Blockchain

Technology

Ch Anwar ul Hassan
Department of Computer Science and Software
Engineering
Capital University of Science & Technology,
Islamabad
[email protected]
Slides: Affan Ahmad Toor
 Today is Introductory Session
Today’s Agenda

• Resource Person

• Participants

• Course

Capital University of Science & Technology, Islamabad

 About Myself

Capital University of Science & Technology, Islamabad

About you
 About you
• Name

• Expertise

• Life Goals

• Expectations from this course

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 Assessment
Credit Hours: 03

Evaluation Criteria

Mid term 20%

Final exam 40%
Project 05%
Quizzes 05%
Assignments/ Certification 25%

Capital University of Science & Technology, Islamabad

 Reference Book
Bitcoin and Cryptocurrency Technologies
Authors: Arvind Narayanan, Joseph Bonneau,
Edward Felten, Andrew Miller, Steven Goldfeder

Publisher: Princeton University Press

 Blockchain is a distributed public ledger, immutable transactions,
secure and bound by cryptography principle

Timestamp series of transactions, Managed by clusters of

computers, secure and bound by using cryptography principle,

Blockchain is a technology to create and maintain a cryptographically

secure, shared, and distributed ledger (a database) for transactions that
brings trust, accountability, and transparency to digital transactions.

Blockchain is all about storing and processing sensitive information –

like financial transactions or voting records – on lots of different
computers, rather than sticking it all in one place
Capital University of Science & Technology, Islamabad
Capital University of Science & Technology, Islamabad
 Why bother?
Blockchain brings trust to a
transactional system!

Blockchain technology allows everyone to keep an eye on

what’s going on within a system, but doesn’t give any one
person control over that information.

Capital University of Science & Technology, Islamabad

 Blockchain
• What is blockchain
• Shaking the system
• What People are saying
• The New Internet
• Web 3.O
• Impact on Industry
• DigiCash to Bitcoin
• Bitcoin Properties
What I think I look like when
explaining Blockchain
 Advantages of Blockchain
• Greater Transparency
• Enhanced Security
• Improved Traceability
• Increased Efficiency and Speed
• Reduced Costs
• Decentralized Control

Capital University of Science & Technology, Islamabad

 Advantage: Greater Transparency
• Blockchain is a type of distributed ledger,
in which all network participants share the
same documentation version
• This shared version can only be updated
through consensus, i.e. everyone must
agree on it!
• To change a single transaction it would
require the alteration of all subsequent
records and the collusion of the entire
Capital University of Science & Technology, Islamabad
 Advantage: Enhanced Security
• Transactions must be agreed upon before
they are recorded
• After a transaction is approved, it is
encrypted and linked to the previous
transaction
• Information is stored across a network of
computers instead of on a single server,
which makes it very difficult for hackers
to compromise the transaction data
Capital University of Science & Technology, Islamabad
 Advantage: Improved Traceability
• In a company that deals with products that are
traded through a complex supply chain, it is
hard to trace an item back to its origin.
• When exchanges of goods are recorded on a
blockchain, you end up with an audit trail that
shows where an asset came from and every stop
it made on its journey.
• Historical transaction data can help to verify the
authenticity of assets and prevent fraud.
Capital University of Science & Technology, Islamabad
 Advantage: Increased Efficiency and
Speed
• Trading anything via conventional methods
is a time-consuming process that is prone to
human error
• Blockchain streamlines and automates
trading processes, hence transactions can be
completed faster and more efficiently
• Everyone has access to the same
information, which builds trust without
requiring any intermediaries
• NoCapital
need for ledger reconciliation
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 Advantage: Reduced Costs
• No need for middlemen or third parties to
make guarantees
• You don't even have to trust your trade
partner, just trust the blockchain data
• In a blockchain of financial accounts
companies can cut cost of audits
• No need for a central administrator or
infrastructure, because it's decentralised and
replicated in multiple places
Capital University of Science & Technology, Islamabad
 Disadvantages of Blockchain
• 51% Attacks
• Data modification
• Private keys
• Inefficient
• Storage
• Power Wastage

Capital University of Science & Technology, Islamabad

 Disadvantage: 51% attacks
• Every decision is made with consensus of
majority
• If one entity manages to control more than
50% of the network hashing power, then
they will be in position to modify anything
and disrupt the integrity of blockchain
• 51% attack only exist in theory as it
require extensive computational power
Capital University of Science & Technology, Islamabad
 Disadvantage: Data Modification
• Once data has been added to the
blockchain it is very difficult to modify it
• Modification often require dropping a
block and creating new one, which also
require consensus of whole blockchain

Capital University of Science & Technology, Islamabad

 Disadvantage: Private Keys
• Blockchain uses public-key cryptography
to give users ownership over their
cryptocurrency units
• Each blockchain address has a private key
which needs to be kept secret
• In case the user loses their private key,
they lose control of their data and there is
no solution for it!
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 Disadvantage: Inefficient
• Blockchains are highly inefficient due to
their working model
• Only one miner wins everytime, hence
wasting all the processing of thousands of
other miners

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 Disadvantage: Storage
• Blockchain ledgers can grow very large
over time.
• The Bitcoin blockchain currently requires
around 200 GB of storage
• Current growth of blockchain is faster than
the growth of hard drive
• Often nodes are lost due to insufficient
local storage
Capital University of Science & Technology, Islamabad
 Disadvantage: Power Wastage
• Bitcoin network has increased
significantly in the last few years, and it
currently consumes more energy than
many countries, such as Denmark, Ireland,
and Nigeria.
• Average cost of the Bitcoin transaction is
$75-$160 and most of this cost is due to
the energy consumption
Capital University of Science & Technology, Islamabad
 Blockchain Applications
• Cryptocurrency • Blockchain music

• Asset Management • Blockchain Government:

• Insurance Claim Processing Voting, Legislation,

• Funds Transfer Constitution, Policies

• Financial Blockchain • Passports

• Birth, wedding, and death

• Blockchain Internet-of-Things (IoT)

• Smart Appliances certificates

• Supply Chain Sensors • Personal Identification

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• Blockchain Healthcare
 When NOT to use Blockchain?
● Non-transaction based System
● Super-fast transactional System
● Confidentiality sensitive System
● Proof of Authorship
● Land Registry
● If existing system works then no need to
switch to Blockchain!
Capital University of Science & Technology, Islamabad