---
# System prepended metadata

title: 'Blockhain Class Notes:'

---

# Blockhain Class Notes:

## Lecture 1:

- Slide 1,2

Good evening stuidents.Welcome to the this journey of understanding one of the frontier technology of 4IR, "Specialization on Blockchain Technology". I don't know after the course I would be able to make each and everyone of you "specialists" or not but I will try my best to show you in which world we are going to move into. 

In Today's class we will discuss mainly about the technology at just a surface level. We will gossip most of the time. We will review the Course outline and your expectation on the course. 

- Slide 3,4

I am sharing my background first. I am Dr. Rubaiyat Islam. Currently, working as 
"Crypto-economist" of Sifchain Finance, A decentralized fintech company. Done my  Ph.D in simulation Studies from University of Hyogo, Japan.  My Research interest on Frontier Technologies, complex networks, computational economics, System design with modelling and simulation.

- Slide 5

Lets jump into the course description or outline of the course which you must know at the beginning. The first topic will be covered by today as you know we will just try to get familiarize with the technology and its promising industry.
Next we will take a deep dive into the main pillers of this technology.

And while understanding the technology we will try to simulate a blockchain in python environment  

- Slide-6
This is the second part of this specialization course. We will learn about Ethereum aka Blockchain 2.0. Anybody know the difference between Bitcoin and Ethereum? 

The next topic we will cover is Tokenomics. Do CSE Bachelor courses have some minor courses like Economics?If not, then it is a pity. Any engineering industry should be familiarize in Business side of it. So, you all should understand the Economics 101 supply, demand, price mechanism , money flow etc. concepts. Anyways, in this I will try to cover the Token-economics, which is basically deals with the incentive mechanism of any complex financial economic system. 

And we will explore Web3 Industry Do you know the difference between Web 1.0, Web 2.0 and Web 3.0?

TECH | Function | Benefits|
----|----|-----|
web 1.0 | Read | links among websites
web 2.0 | Read, Write| Interoperability & Collaboration
web 3.0 | Read, Write, Own | Incentivize the collaboration(Token)

![Uploading file..._l102wm0hj]()

For the Web3.0 we will not go in depth, Rather we will learn a couple of New Technology currently are disrupting the market: DeFi and NFT.

Finally the Project:

Possible Scope |  Time| Expectation
----|----|----|


- slide -8

These two books are the best to start and prepare your foundation of understanding. Till now the most popular public blockchain at the moment. 

- slide -9-11

All the IUB policies.

- Slide 12-13

What is actually a Blockchain? Before beginning the actual class I request all of you one  one 

-slide 14:

An increasing list of records that are linked using cryptography(Wikipedia).
 
 - Eliminates autocracy
 - Eliminates Single point of Failure
 - Confirms Integrity
 - Secures the Truth and eliminates trust requirement. 
 
 
 So Blockchain is Basically:
 
 - secured ledger system decentrally stores the data, in terms of single point of failure. You know about the p2p network, It is easy to recover the whole blockchain data as endless points/nodes are there in the internet.
 - Transparency is needed in this devided polarized world.

- Slide 15

-Bitcoin is distributed  online payment system  where each node stores list of previous transactions and some special nodes validates new transactions are called miners. They donate their computing power to validate transactions and publish the new blocks in the block chain. So there is no central server for bitcoin. 
-Transactions are formed into blocks and approximately 10 minutes; These transactions are formed into blocks at an approximately constant rate of one block per 10 minutes; blocks contain a varying number of transactions. These blocks form the block-chain, where each block references the previous block. 
-To send or receive bitcoins, each user needs at least one address, which is a pair of private and public keys. The public key can be used for receiving bitcoins (users can send money to each other referencing the recipient’s public key), while sending bitcoins is achieved by signing the transaction with the private key. 
-Each transaction consists of one or more inputs(Sending Address) and outputs(Receiving Address). 
-An important aspect of Bitcoin is how new bitcoins are created? New bitcoins are generated when a new block is form . Consequently, an average Bitcoin user typically acquires bitcoins by either buying them at an exchange site or receiving them as compensation for goods or services.

Bitcoin’s brilliant solution:
The solution Bitcoin developed for problem #1 was, wait for it: to make bitcoin not exist. Just imagine being a fly on the wall when that idea was pitched…
Here’s what I mean. Bitcoin isn’t a piece of code. It’s not a picture of Emma Watson. There isn’t anything to copy. It’s a digital ledger. Just like your local bank keeps a ledger of your account, tracking all your withdraws and deposits, Bitcoin does the same. A ledger is sort of like a checkbook where one records their transactions. Except this ledger is decentralized. Instead of one company holding the ledger, every computer that participates in the Bitcoin network holds a full copy of this ledger. And this ledger tracks the transactions of all 16,682,562 bitcoin in supply today. When you create a digital crypto wallet (we’ll talk more about this later), you are creating a digital identity for yourself on this ledger. So when someone sends you a bitcoin (or more likely, a fraction of one), it’s not that you suddenly have the code for a bitcoin, it merely means that the ledger reflects a transfer of one bitcoin to your address. If you want to spend that bitcoin, all you need to do is broadcast a message to the network to update the ledger, effectively transferring that one bitcoin to the wallet of your choice. That’s why you can’t just replicate or steal a bitcoin — there isn’t anything to replicate or steal! If you want to “steal” a bitcoin, you need to effectively alter the ledger.
But you’re clever — that’s why you only buy beer during happy hour and still use your student email to get cheap Spotify even though you graduated last year — so here you ask: “Ok, why can’t I just alter the ledger?” First, don’t interrupt me — this is my spotlight. Second, the answer is because you need to convince 51% of the network that your transaction is legitimate. Read on to fully understand why this is preventative.
“[Bitcoin] is a remarkable cryptographic achievement… The ability to create something which is not duplicable in the digital world has enormous value…Lot’s of people will build businesses on top of that.” — Former CEO of Google Eric SchmidtWhen a transaction is broadcasted and approved by at least 51% of the network, the transaction then needs to be confirmed. This is where the blockchain comes in. The blockchain is a collection of transactions. The transactions are lumped together and placed in a block as part of a long chain. It’s called a chain because each new block references every block before it — so changing one block corrupts the whole chain. Each block has approximately 2,000 bitcoin transactions. To place this “block” into the chain, computers have to solve a puzzle. It’s basically a combination lock where the only way to unlock the puzzle is to find the correct combination. The only way to find the combination is to literally guess numbers randomly. The faster and more powerful the computer, the faster the computer will find the solution. Solve the combination, confirm the transaction. Confirm the transaction, get bitcoin as a reward. These participants who use their computers to confirm transactions are called miners. No, not like the minors in your local sex offender’s fantasies. Miners in the sense that they do work on behalf of the network and receive rewards in compensation.
Once this transaction goes into the block, it can be seen by everyone, forever. It can’t be edited, deleted, or modified. To change this ledger, one must be able to override 51% of all the computational power on the network. To do this, you better have one powerful computer — at this stage, no one does.
So you can’t “double spend” because the network wouldn’t allow it. One transaction would be approved and the other rejected depending on which was broadcasted to and processed by the network first.
Unlike with most assets where a higher value makes it more difficult to secure against theft, Bitcoin works inversely. A $10,000 bitcoin is more secure than a $500 bitcoin. This is because a higher price means that their is more incentive to secure the network; more incentive corresponds to more miners and much more powerful computing power.
Recap:
I know this was long and we didn’t even cover everything I wanted to. But that’s why there’s no limit to how many “parts” you can have. Just talk to any Hollywood blockbuster director today. Hopefully you now have an understanding of the why Bitcoin’s development was revolutionary, what the difference is between Bitcoin and blockchain, understand how Bitcoin uses the blockchain to maintain its security, and are convinced to keep reading. In subsequent articles, I’ll delve deeper into bitcoin, discuss its uses, intrinsic value, and whether it’s a bubble; explore the many other use cases of the blockchain; and look at the future of this industry.


- slide 16

Now what is Blockchain . Blockchain is the infrastructure where the ledgers of bitcoin are updated. So it is the internet of crypto. A database is a kind of central ledger, whereas Blockchain has a distributed ledger, which means unlike the traditional databases, it is not governed by any central server. Due to this, Blockchain is a fully confidential and robust technology. People transacts bitcoin among themselves . Special users called miners approves this transaction by a fairly neutral process of “Proof of work”. Once approved and published in the block it is theoretically immutable. Which solves the real  world security problem of “Fake Money” and “Double spending”. This is so secured that it is not hackable since 2009 when the first block is published.


- slide 17

Anonymity.
Decentralized and publicly available.
Finite supply.
Transparency, no third-party trust required.
-       All-electronic
-       Divisible down to 0.00000001 BTC
-       Irreversible trades, immutability.
-       Secured, no double-spending

Distributed online payment system.
Transactions formed in blocks and each transaction referred to the previous transactions ; 
To send or receive bitcoins, each user needs at least one address, which is a pair of private and public keys. 
Each transaction consists of one or more inputs(Sending Address) and outputs(Receiving Address)
Can be divisible up to 10 millionth fractional unit called satoshi.

- slide 18 

In January 2021, the Bitcoin market cap reached an all-time high and had grown by over 400 billion U.S. dollars when compared to the summer months. The market capitalization currently sits at more than 600 billion U.S. dollars. 

he cryptocurrency market is predicted to grow with a CAGR of 56.4% from 2019 to 2025. Globally, cryptocurrency users have exceeded 40 million.

Bitcoin alone accounts for $6 billion of daily online transactions. Over 18.3 million Bitcoins have been mined and are in existence as of Q1 2020. The world is predicted to spend up to 15.9 billion in blockchain-related tech by 2023.

In one research it was estimated that, 76 billion of illegal activity per year involves bitcoin (46% of bitcoin transactions), which is close to the scale of the US and European markets for illegal drugs. The illegal share of bitcoin activity declines with mainstream interest in bitcoin and with the emergence of more opaque cryptocurrencies. The techniques developed in this paper have applications in cryptocurrency surveillance. Our findings suggest that cryptocurrencies are transforming the black markets by enabling “black e-commerce.”

- slide 19

 [ How bitcoin works ](https://www.vpnmentor.com/blog/ultimate-guide-bitcoin/) 
 
 
 

- slide-68 

Google is a true Internet giant as of the thirty first of December the company's revenues were over And this resulted in a $13 million net income.How could block change disrupt Google's search dominance? A growing number of platforms are trying to challenge Google's dominance.
A search engine like Duck Duck Go would need some sort of integration with a platform collecting customer data.The so-called identity coins thus by combining privacy focused search with a similar quality search experience users will have peace of mind that one company does not own all their search queries. A further incentive a decentralized search platform of the future could offer users are tokens part of the advertising revenue coming in would serve as a reward for the platform users. This could be a nice incentive that would help the platform find its first adopters and grow faster.
-- Duck duck go

Gabriel Wienburg : Just answers . Doesn't rely on user profile. Open source github . Coalition of more than 400 search providers.  

How profit generates? IP Leakage.  Google will send your keywords google returns the site this includes your IP address. Smart encryption used and no IP information used.     

-- Brave Browser+ Bat Token
(BAT) was created by  Brendan Eich and Brian Bondy. Eich is famous for creating JavaScript and both creators have worked together to develop Mozilla’s Firefox internet browser.

Basic Attention Token is primarily used to reward Brave browser users if they opt in to view ads. Brave users can also tip their favourite content creators with BAT, which can become a secondary source of earning.

__ Steemit
The current revenue split is 55 45 where content creators take home the larger half. In addition as of now viewers are not rewarded in any way for the ads that are being shown.introducing a model with stronger incentives for both content creators and viewers incentives in the form of cryptographic tokens.Along with attracting some high quality content producers could help divert some traffic away from YouTube.

Developed in 2016 by Dan Larimer and Ned Scott, Steemit is a renowned blogging and social media platform built on the blockchain.

- Slide 69 

One company controls information about the e-mails biography interests acquaintances relationships travel, thoughts and even love interests of a third of the global population.

In April 2018 the Cambridge analytics scandal confirmed and highlight of these worries the way Facebook. collects data right now is the epitome of centralization.
Its revenues were forty point $6 billion in 2017 and the company managed to turn almost $16 billion

However it should also be pointed out that Facebook being a social network benefits from a really strong. network effects the platform creates value for its users because it connects them with many of their friends relatives and acquaintances. OK how could block chain disrupt Facebook's business.

--Steemit 
More than 2 billion users already use the platform which makes things much more difficult for new competitors.

- Slid 70

Amazon : Low fees, User Data and Nework Effect. Less traffic , Token economics can help to provide incentive and attract useers.




