockchain- in Consortium blockchain is a blockchain in which there different companies of companies or representative which come together and form a group and makes a decision that is best and beneficial for the whole network. These groups are call consortium or Federation. Suppose you have 10 financial companies out of which they have decided in code if a transaction is verified by more than 7 companies then it is added to blockchain.
Example:- r3

2. What are the benefits of blockchain?

2. Some of the the benefits of blockchain are as follows:

Greater transparency:All the transactions are very much transparent and that's the reason why blockchain has the greater transparency. Data can be shared to anyone easily. It is difficult to hack blockchain this is why it's called the most secured one.

Enhanced security:in blockchain not everyone is allowed to blockchain Technology. They cannot see any transaction or records. Only authorised person are allowed into it. All the data is in encrypted form.

Improved traceability:in this you can easily trace the transaction record which is made by you if you have transferred any data you can keep the record of it.

Increase efficiency & speed and reduced cost:with the word itself you get to know that it has good speed and quality is high with low cost.

3. Explain Blockchain Distributed ledger.

Blockchain distributed ledger can be defined as a technology which helps to maintain a database available at various geographical locations , moreover it is consensually shared and are
accessible by multiple people.

A blockchain distributed ledger allows transactions to have public witnesses. Blockchain distributed ledger is highly secure unlike centralised ledger as all the information in distributed ledger is secured by cryptography and the entered data is immutable.
A decentralized blockchain distributed ledger does not require any Central authority to authorise any transactions.

Properties of distributed ledger.

•Maintained users privacy as no KYC required.

•Availability and distribution of data to all the participants.

• security of data on public and hybrid blockchain.

•Tamper evidence as each participant is allowed to detect non-consensual changes.

•Multi-party consensus.

Advantages of distributed ledger:

• A decentralized blockchain and distributed ledger is highly secured unlike centralised blockchain.

• Transparent transactions helps in reducing the the risks of fraudulent.

• Need of third party eliminated.

• provides good transaction speed.

Q4. What Is Blockchain Double Spending and how Bitcoin handles this problem?

Double spending

Double spending is generally threat for digital currency as any digital currency can be spent more than once. In simple words we can say that spending the same amount twice .
Moreover in case of a digital currency unlike paper money or physical cash have a possibility of being copied.

src

Let's take an example and understand it better.

Suppose Mr X goes to a shop and spends $ 7 for
a chocolate and pays in cash . Now the money of rupees 7 dollar is with the shopkeeper and Mr X cannot spend the same money as the money is already with the shopkeeper. The shopkeeper gives a bill of rupees 7 dollar to Mr X for the exchange of a chocolate. But in digital currency if Mr X Make transactions in Bitcoin there are possibilities of transactions being copied and rebroadcasted and your the problem of double spending can arise.

How Bitcoin handles Blockchain Double Spending

Is the Bitcoin blockchain is a distributed ledger, hear the Bitcoin manages the problem of double spending by the implementation of a
confirmation mechanism and maintaining a ledger called “blockchain”.

Moreover blockchain maintains a time-stamped chronological -ordered transaction ledger.

In every 10 minutes a block is added to the ledger and with the help of the nodes of the Bitcoin network a copy of this global ledger is kept.

There is another method of complete spending of UTXO which is an unspent transaction .
Moreover in this method the Bitcoin sends complete UTXO and return the left out amount to the sender's wallet.

Q5.Practical + Theory, Visit Blockchain Demo and check section Blockchain, then explain in detail how Blocks Hashes Work in Blockchain, what will happen when any middle of the block gets changed, try to give screenshot for each possible details.

Here to demonstrate both the theory and practical we will refer to the site

blockchain demo

Hash

Here in this section there is a SHA256 Hash generator

In this section any input feeded generates a hash value , moreover on changing the input the hash value also changes.
To Hash values cannot be the same Which is the property of hash.

Block

Now in the Block section, there are Block number, Nonce, Data and Hash

Here, Block no starts from 1 and the Nonce value is to validate the block and here the hash value of block always starts with 0000 and it changes with data we input .

For this section I haven't entered any data initially but if I enter any data the hash will change And the block becomes red which indicates the invalid block.

The nonce plays an important role here as to validate the block we need to find out the correct value of nonce for a particular data which is indeed very time-consuming to find the correct value as it requires computation power.

So here I clicked mine and quickly It finds out the Nonce value and block become validated.

Here new Nonce value is 49583.

Blockchain
Here in this section there are more than one block and each has Block number , Nonce, Data, Prev block's hash and Block hash.

Block number here starts from 1

There is also a Nonce Value

Here I haven't entered any data

Prev block hash is 0000000 as it is the first block and it is known as the Genesis Block

Here the hash value starts from 0000

In the above there is no data the number of block is 1 and hash value starts from 0000 which shows it is a valid block

same process repeated for the next blocks.

Now If I change the data input in block no 1 the blocks will be red which shows an invalid block.
Sure we are required to remine ,

and as soon as I mine it Nonce value gets changed and generated a valid hash started with 0000, thus block no 1 is validated but not all the blocks are after this.

Here all blocks ahead of the modified block are required to re-mine. so from the above it's clear that no data in the blockchain can be Altered.

Q6. What Is Race Attack in blockchain? OR What Is Finney Attack in blockchain? OR What Is Vector76 Attack in blockchain?

Race attack in Blockchain

Race attack in blockchain is a type of attack where traders and merchants who accepts payments immediately on watching "0/unconfirmed" are exposed to the transaction being reversed.
So we could call it a type of double spending attacks like Finney attack or Vector 76 . Your the attempt of fraud could work as the other party or the one who is a fraudster sends a transaction paying the merchant directly to the merchant and also sends a conflicting transaction of spending the coin to himself and to the rest of the networks in blockchain

To avoid a Race attack the receiver must wait for a confirmation of the transaction Before taking any actions and one needs to be very careful as double sending is full of fraudulent unlike physical currency.

Q7Limitations/disadvantages of Blockchain.

Despite of having too much usefulness there are some limitations and disadvantages of blockchain which I am going to discuss below:

•High transaction fees and slow transactions:
Personally considering it as a demerit some people does not like entering into the world of cryptocurrencies just because of the high transaction fees.

• Immutable Data:immutable data is another demerit of the blockchain technology as the block chain cannot go back and so is the data which cannot be muted

Self maintenance of wallet by the users :
In blockchain technology the users themselves has to to maintain their wallets else they can lose the access.

Consumption of high energy:
Blockchain technology consumes high energy as some of its solutions too much energy which in turn is a disadvantage of blockchain technology.

Difficult to scale up and high resources oriented: the major hurdle of blockchain industry is that blockchain are difficult to scale up the reason behind is their consensus method.

Conclusion

Coming onto the conclusion all I can say that
Blockchain is a database which is very helpful as it keep the record of all the information. Blockchain is very much secured and it is not easy to hack.
Its various type defines the proper use of it. All the type has its own specialty.
The transactions here is very much clear and transparent .
Moreover it is a distributed ledger .
Blockchain of Bitcoin and ethereum are generally decentralized and can be designed as per the need.

Blockchain is a revolutionary technology and the fastest growing technology which in turn is safe and secure when handled with care.
Blockchain has capacity to solve many of the problems and is indeed very useful for two day and also for the coming years.

the coming future of blockchain technology is very bright as more and more people are getting to know about this people are showing interest and are investing in different type of cryptocurrencies which are helping this platform to grow.

I would like to thank our professor for giving us this wonderful lecture

Cc
@steemitcrytoacademy
@stream4u