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Vikram Kumar
Co-founder, Swerl.
July 2015
Paradigm Shiftfrom the bitcoin Blockchain to Networked Computing
NonCommercial-NoDerivatives 4.0 International License.
A bit of Bitcoin History
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STARTED WITH WORK BY DAVID CHAUMBlind Signatures for Untraceable Payments, 1983
Discussions and implementations throughout the 90’s and 2000’s on Cypherpunk mailing list and Financial Cryptography Conferences.
A bit of Bitcoin History
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Bitcoin: A Peer-to-Peer Electronic Cash SystemNOV 2008: BITCOIN PAPER PUBLISHED BY SATOSHI NAKAMOTO
A bit of Bitcoin History
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Bitcoin: A Peer-to-Peer Electronic Cash SystemNOV 2008: BITCOIN PAPER PUBLISHED BY SATOSHI NAKAMOTO
Bitcoin: A Peer-to-Peer Electronic Cash SystemJAN 2009: NETWORK CAME INTO EXISTENCE
A bit of Bitcoin History
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Bitcoin: A Peer-to-Peer Electronic Cash SystemNOV 2008: BITCOIN PAPER PUBLISHED BY SATOSHI NAKAMOTO
Bitcoin: A Peer-to-Peer Electronic Cash SystemJAN 2009: NETWORK CAME INTO EXISTENCE
AUG 2010: ONLY MAJOR SECURITY FLAW
A bit of Bitcoin History
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Bitcoin: A Peer-to-Peer Electronic Cash SystemNOV 2008: BITCOIN PAPER PUBLISHED BY SATOSHI NAKAMOTO
Bitcoin: A Peer-to-Peer Electronic Cash SystemJAN 2009: NETWORK CAME INTO EXISTENCE
AUG 2010: ONLY MAJOR SECURITY FLAW
followed not long after by LitecoinAPR 2011: 1ST ALTCOIN LAUNCHED - NAMECOIN
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Transaction
Transaction
Transaction
Transaction
Transaction
Transaction
Transaction
Transaction
Transaction
Transaction
Input Transaction Name + Index
Input Script
Output Script
#0 #1 #2
#1 #2#0
A Blockchain is Bitcoin’s major architectural contribution
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Bitcoin Transactions
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TRANSACTION
TRANSACTION
TRANSACTION
TRANSACTION
INPUT TRANSACTION NAME+INDEX
SCRIPT SIGNATURE
SEQUENCE NUMBER
LOCK TIME
SCRIPT PUBKEY
#0 #1 #2
#1 #2#0
Verification of Transactions
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TRANSACTION
INPUT TRANSACTION NAME+INDEX
INPUT SCRIPT
OUPUT SCRIPT
#0 #1 #2
#1 #2
INPUT SCRIPT #0
OUTPUT SCRIPT from TXN-X OUTPUT#2
INPUT SCRIPT #1
OUTPUT SCRIPT from TXN-Y OUTPUT#3
INPUT SCRIPT #2
OUTPUT SCRIPT from TXN-Z OUTPUT#0
Transaction Inputs and Outputs contain small executable scripts. When combined and executed in a network node, produce an script 'invalid' or 'valid' answer.
This is the first step in verifying a transaction.
The collection of scripts in a Transaction is often referred to as a Smart Contract.
Blocks in Bitcoin
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A Block contains Verified Transactions and links to a parent Block.
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Transaction
Transaction
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Transaction
Transaction
Transaction
Blockchain(s)
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A Blockchain does not exist per se peers converge over time to form a consensus view of accepted Blocks. In bitcoin convergence is based on the highest computational difficulty of a Block’s hash-chain.
A Blockchain is a shared transaction log over a network of contributing computing nodes. Essentially it is an authenticated Network Database that grows.
A Blockchain is not limited to currencies or financial systems. It can record any information. bitcoin and units of value (aka. Money) are the first apps.
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Transaction
Transaction
Transaction
Transaction
Transaction
Transaction
Transaction
Transaction
Transaction
Transaction
Input Transaction Name + Index
Input Script
Output Script
#0 #1 #2
#1 #2#0
Use Blockchains when
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✤ A log of verified, immutable transactions needs to be created.
✤ Transparency is important. Replication makes it difficult to change history and all transactions can be independently verified.
✤ Lowering the cost to participation is important e.g. no need for a-priori trust or pre-authorisation of participants.
✤ Need to record transactions from Untrusted sources.
✤ Want decentralised or entirely distributed deployment e.g. for resilience and/or transparency.
Many Blockchains Bloom
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bitcoin is the largest Blockchain network but it is not the only one.
Enables asset representations of new chains to be pegged to bitcoin.
Leverages the distributed trust in bitcoin to enable finer grained representations of specific community value without polluting the larger network with local transactions.
Interoperable with the bitcoin Blockchain in a way that permits rapid innovation of value models.